Health Care Law in Plain English


After reading a Health Care Law article by attorneys Skindrud and Cleary in the Wisconsin Lawyer (12-11), I translated it into a plain English version for ordinary Americans.

“Obamacare,” as Republicans put it, was not written by President Obama, it was drafted by lobbyists, enacted by Congress, and handed to the President on March 23, 2010, for his signature. It is actually two laws: the “Patient Protection and Affordable Care Act” and the “Health Care Education Reconciliation Act.”

The purpose the new legislation is to cover most Americans with private health care insurance, and to reduce taxpayer subsidization for ER services, provided to the growing number of uninsured.

The law contains an individual mandate, requiring the purchase of health insurance. The idea of forcing people to buy insurance is not new. For nearly 100 years in Wisconsin, businesses have been under a government mandate to acquire Workers Compensation Insurance, from private carriers, to cover employees in the event of accidents at work. Employers also contribute to the Federal Unemployment Tax Act (FUTA) to provide for laid off employees. They must further pay the Social Security-Medicare system, under the Federal Insurance Contributions Act (FICA).

What is different about the new health care law is the individual mandate to buy insurance, as opposed to one requiring businesses to do so. The new Act raises Constitutional issues as to whether it exceeds the Congressional power to regulate Commerce, a question that will be ruled upon by the Supreme Court. While states have long mandated the purchase of automobile liability insurance or at least proof of financial responsibility, the opponents of the health care law may be able to show legal distinctions between auto and health.

For the most part, the new law does not kick in until 2014, when individuals must have “minimal essential coverage.” If they do not, penalties may be imposed for each month they went without it. The punishment will be based on a percentage of income, as reflected in annual tax returns.

Although most Americans will see no tax increase as a result of the new law, those earning $200,000, or more, will contribute a certain percent of income to help finance the new Act.

The federal Medicaid program for the poor, administered by states, but paid largely by Washington, will extend coverage in 2014 to those under 65, who are not disabled, if they earn 133% of poverty or less.

Each state will open up Health Insurance Exchanges in 2014, as a place for individuals, and businesses of up to 100 employees, to find affordable insurance. Larger employers must wait until 2017. Individuals and businesses will pay a portion of the premiums, up to certain caps, and to insure affordability, the government will pick up the balance owed to the insurance industry. Those at the poverty level will pay 2% of income in premiums; those at 400% of poverty will pay 9.5%.

Private insurance companies will be required to provide coverage for “essential health benefits,” without lifetime caps. Co-payments and deductibles will disappear in 2014. Children will no longer be subjected to pre-existing condition exclusions, and are now able to stay on their parents plan through age 26. Adults have to wait until 2014 to be free of the pre-existing condition exclusion.

To control health care costs, the government is pushing health care providers through Medicare reimbursements to abandon the fee-for-service system, reduce ER visits, eliminate duplication, and end unnecessary procedures. Payments for excess readmissions for conditions like heart failure will be reduced. The plan is to cut Medicare re-imbursement rates by 30% in 2012.

Although the goal of coverage to all is a noble one, the current conservative majority on the Supreme Court may in a 5-4 vote find the individual mandate unconstitutional. If the law is upheld, some previously without coverage will benefit, but the biggest winner will be the health insurance industry, since the federal government will subsidize their unregulated premiums. The government will probably also lose the struggle with the health care industry to lower reimbursements. While a single-payer system would have been better, and more efficient, we can only wait and see what develops under this law.

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