March 23, 2010 marked the adoption of the Patient Protection and Affordable Care Act (PPACA), now better known as the Affordable Care Act (ACA) or Obamacare. For the medical insurance community and American citizens, it was a date that would entirely upend the understanding and implementation of medical insurance for both corporate America and individuals buying medical insurance.
Today, ten years later, the dust has hardly settled. To the contrary, healthcare providers and insurers will be closely watching the presidential election and high court rulings. If re-elected, President Trump is likely to continue undercutting or perhaps even pressing Congress to abolish the legislation. And shortly after the election, the U.S. Supreme Court will hear arguments in a case, California v. Texas, that could overturn the act entirely.
A Look Back
Let’s briefly review what the legislation has meant.
For those of us in the industry, the introduction of Obamacare a decade ago meant mastering a mountainous pile of new rules and regulations. As a health insurance broker, for the first few years I was inundated with calls and emails from my clients – most of which were small- to medium-sized business owners – asking me to explain how the new law would affect them and their employees. Countless hours were spent on meetings and thousands of trees were killed to assist in the explanation through reams of paper presentations.
Today, questions about the ACA have slowed, and the angst among many insurance professionals has waned. And even a skeptic must admit the ACA has a few features that are gems, which I regularly point out to our group insurance customers.
One of those gems is that it allows children through age 26 to stay on their parents’ medical insurance plans regardless of whether or not they are in school, their marital status or any of the previous eligibility restrictions. The second gem, in my opinion, is one that really helps the health of this country: routine preventive care without charge. That means no deductible charges, no co-pays, and no co-insurance – FREE.
Why is this so important? Because now the financial excuse for Americans not wanting to pay for routine mammograms, colonoscopies and other routine annual exams is gone. I believe that many people didn’t get these routine preventive care services before the ACA because they may have felt healthy and didn’t want to have to pay a deductible first, and then either a co-pay or co-insurance for medical services they often felt were unnecessary.
Many felt fine until diagnosed with stage-4 colon cance.r and died shortly thereafter. Others now wear a colostomy bag unnecessarily because they didn’t feel the need to get checked out. Both situations are often preventable with early detection of a simple colonoscopy exam. There are countless similar stories. Anybody reading this who is over age 50 and who have never had a colonoscopy – please schedule and get the exam.
The third and final gem of the ACA, in my opinion, is the removal of care limits. Before the ACA, some people with chronic health problems ran out of insurance coverage. Insurers set lifetime limits on the amount they would spend on an individual patient. Today, insurance companies can no longer maintain a pre-set dollar limit on the coverage they provide their customers.
The Individual Mandate
One area of the Affordable Care Act that came under fire by many was the individual mandate. This part of the Act required every American, with some exceptions, to have medical insurance – whether through an employer or individually purchased on an exchange. It’s been reported that due to the individual mandate, 16 million Americans obtained health insurance coverage within the first five years of the legislation.
Young adults make up the largest percentage of these newly insured people. Many of them were eligible for government subsidies if policies were purchased on the government health insurance exchanges. At first, the exchanges were overwhelmed with applicants, causing some to crash. It took several months to improve the application process and begin issuing health insurance policies. In some instances, government subsidies were so great that the policy holder paid nothing for the coverage. Others paid just a few dollars with taxpayers picking up the balance.
However, in 2017 Congress passed tax legislation removing the individual penalties for citizens who choose not to purchase health insurance, effectively crippling the individual mandate. Today, for most states*–starting with the 2019 plan year (for which you’ll file taxes by July 15, 2020) –the individual mandate no longer applies.
This brief overview of the ACA hardly scratches the surface about the many aspects of the legislation. It is far reaching, and even after ten years it still needs review and modification. So, it stands to reason that anything first developed will have some advantages and disadvantages. It’s also important, however, to know that any Act of this magnitude will undergo multiple stages of systematic review and evaluation to assure that all Americans have access to affordable health insurance.
What has Obamacare meant for your organization? What provisions have been most important to your company, and which would impact you the most if they were changed?
I’m always happy to guide you through the ACA and any other insurance market complexity you might encounter, and help you craft the right coverage for your organization. Make a call today: (248) 265-5443.
*Note: Some states have their own individual health insurance mandate, requiring you to have qualifying health coverage or pay a fee with your state taxes for the 2019 plan year and beyond. Check your state laws to see If you live in a state that requires you to have health coverage.
