Full Steam Ahead…

The individual mandate has been the crux of the healthcare overhaul, the Affordable Care Act, also known as Obamacare.  The idea is that if healthy people who underutilize their health insurance are required to have insurance, less healthy individuals will be better able to afford health insurance.  Over time, the healthy individuals would reap the benefits of paying premiums throughout their lives.  Government subsidies and other programs would help ensure that everyone was covered under some sort of healthcare plan.  Hopefully, according to the program, many people who do not quite qualify for Medicare and Medi-Cal under the current program could still obtain affordable coverage.

California has been at the forefront of implementing the law and has been putting in place a health insurance market as required by the law, even in the face of Supreme Court scrutiny.  As many of us have been awaiting an opinion by the Supreme Court on the individual mandate and whether it would “kill the bill,” the state has been moving forward as if the law were fully enacted.  In fact, California was the first to begin implementing the new federal program.

As we continue to await the Supreme Court’s decision on whether various provisions of Obamacare will be fully or partially enacted, or not enacted at all, the questions about how these new policies will affect Medi-Cal remain.  In a time where California has its own court battle toward reducing Medi-Cal funding, why take on this huge task of creating healthcare insurance exchanges that may be struck down by the court?  For its part, the state maintains that it may consider its own legislation to broaden the reach of Medi-Cal on its own and incorporate the healthcare exchanges in it.  That said, California is heavily dependent on federal subsidies to make its healthcare exchanges work.

We should hear a decision from the Supreme Court within the next month.  However, according to the New York Times and gamblers who are willing to bet on the outcome of such things, it appears likely that the individual mandate will be struck down.  When the Supreme Court makes these types of decisions, they do not simply question what is in front of them, i.e. what should happen with the healthcare law. Instead, they question the “precedent” they are setting; in this case, they may be wondering what else the government might require you to buy from private companies and whether the insurance market should be treated differently.

Regardless of what happens with the healthcare overhaul, the questions for Medi-Cal expansion will continue to exist.  With the ongoing changes in healthcare law, we hope the expansion will allow more people to qualify for Medi-Cal more easily.  However, for now it is still best to ensure that you will qualify for Medi-Cal as it stands today if you believe you will need it soon by setting up a QMap Trust for example.  If you are young and relatively healthy, it may be better to wait until the healthcare decisions has passed to determine whether any Medi-Cal planning will be necessary, provided of course that the rest of your estate plan is already in order!

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