by Jessica AcMoody, CEDAM’s Policy Associate

On June 28, 2012, the Supreme Court upheld most of the provisions of the Affordable Care Act.  But what does this mean for you?  Here are answers to some of the most common questions.

Q: What is the Affordable Care Act?

A:  President Obama signed the Patient Protection and Affordable Care Act into law in March 2010, signifying the most comprehensive overhaul of health care in decades.  The bill focuses on the goal to expand coverage, control rising costs and improve the overall health care delivery stages.  The bill began the rollout of policy changes in 2010 and the rollouts are slated to be completed by 2018.  Some highlights of the provisions are:

•    The creation of health care exchanges, a one stop shop where people can go to find health coverage
•    Children up to age 26 will be allowed dependent coverage through their parents
•    Health plans will be prohibited from placing limits on dollar value of coverage (no annual or lifetime limits)
•    Co-pays for some preventative care will be eliminated
•    Insurance companies will be prevented from denying coverage due to pre-existing conditions and they will not be allowed to charge women more than men

Q: What is the Individual Mandate?

A:  The Individual Mandate requires that U.S. citizens and legal residents must have qualifying health coverage.  Individuals without coverage will pay a tax penalty, which will be collected along with Income Tax each year by the IRS.  The IRS can’t prosecute violators or place liens against them, however.  Its only enforcement option may be withholding money from refunds.

Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost tax plan option exceeds 8% of their annual income and those with incomes below the tax-filing threshold. Subsidies will also be offered for those who can’t afford coverage.

Q: Are employers required to provide coverage for their employees?

A:  Large employers (50+ employees) will have to pay a penalty if they do not provide comprehensive, affordable coverage to their employees. The health insurance exchange will begin operating in 2014.  It will enable small businesses to shop for health insurance among competing companies online or through a broker.  Under the Affordable Care Act, many small businesses are eligible for tax credits to help pay for employee coverage.  Eligibility for the tax credits is based on company size, average income for full-time employees and other criteria that may not apply to all employers.

Q: Will there be an expansion of Medicaid?

A:  The law calls for states to extend the program to everyone with incomes under 133% of poverty ($23,050 a year for a family of four) or risk losing federal funding.  That is about 17 million more people.  However, the justices ruled that the federal government could not take away the rest of a state’s Medicaid funding if it didn’t agree to add the new people.  Many doubt that the states will decline to take part in the expansion, since the federal government is paying almost the whole bill with federal tax dollars.

Q: What is next?

A:  The ongoing timeline for implementing the provisions of the bill will continue (a summary of the timeline can be found here).  States must now decide if they will set up their own health care exchanges, or if they want the federal government to do it for them.  Majority leader Eric Cantor, R-VA., said the House would vote on a repeal of the law July 11.  However, the House has voted 30 times already to repeal parts or all of the law, but the measures have gone nowhere in the Democrat-controlled Senate.  Republicans have said that if they are elected in November they will repeal the law.

For more information visit Healthcare.gov or the CEDAM issue brief on our website, which includes descriptions of the mandates as well as a more detailed timeline.

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