The Affordable Care Act (ACA), commonly known as Obamacare, has been ruled constitutional. Not because the government has a right under the Commerce Clause to tell citizens what they must buy, but because the Supreme Court ruled in a 5-4 vote that the penalties involved for not buying health care insurance represent a tax. Congress has the right to impose taxes, and so they can create a law that imposes a tax on people who do not purchase health insurance.

Whether the government has any business forcing money out of citizen’s wallets for not doing something, and the implication of such a precedent is a question for another day. What will be most important for Americans, and others viewing the continuing electoral fight over the law, is what does it really mean? What is in the law, how does it affect me, what are the facts?

This is the first in a series of articles about the ACA Toonari will conducing to answer that exact question. This series will breakdown the 2,700 page law into bite-sized components explaining the benefits, structure, and implications of each part of the law. Arguments about whether it is good or bad will not be a function of this series. The reality is that most people do not have the time, nor the inclination to read, study, and research information about a 2,700 page law written in legalese. That is the province of political junkies and geeks. We will start with a general overview.

The ACA law is one that changes the way health insurance is run in the United States. It is not a government run health insurance plan in sense of Britain or Canada. In those countries, the government is the insurance company. With ACA insurance companies will still exist. However, the ACA mandates what must be covered. These are:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorders
• Prescription drugs
• Rehabilitative services
• Laboratory services
• Prevention and wellness services
• Chronic disease management
• Pediatric services
• Limit total out-of-pocket spending

Anyone not meeting this coverage will pay a penalty, or tax, for not having it. The penalty starts off low at $95 per adult, 47.50 per child, or 1% of your income whichever is higher. This is a key point. You will hear on television people saying its just $95. That is not true. If you make $50,000 per year, your fine will be 500 dollars. After 2014, that amount will rise until it gets to 2.5 of your income. This is stated in Section 1501, page 146 of the ACA law.

The insurance policies will be sold via an exchange. All the plans will be the same; meaning they have the same benefits. You will be able to buy different levels, with each level paying a higher percentage of total costs, but the benefits will remain the same from company to company.

Employers with 50 or more employees will have to provide insurance coverage to their employees, and it will have to meet the essential requirements of the ACA law. If they do not provide coverage they will face a fine of $2,000 per employee. Some companies and unions have been given waivers stating they do not have to comply with the law.

According to the ACA states have to expand their Medicaid rolls. This is the provision that the Supreme Court found unconstitutional. Originally, this is how more people were going to get health care insurance. Individuals and family’s that make too much for current Medicaid benefits, but make too little to afford the premiums for the plans under ACA, will go on the Medicaid plan in theirs states. States would have to pay 10% of the Medicaid costs. IF the state did not participate in the plan then they would lose federal funding for their whole Medicaid program. 

The Supreme Court has ruled that states can now opt out of this provision. It is unclear how many states will not participate, or what the result will be if they do not. A total of 26 states sued the federal government over the mandate and medicaid provisions, so presumably it is possible half the nation’s states will refuse to comply with the Medicaid expansion. The state of Florida and Texas have already declared their intentions to not comply.

This is a very general overview of the law. In the next installment we will describe two of the more popular features of the plan: children 26 and under, and preexisting conditions.

Image Courtesy of  Christopher Halloran / Shutterstock.com

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