U.S. District Judge Henry E. Hudson became the first federal judge to rule the individual mandate provision unconstitutional. “The outcome of this case has significant public policy implications. And the final word will undoubtedly reside with a higher court,” he wrote in his ruling.
Republican governors across the nation launched legal challenges as soon as the reform was passed, arguing the government does not have the authority to require individuals to purchase health care plans.
At least 20 states representing a total of 14 challenges were filed. In two, federal district judges upheld the act, and cases were dismissed in the other 12.
“There have been and will continue to be a wide range of attempts to weaken this law. But as in previous court rulings across the country, I am confident that the Affordable Care Act will ultimately be sustained and will keep benefiting our middle class, our families, and our businesses, indeed every American,” said House Speaker Nancy Pelosi in a statement posted on her website.
Pelosi noted the judge declined to freeze implementation of the legislation during the appeals process, meaning the roll out will continue as planned.
Changing the Way Business is Done
Starting in 2014, every American will be required by law to purchase health care coverage. Those who cannot afford coverage, defined as those for whom coverage would cost more than 8 percent of their income, or those living below the poverty line, will receive government assistance.
To make insurance more affordable, state-based exchanges are being designed to offer better plans at lower costs to individuals and small businesses. Most additional plans will be purchased from these exchanges.
The goal of the health care reform is to change the status quo, where millions of Americans are either uninsured or under-insured. Middle class, middle-aged Americans not on employer plans, and those with pre-existing conditions are the biggest groups currently lacking coverage.
To complete the significant industry overhaul, a raft of regulatory changes, and a reorienting of both the health care and insurance industries are already underway.
Some seniors have already received $250 rebate checks under the act to help cover the costs of prescription drugs. The rebate applies to seniors stuck in what is commonly referred to as the Medicare “donut hole.” Under Medicare, costs between $2,700-$6,154 are not covered at all, while the bulk of costs under and over this range are covered. Legislation under the act will phase out the donut hole completely by 2020.
Tax credits to assist small businesses continue to provide affordable coverage to over 1.5 million employees during a phase out of limited benefit policies known as mini-meds, have been approved for distribution next year.
By 2014, mini-med plans, which cater to lower wage, part-time, and seasonal workers, and feature high deductibles and annual caps as low as $2,000, will be eliminated.
Insurance companies are also facing regulations that will inevitably require restructuring. On Nov. 22, Health and Human Services (HHS) issued a “medical loss ratio” provision, which will go into effect in 2011.
The provision requires insurers to spend 80 to 85 percent of consumers’ premiums on direct care, and/or improvements to care. Should insurers fail to comply, they are required to issue rebates to customers in 2012.
In October, the Centers for Medicare and Medicaid Services (CMS) announced the establishment of a new Center for Medicare and Medicaid Innovation to fund and direct pilot projects and establish best practices for health care reform’s boldest creation, that of Accountable Care Organizations (ACOs).
ACOs, encouraged on a voluntary basis under the act, but also favored under the act, are meant to improve the quality of care for consumers by uniting hospitals, private practice health care centers, and specialty centers under one umbrella. The goal is integrated care, prevention of redundancies due to enhanced information sharing, and the rewarding of efficiencies through cost sharing.
While the issue of cost sharing has already raised significant concerns, even among those from the Federal Trade Commission tasked with writing the rules, ACOs offer the promise of real reform if done right, according to supporters.
