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The U.S. Supreme Court upholds the Affordable Care Act


The US Supreme Court ruled in June that the Affordable Care Act (ACA) is constitutional. Over the last several months, there has been a great deal of speculation about what the U.S. Supreme Court would decide on national health care reform. This decision ends that speculation and paves the way for the Affordable Care Act to be fully implemented.

One of the major issues before the court was whether or not it was constitutional to require individuals to purchase health care coverage or pay a penalty. This is commonly referred to as the individual mandate. The U.S. Supreme Court ruled that the individual mandate is constitutional on the grounds that the penalty was essentially a tax and that Congress has the authority to impose taxes.

The individual mandate is a key component of ACA and if it was stricken down, it would have been very difficult to implement national health care reform. This is because the individual mandate is built on spreading the risk of health care costs to everyone. If young and healthy individuals are covered it makes it possible to provide affordable coverage to individuals who are sick or have pre-existing conditions.

Another important issue decided by the court today was whether States who did not expand Medicaid to cover more people as required under ACA would lose their entire federal Medicaid funding. The court ruled that the federal government could not threaten to withdraw Medicaid funds from states if they don't expand Medicaid. Instead, the government could only withhold future funds. In California the Medicaid program is called Medi-Cal.

It is likely that California will continue efforts to expand Medi-Cal to cover more uninsured adults and children. The federal government will fully cover this expansion for the first few years of implementation and will cover up to ninety percent of the costs when fully implemented. This funding will greatly assist California in ongoing efforts to expand coverage to uninsured adults and children.

Major Provisions of ACA
There are several provisions of national health care reform that have already taken effect and others that will now be implemented in 2014. Highlights of those provisions include: prohibiting insurance companies form canceling policies when people get sick, ending the practice of charging women more for coverage than men, prohibiting insurance companies from denying coverage because of pre-existing conditions, providing free wellness visits, rebating seniors for some prescription drug costs, allowing parents to cover their adult children up to age 26 on their policy, and prohibiting lifetime limits on health coverage.

Next Steps
Given the US Supreme Court's decision, California will likely continue to lead the nation in implementing the national health care law. Many of ACAs provisions have already been enacted in California. Also, the California Health Benefits Exchange (Exchange) has been created and is gearing up to be fully operational in January of 2014. This is the health care market place where uninsured individuals and those with unaffordable coverage can go to purchase health care and can receive federal subsidies to help them pay their premiums. The Exchange is currently working on plans for outreach and enrollment as well as working to make sure that insurance products are provided that meet the federal standards and are affordable. The Exchange fully expects to be up and running in January of 2014.

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