Obamacare Upheld by US Supreme Court

by: Prince, Glover & Hayes Monday, July 9th, 2012

On June 28, 2012, the U.S. Supreme Court held constitutional the Patient Protection and Affordable Care Act signed by the President on March 23, 2010. The most controversial part of the law is consequences for not maintaining health insurance. Contrary to the common misconception, an uninsured will not be subject to criminal punishment or a fine. Instead, for an individual who does not maintain health insurance, beginning 2014 the only consequence is additional payment to the IRS when he or she pays taxes. According to Chief Justice Roberts, “[n]either the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.” Under the Act, an uninsured would owe the IRS $95 for 2014, $325 for 2015 and $695 for 2016. Families who fall below the income-tax filing thresholds would not owe anything. Nor would people who cannot find a policy that costs less than 8 percent of their income. Of course, the law is not perfect, but it does offer some benefits:

1. The Act created Pre-Existing Condition Insurance Plan to make health insurance available to people (including children under 19) who have been denied coverage by private insurance companies because of a pre-existing condition;
2. The Act allows children up to age 26 to stay on a parent’s plan even if they are married, attend school, don’t live with the parent or are eligible to enroll in their employer’s plan;
3. It limits how much of the premium the insurer can spend on things other than providing health care and improving its quality;
4. Under the law, annual and lifetime limits on most benefits are prohibited in any health plan or insurance policy issued or renewed on or after September 23, 2010;
5. Under the Act, if you have Original Medicare, you can receive some services for free;
6. The law provides tax credits to small businesses. For example, businesses that have fewer than 25 employees and provide health insurance, may qualify for a tax credit of up to 35% to offset the cost of the insurance;
7. The Act prohibits an insurer from cancelling insured’s coverage solely because of an honest mistake made by the person or his or her employer on insurance application;
8. The law allows you to choose any available participating primary care provider as your doctor and to choose any available participating pediatrician as your child’s primary care doctor;
9. The new rules prevent health plans from requiring higher copayments or co-insurance for out-of-network emergency room services.

Most of these provisions apply to all insurance plans whether obtained before or after the law was enacted on March 23, 2010. However, plans obtained before the enactment date, “grandfathered plans”, will not enjoy some benefits of the Act such as the choice of healthcare providers, elimination of the pre-existing condition exclusion for children under 19 years old and a requirement to provide certain preventative services for free.
Full text of the Act is available at http://housedocs.house.gov/energycommerce/ppacacon.pdf

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