How Will the New Health Care Legislation Affect You?
On March 23, 2010 President Obama signed into law the Patient Protection and Affordable Health Care Act (PPACA). Together with the Health Care and Education Reconciliation Act it represents the most significant government expansion and regulatory overhaul of the U.S healthcare system since the passage of Medicare and Medicaid in 1965. Yet the controversy surrounding this bill fueled heated debates before its ratification.
Polls consistently showed that the majority of Americans were not satisfied with the bill as it was currently written, and several Democrats voted against it along with all Republicans in the House of Representatives. On June 28, 2012, the United States Supreme Court upheld the constitutionality of most of PPACA in the case National Federation of Independent Business v. Sebelius.
PPACA is aimed at decreasing the number of uninsured Americans, and reducing the overall costs of health care. There are many mechanisms within the bill —including mandates, subsidies, and tax credits—that are aimed at employers and individuals in order to increase the coverage rate.
Additional reforms within the Act are aimed at improving healthcare outcomes and streamlining the delivery of health care. PPACA requires insurance companies to cover all applicants and offer the same rates, regardless of pre-existing conditions or gender.
It would take an army of attorneys to understand and explain all of the provisions in the law, so I’m going to briefly explain some of the major ways that this health care bill will affect you.
1). The bill mandates that all Americans purchase health care insurance.
By 2014 all Americans must buy health care insurance. Currently insured people will be affected the least by PPACA. Government assistance to low and moderate income groups will be available to help cover the cost of health care policies; fines and penalties will be imposed on anyone who doesn’t buy health care insurance. In 2014 the penalty would be about $95.00, and then rise incrementally to $695.00 in 2016. There will be a maximum cap on fines.
2). Employers are mandated to offer health care insurance.
Employers with 50 or more employees must provide health insurance or pay fines if any of their employees receive federal subsidies to buy health insurance. Fines and penalties will be assessed on any business that fails to offer insurance. The only exception to this rule is that employers with less than 50 employees are exempt. Employers with less than 25 employees who choose to offer insurance would receive tax credits as long as the average salary of their employees $50,000.00 per year.
3). No caps on medical coverage and benefits paid for treatment.
Restrictive annual limits and lifetime caps on the amount that insurance companies spend for medical coverage on individuals are no longer allowed. Historically, insurance companies placed limits on the amount of coverage for your medical expenses. These limits affected how much your insurance company would pay for your medical treatment, especially in the case of terminal illnesses.
4). People with pre-existing conditions will receive coverage.
PPACA mandates that all children will have medical insurance including children with pre-existing conditions. High-risk insurance pools will provide coverage to adults with pre-existing conditions, and will be operated by states. They will limit your out-of-pocket expense for medical insurance.
5). Children can stay on their parents’ plan longer.
Adults under the age of 26 can stay on their parents plan to receive medical treatment. Under the old rules, adults 19 and over had to find their own health insurance if they were not full-time students. Adult children that are financially dependent upon their parents can stay on their parents’ policy.
6). Individuals can’t be dropped by their insurance company.
Insurance companies are prohibited from denying coverage to anyone. Health insurance companies will no longer be able to save money by dropping health care coverage for individuals with catastrophic diseases or terminal illnesses.
7). High income earners will pay higher taxes.
Individuals and families that earn over $250,000 per year will be paying higher taxes. Increased Medicare payroll taxes, taxes on unearned income, such as capital gains, interest income, and dividend income, will be imposed beginning in 2018.
8). The percentage of insured Americans will increase to 95%.
Low and moderate income individuals, adult dependents under the age of 26, people with pre-existing conditions, and children, will be the biggest beneficiaries of PPACA. Senior citizens will receive a 50% discount on brand name prescription drugs, which will close the doughnut hole that made seniors responsible for the entire cost of prescription drugs once they surpassed the coverage limit. Some senior citizens will lose a portion of their extra benefits from Medicare Advantage because Government subsidies will be cut.