On June 28, 2012, the Supreme Court of the United States upheld the Affordable Care Act (ACA). Specifically, the Court ruled that the individual mandate and Medicaid expansion are constitutional, but that Medicaid expansion is voluntary for states. Upholding the ACA is good news for all Americans, and especially seniors, who will continue to receive real benefits that are helping them to stay healthy and save money.
Key Court Decisions Made
- Individual mandate is constitutional. The Supreme Court ruled that the individual mandate is constitutional, and considered a tax, thereby within Congress’ taxing power. This means that, beginning in 2014, individuals who do not have health insurance must purchase it or pay a penalty.
- Medicaid expansion is constitutional, but voluntary. The Supreme Court ruled that the Medicaid expansion provision in ACA is constitutional, but limited. This means that states can choose to opt-out of expanding Medicaid by 2014 and not lose their funding from the federal government for their existing Medicaid program. For states that choose to expand Medicaid eligibility, the federal government will pay 100 percent of the costs for new enrollees during the initial phase beginning in 2014, phasing down to 90 percent in 2020 and beyond.
Benefits for Seniors and their Families Continue
- Prescription drugs discounts. Many seniors will continue to save over $600, on average, a year on their prescription drugs. The ACA closes the Medicare Part D prescription drug coverage gap, known as the “donut hole,” by 2020; issued a $250 rebate the first year; saves a typical senior $4,200 in a decade; and provides a 50% discount on brand-name drugs in 2011 and 2012 (5.3 million Medicare beneficiaries have already saved $3.7 million on prescription drugs).
- Free preventive care. Preventive care will still be covered free of charge for seniors. The ACA eliminates the deductible and co-pays for preventive care, expands preventive services, and provides an annual wellness visit and personalized prevention plan (32.5 million Medicare beneficiaires used free preventive benefits in 2011).
- Waste, fraud, and abuse crackdown. Efforts to strengthen and protect Medicare by cracking down on waste, fraud, and abuse will remain in place ($10.7 billion has already been recovered). To further contain costs, the ACA offers new incentives to coordinate care and to reduce hospital readmissions and infections.
- Coverage for pre-existing conditions. Individuals cannot be denied care or charged more because of a pre-existing condition. Children already receive this benefit, and it will apply to adults in 2014 (129 million Americans have a pre-existing conditions, including 17 million children). This new protection will be invaluable to the over 8.6 million young seniors, age 50-64, who are currently uninsured.
- Young adults (up to 26 years) stay on family insurance. Millions of young adults will be able to stay on their family’s health insurance plan until age 26 (6.6 million young adults have already benefited from this provision, including 3.1 million newly insured).
National Committee Position – The Supreme Court’s decision to uphold the Affordable Care Act is a victory for all Americans, especially seniors, who are already receiving benefits from the law. The National Committee also supports Medicaid expansion and urges states to provide much-needed health care and long-term services and supports by participating in the Medicaid expansion. In addition, the National Committee will work with Congress and the Administration to encourage the states to participate in this effort.