David Balto is an antitrust attorney, consumer advocate, and former Federal Trade Commission policy director.
On Thursday, the Supreme Court of the United States will issue a landmark decision on the Affordable Care Act, also known as "Obamacare." While there are several issues under review by the court, the hotly debated case revolves around the constitutionality of the individual mandate. This mandate, scheduled to take effect in 2014, would require that all individuals maintain a certain level of health insurance in order to expand insurance pools and help mediate costs. This forced purchase has angered opponents, as they argue that the bill sets the precedent for the government to dictate other types of purchases (most notable is their claim that Congress could one day force all Americans to buy more broccoli).
Regardless of the effect of the bill on future produce markets, when examining the actual data, it appears that the individual health care mandate would not be that far reaching. According to the Urban Institute, taking into account all of those that are already insured, the mandate would only impact 6 percent of the population, roughly 18.2 million people. That is far less than pundits would have you believe. Nevertheless, there remains a strong possibility that the Supreme Court finds the mandate unconstitutional. So, what would the Affordable Care Act look like without the individual mandate? Examining different segments of the population, let us see how individuals will benefit.
As has been often touted by the administration, young people will still be able to remain on their parent's plan until age 26. This is important for two reasons. First, it provides young people, who tend to be just starting out and thus have lower incomes, an opportunity to be insured. Second, young people tend to be healthier and more active individuals. Adding or keeping the younger population in health insurance risk pools will help bring down premiums for the rest of the population.
There are countless benefits for older members of society in the Affordable Care Act, but primary amongst these is the closing of a coverage gap known as the "doughnut hole." Whereas previously, Medicare Part D participants were paying full price for prescription drugs upon reaching the gap, seniors will now receive assistance as the doughnut hole is closed over a period of years. In 2011 alone, seniors who hit the doughnut hole saved an average of $604 dollars on their prescriptions, thanks to provisions in the act.
The act will also help the less fortunate members of society. The law expands Medicaid by requiring that all states allow individuals under age 65, with a median income at 133 percent of the federal poverty level, to enroll in Medicaid. Studies have found that 13.1 million adults and 3.7 million children will now have access to health insurance, many of whom would be unable to insured without the act.
Lastly, the general public will benefit from the formation of individual health insurance exchanges. These exchanges are based around the models used in many online travel agencies—such as Expedia or Travelocity—where consumers will be able to input their desired healthcare components and compare rates and packages from different providers. Such a model is not a new concept, as Massachusetts has been running their state insurance exchange—The Health Connector—since 2006, and with much success. The Affordable Care Act requires that each state establish their exchange by 2014, to assist individuals who can't get insurance through their employers.
It's clear that even without the insurance mandate, there is a lot to like about the consumer-friendly Affordable Care Act. These provisions will help protect consumers by expanding coverage and saving money while still ensuring quality care. So should the Supreme Court strike down the individual mandate come the end of June, consumers need not panic. The Affordable Care Act is still a strong piece of legislation that brings much needed reform to our healthcare system.
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