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Health Care Reform:

Health Insurance & Affordable Care Act

How Supreme Court Rulings Could Impact Health Care

With All or Part of the Health Care Law Up in the Air, Experts Debate the Future of Health Care

What’s lost in this scenario? continued...

But proponents of the law argue there will be other incentives left in the health reform law to still entice people to buy insurance.

For instance, what these states didn’t put into effect -- that federal health reform will starting in 2014 -- is financial assistance to help people buy coverage. Federal subsidies will be available to a family of four with an income up to $92,200 annually to buy insurance through the exchanges. “When you have that financial assistance you’re not just bringing in the sick, you’re also bringing in the healthy, and so what that does is help moderate the dramatic effects we saw in New Jersey and New York,” Blumberg says.

If the mandate is overturned, there are also other ways to encourage  people to buy insurance that are being considered. One idea is to only allow people to buy insurance during a limited open-enrollment period. There would be late-enrollment penalties for anyone who delays. The thinking here is that people will realize they need to buy insurance when it's available, because it won't be as easy -- or as inexpensive -- to wait and buy insurance only when they get sick or injured.

“The individual mandate is a replaceable provision,” Wright says. “The question is whether there is the political will to do so.”

If the individual mandate goes away, could the requirement that insurers cover everyone go, too?

Yes, the Supreme Court could knock down insurance market reforms along with the mandate, Wright says. That would mean insurance companies could continue to reject applicants who have pre-existing health conditions, as they do now.

However, if the Medicaid expansion and the subsidies are left in place, that would help to make insurance more affordable, and many people now without would likely gain coverage. This would be a boon for insurance companies because they’d be gaining lots of new, healthy customers.

But those with health conditions that don't qualify for Medicaid or a subsidy would likely face very expensive insurance premiums or no insurance options at all because of the lack of a requirement to accept people with pre-existing conditions.

What if the court decides the law’s plan to expand Medicaid is unconstitutional?

Under the law, 16 million low-income individuals are expected to gain insurance coverage under Medicaid. The law expands the program’s eligibility requirements to allow people making up to 133% of the poverty level (about $14,000 for an individual or $29,000 for a family of four) to gain coverage. 

The Supreme Court must decide whether the Medicaid expansion is unduly “coercive” to states, which are required under the law to cover more citizens under their Medicaid programs or risk losing all of their Medicaid funding from the federal government. If the court determines this part of the law is unconstitutional, it would have a significant impact, Blumberg says. “The expansion of the Medicaid program is expected to create a very substantial dent in the number of uninsured. Don’t forget that the vast majority of the uninsured in this country are below 200% of poverty,” she says.

In this scenario, 16 million people expected to gain coverage under the law by 2019 will remain uninsured.

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