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Obamacare, the Mandate & Perspective
Author: Raine    Date: 10/25/2013 17:59:38

In June of 2012, The Supreme Court Ruled that the Affordable care act was indeed constitutional. That included the much disputed individual mandate that people be insured. It was upheld. ObamaCare would go forward as written with one exception, States could opt out of the feederal Medicaid expansion. Today I'd like to focus again on the Individual Mandate.
Chief Justice John Roberts joined with the court’s four liberal justices in the ruling, which says Congress had the authority to impose the law’s individual mandate under Congress’s taxing power.

There was one rebuke to the Obama administration: The court ruled that the states can reject the law’s Medicaid expansion.
Many states opted out of the expansion, thus putting the onus of the exchange on the Federal Government. They will not see the benefits of the expansion. Many will be exempt from the individual mandate penalty.

It is beneficial for people to understand the number of people that will be affected by the Individual Mandate slated to go into effect in 2014. That deadline is March 31, 2014. This is the individual mandate. Basically, if you or your family do not have insurance by a set time you will be required to buy an insurance plan or pay a penalty.
Q. I don't have health insurance. Will I have to get it, and what happens if I don't?

A: Under the legislation, most Americans will have to have insurance by 2014 or pay a penalty. The penalty would start at $95, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016. This is the individual limit; families have a limit of $2,085 or 2.5 percent of household income, whichever is greater. Some people can be exempted from the insurance requirement, called an individual mandate, because of financial hardship or religious beliefs or if they are American Indians, for example.

How many people will be affected by the Individual mandate? Let's start by looking at who is not required to purchase insurance. Among the exemptions:
These include individuals who will be exempt for religious reasons -- for example, Christian Scientists; incarcerated individuals; undocumented aliens; individuals who can't afford coverage (i.e., their required contribution would exceed 8 percent of their household income); individuals who will be without coverage for less than three months; other individuals deemed to be in a "hardship situation," as will be defined eventually by the Secretary of Health and Human Services (Update: "hardship situations' have been defined); individuals with incomes below the federal tax-filing threshold; and members of Indian tribes.
After that, take away people who are covered by employee-sponsored health insurance and those that will have been deemed to have the basic minimum insurance such as those on Medicaid, Medicare and Veterans Benefits. Let's see approximately how many people will be required to purchase the basic essential coverage: the Mandate.
In the final analysis, the Urban Institute researchers concluded, 18.2 million Americans -- 6 percent of the total population -- will be required to newly purchase coverage or face a penalty. Of that number, 10.9 million will be eligible to receive federal subsidies to help pay for coverage. Just 7.3 million people -- 2 percent of the total population -- will have to newly buy coverage under the ACA and won't receive any federal assistance to pay for it.
2% -- that's it. 2% of people would be required to purchase insurance at face value. Of that 2%, the poorest and most vulnerable are not included. Religious objectors are not included. Prisoners are not included. Small businesses with less than 50 employees will not face penalties. In July 2013 the courts upheld the employer mandate for larger businesses:
The Circuit Court’s decision in favor of the employer mandate came just nine days after the federal government put off for a year, until January 1, 2015, that requirement, which applies to employers with more than 50 employees. If such employers do not have coverage by the deadline, they face penalties of up to $2,000 for each employee.
The first 30 employees are exempt from that penalty. The employer mandate is totally separate from the individual mandate. Often, these two things get conflated.

As stated above, 2% of the population would have to face this penalty should they choose not to purchase insurance. Statistically, they can afford it. When you think about it, the penalty is a pretty sweet deal compared to the cost of purchasing health insurance before the ACA, and the subsequent Insurance Exchange (which was deemed constitutional in 2012) was implemented on the first of October. According to Kaiser Health:
The average cost of a single health insurance premium in 2009 was $4,824. Patients with health insurance provided by their employers typically don't pay the entire cost themselves. For family insurance plans in 2009, workers paid an average of $3,515 of the cost. For single plans, employees paid an average of $779. People who buy their own insurance see lower premiums---though they typically don't have an employer contributing---and higher out-of-pocket costs, according to second survey by the Kaiser Family Foundation of 1,038 people conducted in 2010. According to the survey, the average cost for a single-coverage insurance premium was $3,606. For family premiums, the average cost was $7,102.

The idea of getting everyone insured is meant to help spread the risk, thus reducing insurance premiums over the long term. Last June, we found out that the ACA has played a part in seeing for the first time since the 1970's, a decline in medical care costs. New York - a state that has decided to set up its own exchange by accepting the medicaid expansion - is set to see a 50% average drop in rates.
State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.
This is important. It's why people have been encouraged to get insurance. It's why people are being encouraged to shop around for private insurance: it increases competition. The cost of health insurance is dropping, no matter the reports to the contrary, it is happening.

There are a lot of great and educational stories here.

I just wanted to point out that what is being debated is actually less than 2% of the population that may be required to purchase individual insurance fully out of pocket. 6% total including subsidization, as mentioned above. This all seems like a lot of hoopla to protect the 2%.

People who have no insurance right now -- those people are the ones that really need the ACA. People who already have insurance can shop for more affordable insurance. They will not go without. The many people complaining about the mandate and it's penaly most likely already have or provide insurance. Individuals most likely can afford the penalty, (should they choose) and employers can make the choice: pay the fine or invest in your employees as a worthwhile investment in your business.

It's really that simple. There is nothing wrong with wanting everyone to have insurance in order to access the best healthcare in the world. Until Single Payer comes around, this is what we have. It's a helluva lot better than what we had before when we saw far too many headlines like this: Medical Bills Are the Biggest Cause of US Bankruptcies: Study or stories of people who were denied health insurance due to pre existing conditions. In 2009, it was estimated that 45,000 people died from lack of health coverage In the United States of America.

Putting it in perspective, the mandate is a very VERY small price to pay, literally and figuratively.

and
Raine
 

58 comments (Latest Comment: 10/25/2013 22:44:54 by Raine)
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