Last week on March 26-28, 2012, the U.S. Supreme Court heard arguments on the Patient Protection Affordable Care Act (PPACA), commonly referred to as “Health Care Reform”, to determine if the Act is constitutionally sound. The Supreme Court is expected to render a decision in late June 2012.
The individual mandate for all Americans to purchase insurance is at the heart of the Act. This mandate requires that everyone, who can afford healthcare insurance, purchase a minimally comprehensive policy. The definition of who can afford healthcare insurance is people for whom the cost of the policy will not exceed 8% of their monthly income, and those making more than the poverty line.
The individual mandate is due to go into effect in 2014 and is meant to expand the number of people covered by health insurance. Many have rallied against the mandate as it forces people to pay for health insurance and infringes on the basic freedoms of Americans. The fear is that if the government can require all Americans to purchase health insurance, what will the government require Americans to purchase next?
The Court is considering at least three options for the Act: (i) keep the Act intact; (ii) carve-out provisions to eliminate the individual mandate; or (iii) kill the entire Act. The Court may also offer their own suggestions, should they find the Act unconstitutional.
Based on the arguments presented to the Court, it is difficult to predict how it will decide; however, out of all the provisions of Healthcare Reform, it appears the individual mandate is most at risk of being declared unconstitutional.
Congress could replace the individual mandate with another policy, or could decide that the individual mandate is so inter-twined in the law that without it, other provisions may be unsustainable and the whole Act will need to be overhauled.
In the wake of these historic arguments, we will continue to monitor latest developments and communicate them to our clients via this blog.
For more information about the latest changes to healthcare reform legislation, and its financial implications on your organization, please contact Albert Sica at 732.395.4251 or at [email protected].
