The Affordable HealthCare Act (ACA)

Part 2 of a 7-part series
The good news and bad news of health reform for 23 key groups (groups 1-7)

In 2000, about 38 million Americans did not have health insurance. That number skyrocketed to 50 million by 2010; with 13 million of that number being illegal immigrants. Thus, the Patient Protection and Affordable Care Act (PPACA) commonly known as Health Care Reform or the Affordable Care Act (ACA) was put into law to combat that trend. It was designed to give employers and people of all income levels numerous changes to the health insurance marketplace to improve their access to affordable and comprehensive health insurance coverage. At its inception in March 2010, lawmakers estimated that those changes would extend health coverage to approximately 32 million citizens; leaving another 23 million people still uninsured.

With that 23 million in mind, ACA has future goals to become universal by creating ways to bring the remaining uninsured into the system. For now, though, let’s focus on the 32 or so million people to be covered. Will they or will they not actually benefit from this historical piece of legislation that required a tremendous number of amendments to get passed; raised havoc between the opposing parties in Congress; and still has enormous amounts of its bill yet to be defined? Well, let’s take a look.

There are basically 23 key groups the ACA affects. We’ll look at the first seven now; another seven to nine in my next blog; and the remainder after that. The bill is so massive I can’t possibly touch on all the features for all the groups, but I will attempt to jot down a few.


For those who already have health insurance

The good news is that:

• there will be a lot of NEW benefits and protections added, i.e. premium tax credits; guaranteed availability and renewability; and features that prohibit discrimination and pre-existing condition rejections.

The bad news is that:

• with the rising costs associated with those additional benefits, many employers may drop their employees’ coverage
• some Medicare benefits may disappear and so will the doctors who previously serviced those patients
• with the influx of Medicaid enrollers, the quality of service could be challenged due to fewer providers being overwhelmed

For the uninsured

The good news is that:

• low-income uninsureds can purchase Medicaid or a subsidized plan offered through the state exchange marketplace (if a state doesn’t have an exchange then plans would be offered via the federal government)
• high-income uninsureds can purchase a plan via the state exchange marketplace that would be less expensive than from a private provider because they’re purchasing it as a member of a pool of buyers (if a state doesn’t have an exchange then plans would be offered via the federal government)
• adult dependents younger than 26 can now be covered on their parent’s policies
• children with pre-existing conditions are now safe from exclusion, plus they will be offered preventative measures at no additional cost
• there are no financial penalties for not having health insurance if you are uninsured for only a brief period of time (3 months or less)

The bad news is that:

• if you are eligible for coverage through an exchange and don’t purchase insurance, then you are likely to suffer a penalty tax—which for many, will be more than just buying the subsidized insurance

For senior citizens

The good news is that:

• Medicaid coverage for prescription and some preventative care services will expand
• insurers will be restricted on how much they can charge in premiums to seniors
• the donut hole is closing and will be completely closed by 2020

The bad news is that:

• over the next ten or so years, the forecasted $700 billion to fund ACA will be extracted primarily from Medicare benefits

 

For tax payers

The good news is that:

• premium assistance is offered in the way of refundable tax credits
• because of the homeowner’s exemption (put into law by President Clinton) for individuals selling their home, the new 3.8% surtax (see below) would be null and void for them

The bad news is that:

• half of ACA’s funding—approximately $400 billion—will comprise of taxes and fees
• as of January 2013, the new 3.8% surtax for married filers with capital gains above $250,000 will help for this health reform

For the affluent

The good news is that:

• there will be a lot of NEW benefits and protections added, i.e. guaranteed availability and renewability; and features that prohibit discrimination and pre-existing condition rejections

The bad news is that:

• singles earning greater than $200,000 and marrieds earning greater than $250,000 will pay an increased 2.35% above those income thresholds in taxes to help fund ACA
• this group will experience higher Part D premiums
• for those individuals desiring extravagant “Cadillac” health plans, the tax increase rate for those jumped from zero percent to 40%.

For the working class

The good news is that:

• individuals and families whose incomes are too high to qualify for Medicaid, but not enough to afford private health insurance, will now be able to purchase subsidized plans offered on the state exchanges
• individuals and families who have incomes that are too high to qualify for Medicaid, but below 400 percent of the poverty line will receive “premium credits” to lower the cost of health insurance in the new health insurance exchanges.
• low-income and moderate-income individuals and families, who do not have employer-based insurance and who do not qualify for Medicaid or Medicare, will receive “premium credits” to lower their cost of health insurance

The bad news is that:

• ACA’s new consumer protections and benefits will cause insurers to pass costs onto the working class in the form of higher premiums
• some workers may unfortunately have their coverage dropped by their employers who will opt to pay the $2,000 per worker no coverage fine, if it is more financially advantageous for them to do so

For the poor

The good news is that:

• millions more low-income parents and non-disabled low-income adults without dependent children will be eligible for health coverage through Medicaid, due to Medicaid eligibility being raised to 133% ($14,856 for a single person in 2012) of the federal poverty level ($11,170 for a single person in 2012)
• all legal residents younger than 65, and therefore not eligible for Medicare, can be insured through Medicaid if meeting the Medicaid eligibility of 133% of the federal poverty level

The bad news is that:

• as low-come individuals’ paychecks rise to 400 percent of poverty ($44,680 in 2012),financial assistance cuts off entirely; while medical and prescription expenses continue to rise disproportionately, leaving these individuals paying thousands of dollars in out-of-pocket costs per year—over and above their insurance premiums and deductibles

My next blog will cover the good news/bad news for seven to nine more key groups. Stay tuned!