On June 28 the U.S. Supreme Court found the Affordable Care Act’s individual mandate — requiring U.S. citizens and legal residents to maintain minimum essential health coverage — to be unconstitutional under the Commerce Clause in the 10th Amendment. The court, in a 5–4 decision, held that payments required of individuals who do not maintain minimum health coverage were not a penalty, but a tax allowed under Congress’ power to tax in Article 1 of the Constitution.
The entire act was upheld. If you are already covered by insurance, whether it’s through your job or your spouse’s, you won’t be subject to a new tax. The only Americans who are likely to end up paying a tax are going to be those without insurance.
However, in a state that prides itself on being healthy, outdoorsy and the national touchstone for eating sushi, millions of Californians will still lack insurance even after a massive coverage expansion.
According to a report in the Sacramento Bee, analysts have indicated that costs and premiums are projected to keep rising. And many of those who do gain coverage could have a tough time finding a doctor to treat them. California could see more than 5 million of the state’s 7 million uninsured residents obtain health coverage by 2019, according some state officials and health care advocates.
The ruling means billions of dollars in federal subsidies for such an expansion. However, about 3 million Californians are expected to remain uninsured. About 1 million of those won’t be able to afford coverage, yet will be ineligible for federal aid because of their immigration status, and the other 2 million probably won’t participate even if they are eligible, according to UCLA and UC Berkeley research.
Many Californians are still scratching their heads as to how the law will affect them, and can expect to be hit hard with advertising aimed at getting as many of them on healthcare rolls as soon as possible. Healthcare experts, according to the LA Times, maintain that, “Strong enrollment is crucial in order to ensure a mix of healthy and sick policyholders to keep premiums affordable. Without a diverse pool of customers, premiums will continue to escalate, turning off new applicants.”
Assuming Governor Jerry Brown chooses not to opt out of the exchange plans that come with the ACA, starting in 2014, California would receive as much as $15 billion a year to expand Medi-Cal coverage for an additional 2 million poor and disabled, and to provide federal subsidies to people buying policies in a state-run exchange.
Consumers will be guaranteed health coverage regardless of preexisting medical conditions, and insurance companies are required to spend at least 80% of premiums on medical care for individuals and small businesses.
Patrick Johnston, chief executive of the California Assn. of Health Plans, told the Bee that state officials must resist adding unnecessary requirements for health benefits that make policies offered through the exchange unaffordable.
There are also concerns about whether California will have enough primary-care doctors willing to treat patients. There are shortages of primary-care physicians in 74% of California’s counties, according to the California Medical Assn.
California Insurance Commissioner Dave Jones said that covering even a portion of the state’s uninsured should sharply reduce the amount of uncompensated medical care that’s driving up the price of health insurance.
On average, California families pay an extra $1,400 each in annual premiums to cover medical bills for the uninsured, according to a study by the California Endowment, a private health foundation that provides grants to California community-based organizations. The average premium for employer coverage in California has increased 154% over the last decade, more than five times the 29% increase in the state’s overall inflation rate.
“Employers are worried the law doesn’t go far enough to reduce the long-term cost trends,” said David Lansky, chief executive of Pacific Business Group on Health. “There is still a lot of work to do.”