by Senator Buddy Carter
Now it’s over.
With the re-election of President Barack Obama, we are now assured that his signature legislation, the Patient Protection and Affordable Care Act (PPACA), will indeed go into effect.
Having survived a challenge last summer before the United States Supreme Court from 26 states, including Georgia, that the law was unconstitutional, there are no more hurdles for the law to clear.
Like many others, state leaders in Georgia were awaiting the outcome of the Presidential election to decide whether to enact certain provisions of the law. Time has now run out- the PPACA is here and it is the law of the land.
One of the decisions to be made by states is whether to set up their own health insurance exchanges or to let the federal government set up and run the exchanges for them. This decision has to be made soon.
In fact, the deadline for informing the federal government of the state’s intentions related to state-run exchanges is this Friday, November 16th.
Late last week, U.S. Health and Human Services Secretary Kathleen Sebelius sent a letter to Governors informing them that states will have more time- until December 14th, an extra 28 days- to submit details for their state-run exchanges to the federal government.
However, the deadline to inform the federal government of the state’s intentions of running their own exchanges remains November 16th.
If a state fails to establish an exchange by January 1, 2014, the Department of Health and Human Services Secretary will establish and operate an exchange in the state.
Under the PPACA, health insurance exchanges are intended to make the purchasing of insurance more affordable and accessible.
The PPACA creates two different state-based exchanges.
- The American Health Benefit exchange- this will allow U.S. citizens and legal immigrants who do not receive employer based insurance or who do not qualify for public assistance to purchase an individual policy beginning in 2014.
- The Small Business Health Options Program (SHOP) exchange- this will allow small businesses with up to 100 employees to purchase coverage beginning in 2014, with states having the option of allowing businesses with more than 100 employees to purchase coverage through the SHOP exchange beginning in 2017.
States will have the option of choosing to establish a single exchange serving both individuals and small businesses or they may establish separate exchanges.
Plans sold through an exchange must meet certain requirements and insurers are to offer four levels of coverage that vary based on premiums, out of pocket expenses, benefits beyond the minimum required and a catastrophic coverage plan.
The PPACA survived the Supreme Court challenge last summer by being classified as a tax. Now those companies with over 50 employees who don’t offer insurance coverage will have to pay a tax. The Congressional Budget Office estimates that the employer mandate will cost businesses $52 billion in tax penalties from 2014 to 2019.
Critics contend that the cost of these tax penalties will ultimately be borne by workers through lower wages and fewer jobs, shareholders through lower profits and consumers through higher prices.
Of course, individuals without health insurance will be charged a tax as well.
The health insurance exchanges are a big part of the PPACA’s plan to have more Americans covered by health insurance.
Currently, those people at the poverty rate or below are eligible for Medicaid. With the PPACA, states can choose to expand their Medicaid roles to include those between 100% and 138% of the poverty rate.
Persons with incomes between 138% and 400% of the federal poverty rate will be eligible to receive premium subsidies to help them purchase coverage through an exchange. The subsidies will be on a sliding scale with such subsidies intended to limit out of pocket spending.
Critics also point to the cost of these subsidies- estimated to be $450 billion between 2014 and 2019- as harming the nation’s long term fiscal health by encouraging employers to drop coverage and perpetuating an already inequitable tax code.
Yes, the fat lady sang last Tuesday.
But for some reason I don’t think this is really over.