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Rhodes-Warden Insurance Blog

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Healthcare Reform Update

In late March, the U.S. Supreme Court heard arguments on several provisions of the Affordable Care Act (ACA) essentially determining its fate. Most attention centered on the minimum coverage provision, the so-called “individual mandate.”  This provision requires most people to have health coverage for themselves and their dependents starting in January 2014. Employer-sponsored plans will count, as will Medicare and Medicaid. Subsidies will be available for the needy, but those who do not buy coverage will face financial penalties.   Although other courts have found the individual mandate constitutional, the 11th Circuit Court said, “Congress cannot...mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.” 

The Court also heard arguments on the ACA’s expansion of Medicaid. The ACA will require Medicaid to cover nearly every needy American under age 65 starting in 2014. Although the federal government will pay 100 percent of states’ increased costs between 2014 and 2019, and 90 percent starting in 2020, 26 states have brought suit against the U.S. Departments of Health and Human Services, Labor and Treasury and their secretaries over the Medicaid expansion and individual mandate. Finally, the court listened to arguments on severability, or whether other portions of the ACA will stand if the individual mandate is deemed unconstitutional.   

According to the U.S. Department of Justice, “Every insured family pays an average of $1,000 more a year in premiums to cover the care of those who have no insurance,” since healthcare providers pass along the costs of treating the uninsured. However, ACA opponents argue that other reforms would do more toward improving health insurance accessibility and affordability than mandated coverage and government-run exchanges. These include extending tax benefits to individually purchased health insurance, making it fully portable and eliminating laws that require policies issued in a state to cover certain procedures, making coverage more expensive.  We will keep you informed of important developments; please contact us if you have any questions in the meantime.  

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