Understanding What the Supreme Court Decided on Affordable Care Act
One of my friends, an elder law attorney in California, wrote to us on the listserv last week the day before the U.S. Supreme Court decided the constitutionality of the Patient Protection and Affordable Care Act (“Obamacare”).
“Let’s face it.” She noted. “On Thursday, we are all going to be printing out the decision no matter which way it goes. We’ll wander down to our favorite coffee shop, grab a mug, and begin dissecting it to discover what it means.” Only slightly paraphrasing, this was the message.
This might have been the situation but, on Thursday, I was in Milwaukee, had not yet found a favorite Starbucks, and was still trying to log into the hotel internet. Having now found the Starbucks, downloaded the decision, and made a head start on its meaning but not yet having absorbed its total of 193 pages, I think I can make some reasonable projections and maybe provide some clarification.
Words for Seniors.
· First, this should be obvious but, just in case it is not, almost everyone over age 65 does not need to be concerned about the requirement to obtain health insurance. You have health insurance. It is Medicare. If you decide to have private supplemental insurance, a Medicare Supplement or Medicare Advantage, you can do so but you have health insurance now.
· The provisions of the Affordable Care Act to reduce the cost of prescription drugs for seniors and eventually eliminate the so-called “doughnut hole” in 2020 stand as does the provision stating that the cost of preventive care is to be without copayments.
· Savings from Medicare would come largely from elimination of what have been taxpayer subsidies to insurance companies that write Medicare Advantage plans. There are provisions in the act to oversee efficiency, encourage at-home care, require insurance companies to spend a certain proportion of premiums for care as opposed to administrative costs, and so on. Administration of these provisions will determine whether and how well they work.
For Those Under Age 65. For those under the age of 65 and not otherwise covered by Medicare, Medicaid, or private or employer-sponsored health insurance, the Supreme Court decision found that they must either obtain health insurance or pay a penalty. Small employers with employees averaging less than $25,000 per year may receive a tax credit for providing insurance. Employers with more than 50 employees may be required to provide insurance. Subsidies are provided for some who cannot afford to obtain coverage. Young adults up to age 26 can remain on their parent’s coverage. For details on the above, especially as to employment coverage, it is necessary to consult the law. Other protections remain. They eliminate limits on lifetime benefits although many insurers do this already, and prohibit companies from rescinding policies because claims were made, unless there was fraud. Importantly, insurers, as of 2014 will not be able to deny coverage based on preexisting medical conditions This provision is in effect now for children. Also health insurance exchanges would be implemented where potential policyholders can “shop” for the best deals. Some States have been holding off on implementing this section while waiting for a decision. The law envisions eventual interstate insurance marketplaces.
What the Decision Does and Does Not Do.
· The Court used the taxing authority to support the law instead of the commerce clause. This could give the mistaken impression that obtaining insurance was a tax or payment of premiums goes to the government. I already know people who think this. The insurance is private and is paid to the insurance company. The Court is referring to the penalty for not getting insurance. It would be collected by the IRS but is specifically excluded from any criminal penalties.
· Secondly, the law expected people within a given level of the poverty limit to get insurance through Medicaid. Medicaid is usually funded by a combination of State and federal money. The Supreme Court rejected the idea that States needed to sign on or put their federal Medicaid allotment at risk so some States might opt out and not allow Medicaid to cover some of their lower income residents. This is another wait and see issue.
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.