Today's big news: The US Supreme Court issued an opinion upholding the Patient Protection and Affordable Care Act, aka Obamacare. Details after the jump.---
Today's ruling (click here to read all 193 pages) has big implications for the nation's health care system, the 2012 presidential campaign and New Mexicans in particular. Here's our point-by-point analysis:
Why is this ruling important?
First, it wraps up a long debate over the Affordable Care Act, which Obama signed into law back in March 2010. At the center of that debate is whether the federal government can require Americans to have health insurance, a part of the law known as the "individual mandate."
So, can the feds make me buy health insurance?
According to the ruling, yes. The court makes a key distinction, however, in the rationale for allowing the law to stand.
According to the Commerce Clause of the Constitution, Congress has the power to regulate commerce between the states. Since health insurance falls under that distinction—you may have coverage from an out-of-state provider, or your coverage may extend to you even while you're traveling elsewhere in the US—the authors of the law considered it constitutional.
The law's challengers, however, claimed it was unconstitutional because the Commerce Clause allows Congress to regulate commerce that occurs, not commerce that doesn't occur. Essentially, the argument goes, Congress can regulate the people who already have health insurance, but it can't require people who don't currently have it (ie, who aren't already part of that interstate commerce) to get it.
The Supreme Court agreed, narrowing the Commerce Clause. But here's the trick: If you don't buy health insurance; you get slapped with a tax. Since the Constitution explicitly gives Congress the power to levy taxes, the Supreme Court considered this aspect of the individual mandate constitutional—thus, it was allowed to stand.
Wait, so this means higher taxes?
Yes. The tax applied to people who don't buy health insurance by 2014 is $285 per family or 1% of income, whichever is greater. In 2016, that goes up to $2,085 per family or 2.5% of income.
This will have a particularly pronounced effect in New Mexico, which has the second-highest number of uninsured residents in the nation at 21 percent. (Texas tops that category with 25 percent uninsured.)
What if I already have health insurance?
In most cases, you'll be able keep your current insurance. One big exception is people with flexible spending accounts, or FSAs.
So uninsured people get taxes, and insured people get the status quo. What's the point?
The ACA also includes a lot of provisions that attempt to improve the country's health care system. Three of the key ones:
- Children can remain on their parents' health care plans until age 26. (This part of the law already went into effect;
- according to CNN
- , 2.5 million young adults aged 19-25 have already taken advantage of it. This court decision
- Beginning in 2014, health insurance companies can no longer deny coverage based on a pre-existing condition. The point of the individual mandate is partly to bring more people into the health-care system. An increased number of healthy people with coverage will give insurance companies the cushion they need to provide coverage to sicker people, the logic goes.
- Small businesses with more than 50 employees will have to provide insurance for their workers. This is a controversial aspect of the law—particularly in New Mexico, which has the lowest percentage of people ensured by their employers of any state,
- according to the Kaiser Family Foundation
- The law also calls for expanding Medicaid to more people, but the Court ruled that
- states can opt out
- of this provision without losing existing Medicaid funding.
Is this a big victory for Obama
Kinda huge. Not only has Obama made the ACA a cornerstone of his presidency; he also borrowed the idea from Republican presidential candidate Mitt Romney, who enacted a similar law in Massachusetts. (Check out this 2006 video in which he calls the individual mandate "essential for bringing health care costs down for everyone.)
What does this mean for New Mexico?
In addition to having a big impact on New Mexico's relatively high number of uninsured residents, the law also contains a provision requiring the federal government to pay 100 percent of the cost of a health insurance exchange, a system designed to connect people seeking health-care plans with health insurance providers. New Mexico has already received more than $34 million to develop its own exchange, and the state's Human Services Dept. this week announced the creation of a 12-member task force to work on it.