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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 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, two reforms already working successfully here in Massachusetts.
While much of the national health care reforms were modeled after reforms already adopted in Massachusetts, we still benefit from from some of the national reforms. In this issue brief, we highlight the number of people the ACA has helped so far and the costs already saved to illustrate what’s at stake for Massachusetts 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; two years longer than the previous requirement of 24 years. In other parts of the country, many insurers would drop young people when they reached their 18th birthday or graduated, even if their families had paid into the system month after month.
• According to June 2012 estimates, more than 3 million young adults, including 21,000 in Massachusetts, have gained health insurance through their parents’ plan. Without this provision, they would either go uninsured or have to seek more expensive coverage on their own.
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.
• Between 2009 and 2011, 1,777,000 people benefitted from this guarantee of higher-value coverage in Massachusetts.
Further, if insurers fail to meet the 80% target, they must rebate that money to their customers.
• An analysis by the National Association of Insurance Commissioners shows that had the ACA been in effect in 2010, consumers nationally would have received over $1.9 billion in rebates.
If the ACA is repealed, insurers will not have to meet these minimum standards and instead of issuing rebates to consumers, the insurance companies will keep those billions.
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.
• Thanks to health care reform, last year private insurers covering over 1,324,000 people in Massachusetts added coverage of high-value preventive services without deductibles or copays.
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.
•Because the Affordable Care Act ends this practice, 2,525,000 people in Massachusetts whose pre-ACA health insurance had lifetime limits no longer have to worry that if they have extraordinarily high medical expenses, their insurance company will refuse to pay for their care. (Massachusetts previously permitted lifetime limits only on non-core benefits”)
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.
• The ACA is projected to reduce the federal deficit by $128 billion over the next ten years and by 0.5% of GDP in the decade after that.
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. Last year Massachusetts made some steps forward in allowing businesses to establish group purchasing pools. After 2014, the ACA will also allow small businesses to pool their bargaining power in the health care marketplace. In the short term, to help small businesses afford coverage, the ACA creates health care tax credits for businesses with fewer than 25 workers.
• A study performed by Families USA and Small Business Majority found that over 81,000 small businesses in Massachusetts were eligible to receive a tax credit to provide health insurance for their employees in 2010 which accounts for over 74% of all small businesses in the state.
Repealing the ACA would do away with this tax credit and buying pools making it more difficult for those small businesses to provide health insurance to their employees.
Health care consumers, including consumers in Massachusetts 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 stay in place. In addition, Massachusetts legislative leaders are currently considering a host of health care reforms specifically aimed at reducing the skyrocketing health costs and improving the quality of care for everyone. Hopefully, many of those reforms will be adopted this year.
 “New health care law helps more than 3 million young adults get and keep health coverage,” U.S. Department of Health and Human Services, June 2012, at http://www.hhs.gov/news/press/2012pres/06/20120619b.html
 “Health Reform: Results in Your State,” March 5, 2012, at http://www.whitehouse.gov/sites/default/files/methodology_for_sbs_spreadsheet_3-4-12_clean.pdf.
 “Consumer Health Insurance Savings under the Medical Loss Ratio Law,” U.S. Senate Committee on Commerce, Science, and Transportation, May 24, 2011, at http://commerce.senate.gov/public/?a=Files.Serve&File_id=98f51e42-e9ef-441a-a5e3-6bdac44d6a27.
 “Fifty-Four Million Additional Americans Are Receiving Preventive Services Coverage Without Cost-Sharing Under the Affordable Care Act,” U.S. Department of Health and Human Services, February 2012, at http://aspe.hhs.gov/health/reports/2012/PreventiveServices/ib.shtml; Cohen, J., Neumann, P., Weinstein, M., “Does Preventive Care Save Money?” NEnglJMed 2008: 358:661-663; Feb. 14, 2008.
 “ASPE Issue Brief,” U.S. Department of Health and Human Services, March 5, 2012, at http://aspe.hhs.gov/health/reports/2012/LifetimeLimits/ib.pdf.
 Testimony of Congressional Budget Office Director Douglas Elmendorf before the U.S. House of Representatives Subcommittee on Health, Committee on Energy and Commerce, March 20, 2011; letter from Elmendorf to Sen. John Thune October 31, 2011.
 “The Economic Impact of Healthcare Reform on Small Business,” Small Business Majority, June 11,
 “A Helping Hand for Small Businesses,” Families USA, July 2010, at http://www.smallbusinessmajority.org/_pdf/tax_credit/Helping_Small_Businesses.pdf.
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