What is going on with the national health insurance program?

The Affordable Care Act (the Act) was passed into law on March 23, 2010. It makes fundamental changes to the way Americans will purchase and receive medical services and to the way, those services are delivered.

It features comprehensive health insurance reforms that will roll out over the coming decade, however most changes will be implemented by 2014. Chief among these is granting of health care coverage to the many millions of Americans without health care coverage. Parts of the law have already been implemented and others are still to come.

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How will the Act work?

The Act will require the states and several federal agencies to start new programs and modify others concerning health care in the United States. It does the same with the private insurance industry. Some of these have already been implemented.

These changes result in a much larger role for government in regards to health care. Significant new regulations and bureaucracies are being created to implement the changes. The full text of the Act can be read or downloaded here.

When do the changes take effect?

Some changes have already taken place. In 2010, small business tax credits were enacted to help them in providing insurance benefits to their employees. This tax credit amounts to 35% for businesses and 25% for some qualifying non-profit organizations. In addition, that year, individual states were given matching funds to cover qualifying low-income individuals under Medicaid that didn’t get federal funds before. It is important to note that one of the most controversial portions of the law, the Individual Mandate, has yet to be implemented.

Another important piece of the law that has become law is the section prohibiting insurance companies from rescinding coverage due to technical flaws found on a customer’s application for health insurance. Insurance companies agreed to stop this practice after media reports made the issue nationally prominent.

An important piece of the Act was recently discarded as too expensive and unworkable. That section of the law was the Community Living Assistance Services and Supports (CLASS) that was designed to assist people with long-term health issues who wished to remain at home and not go into a nursing home care or assisted living facility.

CLASS was to have been paid for by working people who could elect to have money taken from their paychecks to pay for it and no government money would be needed. Premiums were supposed to have ensured the solvency of the program over 75 years. Studies indicated that too few workers would sign up for it, and it therefore could not be sustained.

What will it cost the taxpayers?

The Congressional Budget Office (CBO) has estimated a cost of nearly one trillion dollars over the next ten years to pay for the Act’s provisions. Claims that it will reduce the federal deficit are disputed, some see massive savings, others see massive cost increases that will make tax hikes necessary. There are some indications that the true cost will be closer to two trillion dollars, because the true costs of benefits will kick in later than the initial costs reported by the CBO. You can examine all the relevant documents at their site.

What about legal challenges to the law?

There are many legal challenges to the Act, most focusing on the individual mandate that will require all Americans to buy health insurance or face taxes and fines for not doing so. The mandate has been found both constitutional and unconstitutional by several federal and district judges.

The main issue is Congress legally allowed to force citizens to purchase a commercial product using the Commerce Clause as its source of authority. Groups opposed to the Act have singled out this part of the law as their main objection; they feel that without the individual mandate, the entire law crumbles.

Part of this debate is whether the charges imposed on individuals for noncompliance are fines or taxes. The various lawsuits almost certainly appear to be headed to, and heard by, the United States Supreme Court, which will have the last word.

To find health insurance quotes online quickly and easily, simply type your zip code into the free box on this page to compare rates now!