The Patient Protection and Affordable Care Act was signed into law March 23, 2010, by President Obama. It is an extensive piece of legislation that will greatly alter the economics of healthcare. The law impacts the four major industry constituents – providers of healthcare, providers of healthcare insurance, employers offering healthcare benefits and users of healthcare.
In March 2012, the Congressional Budget Office and the Joint Commission on Taxation estimated that the insurance coverage provision will have a net cost of about $1.1 trillion for the 2012 – 2021 period. Excluding unauthorized immigrants, the insured share of the nonelderly population is projected to increase from 82% in 2012 to 93% in 2021.
Specifically for businesses, by 2014 – “Employers with more than 200 employees must automatically enroll new full-time employees in coverage. Any employer with more than 50 full-time employees that does not offer coverage and has at least one full-time employee receiving the premium assistance tax credit will make a payment of $750 per full-time employee.” (Summary Link – http://dpc.senate.gov/healthreformbill/healthbill04.pdf )
But, the future of this legislation is in question, in its current form. Lawsuits have been brought by 27 states, questioning the constitutionality of some of the provisions of the law. The Supreme Court of the United States heard three days of oral arguments at the end of May and is now deliberating. A late June decision is expected.
At the heart of the issue are two elements, i.e. the “individual mandate” provision which requires all citizens to maintain health insurance by 2014 or be assessed a penalty on their tax returns; and the expansion of Medicaid which impacts states, that help fund the program.
So what is the likelihood that the Supreme Court declares aspects of the law unconstitutional? It is hard to predict. But if you are wondering how many times the Supreme Court has overturned Congress in the past, according to the General Printing Office database, the Supreme Court has declared acts of Congress unconstitutional 158 times in the past 213 years, from 1789 to 2002.
Please look for an update to this post within the next 30 days.© Copyright 2012 Regis Quirin, All rights Reserved. Written For: CFO Tips - What you need to know, to be a CFO TODAY!