The Affordable Care Act - what it means to you

In a dramatic and unexpected move , Supreme Court Chief Justice John Roberts sided with liberal justices Stephen Breyer, Ruth Bader Ginsberg, Elena Kagan and Sonia Sotomayor to allow most of President Obama’s health care law, the Affordable Care Act, to remain intact. Here are the essential features that may be of interest.

The “mandate” that everyone will need to buy insurance by 2014 was the most controversial part of the new law. The justices decided that it will remain under the taxing power of the government. Anyone who refuses to buy insurance will be taxed $95 in the first year, and subsequently more, until the tax reaches $695 or 2.5 percent of income, whichever is more. However, there will be federal subsidies for people who cannot afford insurance. Many uninsured people with pre-existing conditions will be eligible for insurance and will probably sign up quickly. If a substantial fraction of healthy young people also sign up, insurance companies will be able to even out costs and charge less.

Those politically opposed to the act will advise the public not to purchase insurance, which could result in higher premiums for those who do. This dynamic has already started, and it will greatly influence how the new law will work. Here’s a way for healthy young people to think about insurance: Their likelihood of having a heart attack and other chronic disease is low, so they can probably save money by just paying the tax. However, should they have a serious accident or develop an unexpected illness, they might receive expensive emergency hospital care, be ineligible for some important forms of treatment, and be burdened by large debts while recovering. Getting health insurance will avoid these problems. It is a smart and prudent option.

New money is being offered to states to help enroll people with limited finances into Medicaid programs. If a state turns down the new funding from the act, it can still keep its current federal Medicaid funds. Republican governors may want to turn down the new funds; however, hospitals and care providers are going to pressure them to accept the greatly expanded funding in order to have more of their patients insured.

California will benefit from the new funding for Medicaid — currently we have 7 million uninsured people, a number expected to fall by more than half by 2016 due to the new funds. There will be a substantial increase in the number of people insured by Medi-Cal, and county and University of California hospitals are working to improve their delivery of care. California plans to enroll more low-income seniors and people with disabilities into managed care. These plans must have a sufficient number of providers and be geographically near the patients. As this occurs, California and other states will face challenges in finding enough primary care providers to care for more insured people.

Coverage of children under 26 in their parents’ insurance policies is already in force and is very popular. Starting in 2014, people with pre-existing conditions will be able to buy insurance. Insurance companies will not be able to charge the sick more than the healthy, nor can they charge women more than men. Free wellness checkups will be part of all plans. Insurance companies will have to spend at least 80 percent of their revenue on medical care, which may limit their administrative costs and high executive salaries.

By January 1, 2014, states will be required to have new marketplaces, called exchanges, in which individuals and small businesses can examine a variety of competing plans, their costs and their policies, before purchasing them. States must begin talking to a federal hub that is being created to help determine who is eligible for subsidies. Within 10 days after the November election, states are supposed to report to the federal government on their readiness to set up the exchanges, and must get them ready in 2013. If a state does not comply, residents can access a federal “fallback” exchange. To get a subsidy, you must buy your insurance through an exchange.

Readers may be happy to know that California is a leader in working toward having an exchange ready by late 2013.

The Affordable Care Act is a start on the path towards healthcare for everyone. It is not as efficient as an expansion of Medicare for all, which would be like a single payer plan. It is extremely controversial, so we can expect a lot of political fallout in coming months. Republicans vow to overturn the ACA if they return to power. However, it is a great accomplishment of the Obama administration in the current political climate. Here’s one more compelling reason to vote in November.
Sadja Greenwood, MD, MPH

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