[author: Aaron Kase]
When the Supreme Court upheld the controversial Patient Protection and Affordable Care Act last week, the rhetoric started flying fast and furious. In lieu of debating the actual merits and policy of the health care law, its opponents have resorted to gross hyperbole and outright lies, calling the bill a “government takeover of health care” and the “largest tax increase in the history of the world” that will add “trillions to our deficits” and mean that “up to 20 million Americans . . . will lose the insurance they already have.”
Rather than get caught up in the partisan storm that erupted after the high court ruled that the law could stay, Lawyers.com spoke to Jennifer Bard, a law professor and director of the Health Law Program at the Texas Tech University School of Law to explain what provisions do and do not exist in Obamacare, and what the reform will mean for the average consumer in America.
Rules for insurers: The ACA contains a number of consumer-friendly requirements on the behavior of health insurance companies, some of which have already gone into effect. “The one that has been benefiting people very visibly is you have to keep adult children on their parent’s insurance up until age 26,” Bard says. “That’s been covering a huge gap.”
Since 2010 insurers have been no longer allowed to deny coverage to children under 19 because of pre-existing health conditions. Starting in 2014, no one can be denied coverage based on pre-existing conditions.
The law also outlawed recission, by which insurers would cancel health care policies when the holders got sick and needed care, and put an end to lifetime caps, whereby insurers would cut off coverage once the costs reached a certain threshold in what was a devastating blow to people with expensive ongoing health conditions like diabetes or cancer.
People who are already insured: Presidential candidate Mitt Romney has stated that up to 20 million people will lose their current health care because of the new law. Is it true?
“No,” Bard says. “There’s nothing in this act which should reduce the amount of health care that anybody is currently getting through their insurance. No one has to change their insurance through this act. There is no government national health insurance. It will all be run through the same private companies that offer health insurance now.”
People who are currently uninsured: People without health insurance will have a number of different options to obtain or avoid coverage starting in 2014. Medicaid will be expanded (by states who choose to participate) to all people with an income of up to 133 percent of the federal poverty line. Insurance exchanges will be put in place to make it easier for individuals who don’t qualify for Medicaid to shop for quality insurance, and tax credits will be available to families with an income of up to 400 percent of the poverty line. Up to 32 million additional Americans are expected to be insured under the ACA, depending on how many states participate in the Medicaid expansion.
What about the individual mandate, the subject of so much ire when the Supreme Court decided last week that it is constitutional? Does it mean that you have to buy insurance? No, it means the government will impose a penalty, or tax, on people who can afford insurance and choose not to get it, and it doesn’t start until 2014.
“We’re not talking about that you’d have to go out today and get health insurance,” Bard says. “A lot of people can’t afford to do that. The issue is, in 2014 there will be reasonable options for insurance. And the tax is income linked. Many people will be exempt.” The penalty or tax will be phased in over three years, reaching a limit of $695 or 2.5 percent of household income, whichever is greater, in 2016. Among the exemptions are people who don’t file a tax return, people who would have to pay more than 8 percent of their income for coverage, and people who claim religious exemption.
For small businesses: “There’s no obligation with this act for any employer to offer health insurance,” Bard explains. “And there never has been.”
The ACA’s opponents claim that the law will stifle innovation by putting onerous requirements on small businesses. In fact, the opposite is true– while the law does not require businesses to offer health insurance to employees, it does create tax credits for companies with fewer than 50 people to help pay for insurance, which along with other measures should make it easier and more affordable for start-ups to attract and retain talent. In 2014, companies with fewer than 100 employees will be able to shop for insurance on exchanges to search for better choices and lower costs.
The law does contain provisions that companies with more than 50 employees may have to make a “shared responsibility payment” if their employees receive tax credits to pay for personal insurance because there is no opportunity to enroll in a company plan.
Abortion: Contrary to the claims of its opponents, the ACA does nothing whatsoever to expand government-funded abortions. Since 1977, by law the federal government cannot pay for abortions except in the case of rape, incest or danger to a mother’s life. That will not change. “There’s nothing in this act that requires any insurance or insurance provider to cover abortions,” Bard says.
Private insurers in the exchanges may offer abortion coverage, but they are not mandated to and federal funds must be kept separate from portions of coverages that offer abortions in the case of subsidized plans. States can ban all plans on the exchange from covering abortions if they wish; states may also use their own money to cover abortions beyond federal limitations if they so choose.
Reducing the cost of health care: One of the goals of the Affordable Care act is to slow the rise of health care costs, which already account for 17.9 percent of the GDP. Among the strategies are to root out waste, fraud and abuse in public health care programs like Medicare and Medicaid, encouraging preventative care to stop health problems before they become more costly, and the creation of a team to study other ways the United States can bring efficiency to its system without sacrificing quality of care.
The much-maligned mandate itself should help by spreading the cost and cutting down on freeloaders who have no insurance, show up to emergency rooms for care and never pay for it. “Because the hospitals were providing so much free care, they have to raise their prices to cover it,” Bard says. “If the hospital did not have to pay for so much uncompensated care, it would slow the increases in health care cost.”
What the real-world effect of the ACA on costs will be is still the murkiest, most unpredictable part of the bill. Whether the various strategies will prove effective or not is something that remains to be seen.
“There are a lot of factors that increase health care costs,” says Bard. “I don’t think anyone thinks health care costs will not go up.The question is, will they go up less than they would?”
Find out for yourself: For more resources on the ACA, the Kaiser Foundation has produced a number of fact-based, non-partisan resources on what the law contains and how it will broaden the options people have for obtaining insurance.
Ultimately, the lesson on the ACA is don’t just believe what you read or hear from people pushing a political agenda. Find out for yourself what the law contains and form your own opinions about what is and isn’t appropriate and what will and will not work.
“I am describing what anyone who reads the act can see for themselves,” Bard explains. “I’m not guaranteeing or even endorsing that all these things will work as planned. I really encourage people to read it. If you want to know that something you read is or isn’t in the act, it is available.”
Do you think the ACA will work as intended? Share your opinion by leaving a comment below.