The Health Care Reform Ruling and Me

The dye is cast. The Supreme Court has ruled that health care reform and the individual mandate are constitutional. What does this mean for every American like you and me?

It will be hard to say that it will work for the better or that it will work to our disadvantage because the reform means different things to different people. Some stand to gain while some believe that it will just make matters worse for our healthcare system and pose a threat to the people’s freedom.

Those that will benefit the most from health care reform are those who want to be insured but are having a hard time acquiring coverage – either because they have a pre-existing condition or they simply can’t afford to pay the premiums and the out-of-pocket costs. The Affordable Care Act wants to ensure that almost all Americans are covered with health insurance. The new law plans to make every way possible for everyone to acquire coverage- through subsidies, health exchanges, or Medicaid expansion.

Expect more taxes. To support the provisions of the new law, more taxes will be collected. Families with income below 400% of the FPL (federal poverty level) will be given financial aid to pay their premiums. Where will they get the money to fund this? From Americans who decide to forgo insurance and will therefore need to pay a penalty through tax.

Forbes.com gives a clear example:

“A family making $92,200 has a maximum premium contribution of $8,759 a year. The cost of coverage does not matter because the premium tax credit picks up the rest – insurance can cost $20,000+ a year and the maximum the family will pay is the percentage stated above.  Can a family of four making $92,200 per year afford to pay $8,759 for insurance? If they decide to forgo coverage, they will have to pay the tax. The people who can least afford it – those making less than 400% of the poverty level – are the ones most likely to be subject to the tax.
So how much is the tax?

• 2014 – $95 or 1% of income, whichever is greater.  A family of four making $92,200 will owe a tax of $922 if they do not carry coverage.
• 2015 – $325 or 2% of income
• 2016 forward – $695 or 2.5% of income”

(report by Carolyn McClanahan)

When will we feel the full effect of the new health law?
The health care reform has several provisions. Some of these had already been implemented such as allowing dependents to stay on their parents’ policy until age 26. However, the mandate that requires everyone to purchase a policy or pay a penalty will become effective in 2014.

The law will grant exemption to a few Americans. Those belonging to these groups will not be required to buy health insurance:

• American Indians
• Those whose religious beliefs are against health insurance
• Americans who are imprisoned
• Those whose premiums are more than 8% of their income
• Americans who have very low income

Given these changes, it’s crucial to have comprehensive health insurance coverage in place, not only to comply with the law but to ensure access to essential healthcare services and financial protection in case of illness or injury.