Federal Health Reform

In the next several postings, I will discuss the structure and elements of Federal health insurance reform. The full paper will be posted to www.InsuranceProfessor.net.

What is it?
The purpose of this paper is to provide a framework to help readers begin to understand the federal health reform laws that will begin to take full effect in 2014. The reader should note that a significant amount of detail is still being crafted with regards to this law, so some of the information contained herein my be rendered moot or changed at virtually any time. Even making that statement, the basic structure of the reform will stay generally intact, and therefore in this paper we outline what is known and take some care to indicate where more information is forthcoming.

Further, while the intent of this paper is not to offer political opinions, it may be impossible for such tendrils of opinion to seep out of these paragraphs. From time to time an editor’s note is added to assist understanding.



The Patient Protection and Affordability Care Act, and the accompanying Public Health Act, was passed into law on March 23, 2010. This is a key date to remember, since many of the features of the law are taken from this date (i.e.: 6 months following the enactment was 9/23/2010)

PPACA (pronounced “pack-ah” to help the reader; other usages are ACA; P-PACA; or Obamacare) represents a significant element in the ideology of President Barack Obama and his supporters. It is important to understand a bit about the history of this legislation, and how it is being implemented.

In the year following the first inauguration of Barack Obama, legislation was introduced in Congress to reform the American health care delivery system. The reader may recall that both houses of Congress and the White House were controlled by Democrats in 2009-2011, but even so, the confrontation to enact the reform legislation took the better part of a year-and-a-half and took every vote the Democrats had to pass the Senate.

One of the original versions of reform was a single payer system (originated in the House), similar to Medicare. However, it became clear that this proposal would not gain even 100% Democratic support, and it was replaced by the legislation that became PPACA. In the end, PPACA became law without a single vote from Republican lawmakers.

This paper will not go further into the details of this law’s adoption history, but rather it will discuss how this law is being implemented. That said, a key element in understanding this discussion is that in June 2012, the Supreme Court, in a divided vote, decided that while the individual mandate of the law (requiring that every person in the country have health care coverage) was strictly unconstitutional, the Congress was within its powers to assess a penalty against individuals for not having coverage. In this decision, the penalty was judged to be a tax, and therefore constitutional.

The rest of this paper is devoted to two broad discussions:: When and What Will Happen, and How Things Will Work. As an addendum, a list of taxes required by PPACA will be listed. The date of this first edition is February 2013. Updates to this information as new regulations are released, will be posted on this blog.

Footnote**the original law comprised nearly 3000 pages. The regulations that will implement the law will very likely, in the short term, require nearly 100,000 or more  pages. Therefore, while this paper is relatively short, there is a lot of detail that can be found in the publications/regulations of various government agencies, principally the Department of Health and Human Services (HHS), within which the Centers for Medicare and Medicaid Services (CMS) plays a key role; the Department of Labor (DOL); the Department of the Treasury, within which is the Internal Revenue Service (IRS).

Within this paper, the reader may see the following annotations:: TBD – To Be Determined; or MTC – More To Come.

Tomorrow — Part one of the structure of PPACA.