business

Health Coverage to Expand in Wake of Supreme Court's Obamacare Ruling

The mandate to provide adequate health insurance will soon include firms with 50 or more full-time employees. The Court’s ruling will also hasten the expansion of Medicaid.

By allowing subsidies for health insurance to continue in all 50 states, the Supreme Court has effectively brought an end to efforts to repeal Obamacare.

SEE ALSO: Health Care -- Still an Investment Opportunity?

The 6-3 ruling also means that millions of Americans will be able to keep their health insurance coverage and avoid massive premium increases that would have occurred if the Court had prevented the federal exchange from offering subsidies.

Further major court challenges are unlikely, and Republicans won’t have the political muscle to kill the health insurance mandate, even if a Republican becomes president in January 2017.

The high court ruled that subsidies are allowed for policies purchased on either state or federal exchanges, rejecting the argument of opponents that the law’s language permitted the payments only in the 16 states (and the District of Columbia) that operate their own exchanges.

A ruling against the federal subsidies would have left the insurance program in disarray and would have resulted in many individuals giving up health insurance. Because younger, healthier people would be among the first to do without insurance, insurance providers would have been stuck dealing with older and sicker customers, and premiums would have jumped an average of 287%.

Instead, enrollment numbers will stabilize, and premium increases will average about 6% on the exchanges.

The biggest challenges will fall on employers. The employer mandate to provide adequate health insurance coverage will expand to include firms with the equivalent of 50 or more full-time employees on Jan. 1, from firms with 100 or more now.

And a 40% excise tax on high-dollar plans will kick in as scheduled in 2018. The looming tax is already causing some companies to make insurance benefits less generous.

The Court’s ruling will also hasten the expansion of Medicaid, which provides health care for people with low incomes. Obamacare allows states to expand Medicaid eligibility to folks with incomes of up to 138% of the federal poverty level, with Uncle Sam picking up all or most of the cost for a limited period of years. So far, 29 states and the District of Columbia have signed on. The rest are likely to join in time, now that Obamacare’s major provisions are here to stay.

Despite the decision, Obamacare will remain an issue in the 2016 presidential election. Some changes are likely if a Republican follows President Obama to the White House, but Senate Democrats will be able to kill attempts to repeal the law.

Changes that could get enough support to pass include repealing or scaling back the excise tax on high-cost policies and changing the definition of full-time work to 40 hours per week from the current 30.

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