The Affordable Care Act – Beyond the Individual Mandate

By the time you read this blog, the United States Supreme Court may have issued its ruling on the Affordable Care Act. Most people believe the three most likely outcomes for a decision are: (1) rule the individual mandate unconstitutional, but leave the law otherwise intact; (2) declare the entire Act unconstitutional; or (3) uphold the law in its entirety. There has been so much focus on the issue of the individual mandate; I think it is worth reviewing some of the other provisions of the ACA.
Among the more popular provisions is the extension of health insurance coverage for adult children through age 26. This popularity is due in part to the weak economic climate the country has experienced since 2007. Unemployment is high (despite the way the government has redefined unemployment to exclude some of the jobless from the labor pool) and job creation is low. The official May unemployment rate is 8.2%; the unemployment rate counting discouraged workers is 14.8%; and the number of new jobs created in May is 69,000 (87,000 less than the number expected by the administration).
Also, popular are provisions of the law which eliminate lifetime limits on coverage; prohibit the denial of coverage for pre-existing conditions through the use of guaranteed issuance and adjusted community ratings; and eliminate the use of deductibles and co-payments for certain preventive health services. Each of these benefits comes with a cost which the individual mandate was intended in large part to pay. If the individual mandate is eliminated and the remaining law left intact, payment for these and other benefits will be passed on to others mostly through higher insurance premiums.
Less popular provisions of the law include the expansion of the Medicaid program. Medicaid is a means-tested program jointly funded by state and federal governments to provide care to low income individuals. The ACA expands Medicaid coverage to include persons at or below 133% of the federal poverty level after an across the board 5% income disregard (thus, effectively, the expansion includes individual at or below 138% of the federal poverty guidelines). The cost of this expansion is completely paid for by the federal government for the first three years of the expansion (2014 – 2016). After that, state governments begin to pick up part of the cost of the program leading many to argue the expansion is unfunded mandate. No matter which government pays for the program, taxpayers ultimately fund the program. Other less popular provisions include the various tax increases included in the ACA to fund the law.
A recent opinion poll published by The New York Times and CBS News reveals that more than two-thirds of Americans hope the Supreme Court will overturn part or all of the law. Approximately, one-fourth of the respondents hope the entire law will be upheld.

3 comments Add your comment

Otis Curry

June 26th, 2012
9:02 am

All what you have said is fine. But what about making ( Insurace Company) lower there payments such as a rebate to the amount of $1.2 Billion if the law is upheld thats about $151 to each American.

Otis Curry

June 26th, 2012
9:04 am

All what you have said is fine. But what about making (Insurance Company) lower their payments such as a rebate to the amount of $1.2 Billion if the law is upheld that about $151 to each American.

Eddie Phillips

June 26th, 2012
10:03 am

In general, insurance companies want as many individuals as possible in the pool of covered lives. What insurance companies do not want is for individuals to wait to purchase insurance until a health care event is imminent for the insured individual. Assuming the law is upheld (including the individual mandate), I believe competition among insurance companies will cause premiums to adjust to a fair level.