Why is Obamacare Still Here?

Since its inception, the Affordable Care Act has taken its share of hits. Multiple trips to the Supreme Court, not for profit Co-ops failing, for-profit insurance carriers leaving the marketplace, attempts to repeal the law in bits an pieces, and it is still here!

Some counties when the rates are filed in the coming months will find that they have no insurance carriers in some counties, States will then hope someone picks up vacant counties, but the law survives!
Republicans say they want to repeal it, actually did have the votes once, but President Obama vetoed it, and there were not enough votes to override the President. Mr. Trump becomes the President, Republicans control the House, the Senate and White House, but seem to be clueless on how the Senate works to repeal a law needing 60 votes. So they want to use Budget Reconciliation, to strip some of the laws powers, and they cannot get enough votes and the law is still here!

The rates for Health Insurance are high. Those who qualify for an advanced premium tax credit may not see the real cost. In Illinois a 55 year old who has to pay the full premium will be paying over $1000 per month for his health insurance. In Ohio, that person will likely pay over $800 per month, and in Indiana there are very few carriers and that person will likely pay over $900 per month.

In 2019, the individual mandate tax for not having a “Qualified Health Plan (QHP)” goes away, experts believe that that will increase premiums even higher. It is also likely that the law returns to the Supreme Court. In 2012, the high court heard National Federation of Business v. Sebelius. This was the case when Chief Justice Roberts was the deciding vote and decided that the penalty for not having insurance was a tax. Now that the tax has been eliminated it will likely be heard by the court again. Twenty states are now challenging the law in the courts, but for now it is still the law of the land.

The law is broken. The Republicans in 2016 ran on repealing the law, the Democrats ran on fixing it. Health care outcomes are not improving, premiums and deductibles are increasing, but access to health care is decreasing. More and more doctors and hospitals are refusing to accept the plans. Many families are suffering, but the law survives!

The ACA is still in place because Congress is not doing its job!! That is why some states are suing and trying to take back over the health care system. The fear of many is what will happen to pre-existing conditions. If the ACA gets repealed, then pre-existing conditions could come back. No one wants to bring back denying coverage out right, but that is the reason that the law has not been repealed. If the Republicans or Democrats or even better both, would replace the Affordable Care Act and specifically explain how they will deal with pre-existing conditions it will be easier to replace. Also, we need to understand what pre-existing conditions are. People claim well if I get sick then I will have a pre-existing condition. No!!! a pre-existing condition is something that happened BEFORE you had insurance.
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 addressed the pre-existing and canceling people because they get sick in section 2742. I will say this again… 1996!!! Yes, it has been illegal for an insurance company to drop someone because they get sick since 1996. Nancy Pelosi so famously said you have to pass the law to see what is in it. Well, they did not read HIPAA either, apparently.

The ACA and pre-existing condition fix is really pretty easy. Prior to the ACA, HIPAA had no pre-existing conditions if you had continuous coverage for at least eighteen months. This applied if you went from group health plan to group health plan or from individual health to group health, but it did not extend if you went from individual health to individual health insurance of if you went from group health to the individual market. The entire fix to the pre-existing condition clause is right there. Extend the HIPAA protections on pre-existing conditions to the individual market. Then the only people who would have pre-existing conditions would be those who chose not to purchase insurance when they were eligible ( either as a young adult with their first job or when they fell off their parents policy).

The Trump administration has been trying to loosen, the , burden for those who do not get subsidies. The first thing is the reinstatement of 364 day short-term plans. These were available until April of 2017. The Obama administration had allowed them and in October of 2016 had them modified. This was an attempt to send more people to the ACA plans. They were not considered a Qualified Health Plan and those who purchased them were still subject to the shared responsibility fine ( or tax). They will still not be considered Qualified Health Plan, but the fine is reduced to $0 effective January 1, 2019. The reduction in the fine was part of the Tax Cuts and Jobs Act signed in December of 2017. The new short term medical plans will be underwritten and will not cover pre-existing conditions. They will be an alternative to healthy people. They will not have all of the essential benefits offered under the ACA. Many carriers will be offering these plans with two renewals. There is also the possibility of Association Health Plans, in which small business can ban together and get health insurance. This one is a little more difficult as some parts of this could need Congressional approval. The other part is you need to find carriers willing to write them.

The Affordable Care Act seems to survive due to lack of education, political fear from each side of the aisle as to what happens if it is repealed and surprising that after almost a decade the Republicans cannot come up with a plan to replace it.

Eric Wilson
Eric Wilson
Eric has been serving clients throughout the country since 2004. He Specializes in Individual Health, Group Health, and Medicare, and planning a tax-free retirement. He is also an expert on the Affordable Act. I am passionate about what I do, and it shows in my work and proven track record. Want to learn more? Follow me on my social channels, or contact me directly - I’d love to hear from you!

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