Melissa Cubria
TexPIRG
The outcome of the U.S. Supreme Court’s ruling on the Affordable Care Act (ACA) will have far reaching impacts on consumers. The law is already working to improve the quality of care and reduce costs, with millions of Americans experiencing concrete improvements in their coverage. Further improvements are slated to go into effect in 2014 – including a long-awaited ban on insurance companies denying coverage to people with pre-existing conditions, and the opening of competitive state health insurance marketplaces called “exchanges” aimed at giving consumers better choices for coverage.
In this issue brief, we highlight the number of people the law has helped so far and the costs already saved to illustrate what’s at stake for Texas consumers in the pending Supreme Court case.
New Coverage Options for Young Adults
The ACA allows young people to stay on their parents’ coverage until they turn 26; previously, many insurers would drop young people when they reached a birthday or graduated, even if their families had paid into the system month after month.
Guarantees that Premiums go to Care
Health insurers must spend at least 80% of the premiums they collect on providing health care services, rather than on administrative costs and profits.
Further, if insurers fail to meet the 80% target, they must rebate that money to their customers.
If the ACA is repealed, insurers will not have to meet these minimum standards and instead of issuing rebates to consumers, the insurance companies will keep those billions.
Preventive Care
Preventable causes of death, including tobacco smoking, diseases against which vaccines exist, cancers which are treatable if caught early, are responsible for 900,000 deaths annually — nearly 40% of total yearly mortality in the U.S. Preventive measures such as counseling adults to quit smoking, screening for colorectal cancer, and providing influenza vaccination reduce mortality either at low cost or at a cost savings. Without the ACA, many consumers could forgo such treatments due to their cost.
Ending Lifetime Limits on Benefits
In the past, insurers put lifetime limits on the coverage they provided, meaning that consumers who got very sick could find themselves on the hook for unlimited financial liability, despite having faithfully paid their premiums every month.
Eliminating Retroactive Cancellation of Coverage
The ACA prohibits a health insurance company from retroactively cancelling a sick person’s coverage due to an unintentional mistake in their paperwork.
Reducing the Deficit
The Affordable Care Act contains numerous provisions that will help to bend the rising health care cost curve and root out waste and inefficiency. Repealing the ACA would allow healthcare costs to escalate at rates we cannot afford.
Assistance for Small Businesses
Small businesses currently face an inhospitable health care marketplace, where they pay 18% more than large businesses for the same coverage because they lack negotiating power and economies of scale. After 2014, the ACA will allow small businesses to pool their bargaining power in new health care marketplaces called exchanges, lowering their rates. In the short term, to help small businesses afford coverage, the ACA creates health care tax credits for businesses with fewer than 25 workers.
Repealing the ACA would do away with this tax credit and the exchanges, making it more difficult if not impossible for those small businesses to provide health insurance to their employees.
Health care consumers have already seen real, quantifiable improvements in their coverage since the ACA was enacted into law in 2010. It is in consumers’ interests for these advancements to hold, and for the law’s next improvements – such as the competitive health insurance marketplaces, and the ban on pre-existing condition denials – to take effect.