Health insurance California has radically changed in the last few years due to the creation and implementation of the Patient Protection and Affordable Care Act (PPACA) of 2010. A few good things have come as a result of the legislation however a few not so good things have resulted as well. There’s no doubt that our health care system needs reformed, but is the PPACA the right choice for America? Unfortunately we won’t know until the biggest part of the PPACA is implemented (e.g. guarantee issue eligibility for all applicants).
Here are some good PPACA provisions already in force: lifetime and annual benefit maximums have been removed for all medical policies whether employer/union or individual and family plans, more comprehensive annual preventive care is available at no charge before deductible, guarantee issue coverage for children up to the age of 19, and dependent children eligibility up to age 26 on their parents coverage. Most of these benefits have already helped thousands of Americans and will continue to improve lives.
The real problems we’re facing with health insurance California have to do with cost. Premiums, deductibles, out-of-pocket maximums and cost sharing rise annually. It’s no surprise considering the cost of health care rises every year, but when are the increases going to stop? It’s certainly nice to have the added advantages of the PPACA mentioned previously, but the real reason we purchase insurance is to insure against catastrophic situations (e.g. cancer, heart attacks, broken legs, emergency appendectomies). When plan out-of-pocket maximums begin rising above $10,000, the need for medical insurance may be put in question.
It’s safe to assume that most individuals can come up with $5,000 to $7,000 in the event of a catastrophe to cover the out-of-pocket maximum on their insurance plan. But, what we’re seeing now is companies marketing plans leaving one individual with out-of-pocket maximums upwards of $10,000 to $12,500. These plans are slightly more affordable but require a subscriber to come up with a lot of money if they should really need to use their plan. With the added benefits to health care as a result of the PPACA, out-of-pocket maximums and premiums will continue to rise. If a cap isn’t mandated on plan out-of-pocket maximums, the need for medical insurance may diminish.
For health insurance California and plans throughout the United States, a mandate to buy coverage will be effective on January 1st, 2014, assuming president Obama is re-elected and the PPACA is not repealed. People that have not purchased a health insurance plan by this date will be penalized by the federal government and have to pay a fee. Luckily health underwriting will be removed, thus granting all applicants guaranteed issue coverage. If marketed plans continue to propose large premiums and out-of-pocket maximums, individuals and families may choose to pay the penalty issued by the federal government and go without health insurance. It may be more cost effective to pay the government penalty and annual medical costs out-of-pocket versus paying high premiums for a health insurance plan that isn’t valuable.
There are a lot of uncertainties at this point as to what health insurance California will look like in 2014. The next year (2013) will be very telling, especially if vital parts of the PPACA are repealed due to the up-coming election. One thing’s for sure, the need for an affordable and quality health plan will be in demand. Regardless of what happens with health care legislation, California health insurance agents will still be present delivering quality services to plan subscribers. For help finding the right California health insurance plan at an affordable price, call your local agent today.
On Friday, August 12, 2011, a Three-Judge Panel of the U.S. 11th Circuit Court of Appeals in Atlanta issued an opinion, striking down the individual insurance mandate in the Patient Protection and Affordable Care Act (PPACA) as unconstitutional under the Commerce Clause of the U.S. Constitution, but upholding the remainder of the health care law. The Three-Judge Panel was composed of Judges Joel F. Dubina and Frank M. Hull, who together wrote the majority opinion, and Judge Stanley Marcus who dissented. Judge Dubina was appointed by the first President George Bush, and Judges Hull and Marcus were both appointed by President Bill Clinton. This is the first judicial ruling in which a Democrat appointed judge has ruled that the PPACA, or any portion of it, were indeed unconstitutional. In its ruling the justices focused on two main portions of the law.
First, the two-Judge majority concluded that the individual mandate was unprecedented in its scope and that no previous judicial precedent exists that would directly support the exercise of Commerce Power to impose this insurance mandate on individuals. “The individual health insurance mandate is breathtaking in its expansive scope,” the Judges wrote. Pointing to governmental precedents regarding commerce, the majority opinion stated:
“Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment, Congress never sought to require the purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods, or require every American to purchase a more fuel efficient vehicle.”
Second, the majority reasoned that the individual insurance mandate is beyond Congress’ authority under the Commerce Clause, because if it were allowed, these Judges could not conceive of any activity that Congress could not then regulate, which they suggested would make Congress’ power under the Commerce Clause unlimited. They then went on to state:
“From a doctrinal standpoint, we see no way to cabin the government’s theory only to decisions not to purchase health insurance. If an individual’s mere decision not to purchase insurance were subject to [Congress' authority to regulate under the Commerce Clause], we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument.”
