President Obama’s push for the Affordable Health Care Reform Act was passed by the US Supreme Court on June 28 with a ruling of 5 to 4.  And while many are not big fans of this historic ruling, we are the first to acknowledge that it will have a substantial impact on the lives of millions of individuals, families and businesses with regard to how they purchase health insurance.  But does anyone really understand it? 

Let’s examine a few of the more notable points of this bill, and moreover how they will affect people in Illinois and throughout Chicago.

In a nut, all American citizens and legal residents will be required to purchase health insurance.  Those who do not, face fines of up to 2.5% of their annual income.  Much of the confusion stems from the court’s statement that people may choose to not support the mandate by simply not paying the tax.  Regardless, this decision means that health insurance in IL will no longer by a luxury--it will be a requirement punishable by strict fines for those who do not comply.

IL Health Insurance Exchanges

Health Insurance Exchanges are being established to allow individuals without health insurance to shop for healthcare from a variety of major carriers.  When you strip away all of the red tape that defines the Affordable Care Act, this ultimately means that those who currently have IL medical insurance may see sharp premium increases, while those who remain uninsured will have the option of buying insurance through government health insurance exchanges. 

It’s important to remember that, while the constitutionality of the Affordable Care Act (ACA) was upheld by the US Supreme Court, funding is still required by congress.  No funding, no bill.  It’s very simple.  Keeping in mind that the US Congress has an approval rating that typically hovers under 10 percent, the process of funding the ACA should be just as heated as the process of getting us to this point. 

Changes for Seniors and Medicaid

The healthcare reform also affects Medicaid, as it was ruled that the federal government cannot force states to expand their existing Medicare coverage, nor can they penalize states for non-compliance.  The bill was originally looking to expand Medicaid to all persons under the age of 65 who take in less than 133% of the national poverty line—which is approximately 30K annually based on families of four.  Interestingly enough, the federal government can, in fact, allow new funds to be held from states refusing to comply.  It has been estimated that this will prevent an estimated 16 million US citizens from getting Medicaid coverage.

The bill’s passing will also make it less likely for businesses with under 50 employees to offer group health plans.  Several of the business owners we have spoken with have stated that, with employees soon being able to purchase medical benefits via the healthcare exchanges, it doesn't make much sense to deal with the hassles and expenses associated with offering employer-provided health plans.  In contrast, we and many businesses feel that offering a solid health benefit plan, with extensive coverage, remains one of the best ways to attract and retain the most talented new employees.  Considering what a key and determining factor this is, it will be interesting to see how group coverage fares in 2013.

Pre-existing Conditions

Pre-Existing conditions are another critical point of the Affordable Care Act passing.  Health insurance carriers may still deny coverage to individuals and families until the Act takes effect in 2014.  However, they will not be able to deny coverage after the ACA goes into effect. This means that coverage for preexisting conditions would be covered from day one, going forward.  Good news to those who might otherwise be denied coverage; an expense which will more than likely be funded by rate increases on current health insurance policy holders.

We understand what a confusing and overwhelming change this is, and we know that you have questions.  Regardless of whether you love the bill or hate it, we want to help you make the transition as painless and affordable as possible.  We encourage anyone in Illinois or the Chicago area with questions on how the Affordable Care Act will affect them, to contact us.  Our agents are experts on the healthcare reform act, and will be more than happy to answer your questions or help you better understand the changes that are taking place.