Five Little Known Facts About Healthcare Insurance Reform

In regard to healthcare reform legislation, the mere size of the Patient Protection and Affordable Care Act along with any other later amendments and changes, makes it very easy for important details to go unnoticed for a long period of time. One controversial section of the Act concerns healthcare insurance coverage for the uninsured citizens. Here are five of the lesser-known facts about healthcare insurance reform.

1. Exemptions to the Insurance Coverage Purchase Mandate

While many individuals are required to purchase healthcare coverage from the state-licensed insurance “exchanges”, the controversial mandate is not all-inclusive and the exclusions are not limited to those suffering financial hardship. American Indians are exempt, as are those who have lacked insurance for three months or less, individuals currently incarcerated, and certain religious objections (primarily those who do not want any form of healthcare and are therefore no drag on the system). Any individual who qualifies for Medicare or Medicaid is similarly exempt from the need to purchase other insurance, meaning that the purchase mandate does not apply to a significant portion of the population.

2. Insurance Co. Profits are Restricted

Healthcare reform has placed a sharp limit on the profits of insurance companies by requiring them to spend a certain amount of premium dollars on medical claims, ranging from 80%-85% (depending on the size of the group in question). Unused money has a mandated refund, on a pro rated basis, to be made annually. A recurrence of particularly high refunds may lead to federal investigations and crackdowns to determine if insurance companies are intentionally overcharging in an effort to increase profits, while the insurance exchanges are intended to allow competition and encourage companies to keep prices low as part of a bid to attract customers. Opinions are divided on the likelihood of success.

3. Business Requirements

Businesses are not required to purchase insurance as part of the healthcare reform passed by Congress. The large majority of businesses are too small (defined in the legislation as fewer than fifty workers) to be affected by portions of the bill, while larger companies typically meet the coverage goals already. However, as with individuals, larger businesses that do not offer affordable coverage face penalties unless they begin offering health coverage to their workers.

4. Undocumented Immigrants

Under current legislation for reforms to healthcare insurance coverage, undocumented immigrants receive no benefits. In addition to this, they are specifically excluded from the ability to purchase healthcare in the state exchanges that begin operating in 2014. Legal immigrants who have been in the country for five years or less are similarly ineligible to obtain coverage, though the law stipulates that children and pregnant women may receive medical assistance at the option of the states they are in.

5. New Taxes

As part of its method of raising revenue, the Patient Protection and Affordable Care Act places an excise tax of 10% on the use of indoor UV tanning services. This is in line with other taxes that are designed to discourage the use of products (cigarettes, liquor) or services that create additional health problems and an overall drain on the system.

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