Again, for those of you keeping score, there are now 3 ½ rulings that the PPACA is unconstitutional and 3 ½ rulings that the PPACA regulations fall within the scope of Congressional powers. An interesting outcome of the Three Judge Panel ruling on Friday was that based on its review of the entirety of the law, the Court found that the PPACA is actually composed of a series of independent statutes, under nine different Titles of the Act, which stand on their own, are completely separate and severable from the individual mandate, and are not invalidated by striking down the individual insurance mandate. The Court therefore upheld all the rest of the Affordable Care Act’s provisions, outside of the individual insurance mandate, overturning the part of the lower Florida Court’s judgment that struck down the entire health care law. This decision completely runs counter to the PPACA, as written, which specifically stated that the entire PPACA was to be enacted in its entirety or not at all. The typical severability clause, which written into almost every bill or contract, was intentionally omitted by the authors of the PPACA.
The government, or the plaintiffs, now have 90 days in which to file an appeal to this decision, and one or both sides certainly will appeal. So far, the reaction to the ruling can be summed up by the following two quotes:
Senate Minority Leader Mitch McConnell (R-Ky.) said the ruling “only strengthens and adds more momentum to the efforts of those of us who are working to repeal.”
The White House reacted in a blog post by Stephanie Cutter:
“Today, a different court ruled against the Affordable Care Act’s individual responsibility provision. We strongly disagree with this decision and we are confident it will not stand. The individual responsibility provision – the main part of the law at issue in these cases – is constitutional. Those who claim this provision exceeds Congress’ power to regulate interstate commerce are incorrect. Individuals who choose to go without health insurance are making an economic decision that affects all of us – when people without insurance obtain health care they cannot pay for; those with insurance and taxpayers are often left to pick up the tab.”
In answer to last week’s question on why 4 states—New Hampshire, Kentucky, Iowa, and Nevada were granted waivers from the Medical Loss Ratios (MLR) required by the PPACA, while North Dakota’s waiver request was rejected, I have the following suspicion: The 4 states that were granted the waivers are majority Democrat states, while North Dakota is primarily a Republican state. But those of you have been paying attention already knew that. While, that will never be the official reason, this will be the kind of politics that will be played out if the PPACA survives the legal challenges to it. This is also why the PPACA is so hotly debated on both sides of the issue. It is a watershed piece of legislation which will change the future course of America.
The legal challenges to the Patient Protection and Affordable Care Act (PPACA) are moving toward a final decision by the US Supreme Court.
The Thomas More Law Center has filed a petition asking the Supreme Court to review the decision of the Sixth Circuit U.S. Court of Appeals which upheld the constitutionality of Obamacare.
According to the appeal petition, “Review is necessary to establish a meaningful limitation on congressional power under the Commerce Clause….If the Act [the PPACA] is understood to fall within Congress’s Commerce Clause authority, the federal government will have absolute and unfettered power to create complex regulatory schemes to fix every perceived problem imaginable and to do so by ordering private citizens to engage in affirmative acts, under penalty of law….”
Specifically, the petition asks the Supreme Court to rule on the following questions:
1. Does Congress have authority under the Commerce Clause to require private citizens to purchase and maintain “minimum essential” health insurance coverage under penalty of federal law?
2. Is the individual mandate provision of the ACA unconstitutional as applied to petitioners who are without health insurance?
A Thomas More Law Center press release noted that the Obama administration will now have 30 days to file a response, and the Law Center will then have approximately ten days to file a reply. The case will subsequently be submitted for a decision by the Justices as to whether the petition should be granted. The Law Center predicts that “if granted, the case will in all likelihood be briefed, argued, and decided in this upcoming term, with a decision rendered prior to the Court recessing next summer.”
Small business owners are fighting back against the massive regulations which the PPACA requires of them. The NFIB is joining a coalition of small business groups to expose the cost involved to comply with the PPACA. Their tactic will be to explain to the public the expenses involved in complying with the PPACA and how these costs hinder small businesses from retaining existing or hiring new employees. With the economy, and specifically job creation, a high priority for most Americans and claimed as such by many politicians, this could be a significant campaign to help elect politicians who understand that governments can effect job growth through reducing regulations. I wish them success in this venture.
Individual states are asking for, and receiving waivers exempting them from complying with mandates required within the PPACA. The Center for Consumer Information and Insurance Oversight (CCIIO) has now issued five waivers from the medical loss ratio (MLR) requirements of the PPACA. In March, CCIIO issued its first waiver to Maine, and through July 2011 has issued waivers to New Hampshire, Nevada, Kentucky, and Iowa. A waiver request from North Dakota has been denied. Waiver determinations are still pending for Louisiana, Guam ( really, GUAM?), Kansas, Delaware, Indiana, Florida, and Georgia.
Question: What do the five states that have received waivers have the North Dakota does not have, so that the CCIIO rejected their waiver request? Answer will be provided next week.
MLR is calculated as the cost of health care services provided as a percentage of premium revenues. In general, the higher the MLR, the more an insurer spends on claims reimbursements and the less it spends on administration and marketing, or retains as profit. The ACA established an 80% MLR beginning in 2011. The states that were granted waivers are allowed to have MLR’s ranging from 60-75%. Makes me wonder why the PPACA was passed in the first place, if so many waivers are being granted to so many states and companies who claim that they cannot the standards set by the law. But then, I try to be logical.