On June 28th, 2012 the US Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (“Obamacare”) including its key requirement that all Americans purchase health insurance starting in 2014. This requirement – often referred to as the “individual mandate” will allow the US to restructure our health care system to move closer to the ideal of a functioning insurance system where risk is spread and diverse participants with high and low medical care usage patterns contribute to the premium base. The provisions of PPACA that limit the amount of overhead and profit that insurers can build into premiums above the amounts they need to cover medical care for their policyholders) will help reduce the crippling cost of health insurance.
Under this landmark ruling, insurers will be required to accept all individuals regardless of their health conditions starting in 2014. Federal premium subsidies will help lower income individuals and employees pay for insurance. This decision is a win for Californians and California businesses. Insurers will rebate premiums in excess of 80% of their 2011 health care costs to small business and individual buyers by August 1st. Planning can continue for the implementation of the Individual Health Insurance Exchanges and Small Business Health Insurance Exchanges in 2014. California’s participation in the extension of Medicaid to individuals and families below 133% of poverty level also will benefit policyholders and businesses. California residents and businesses have been paying a significant hidden cost in their premiums as hospitals shift their unreimbursed costs for uninsured to the private sector.
Most importantly, the progress and improvements underway in the states that have been implementing PPACA will continue moving forward. Adult dependent children, people with pre-existing conditions, and people who’ve been unable to afford or find available health insurance can breathe easier. Politics aside, congratulations to every American!