brucekrasting.com / By Bruce Krasting / December 9, 2012
Two-years have passed since the signing of the Affordable Care Act (ACA, Obamacare). At this point, one thing is clear, there was a significant “drafting” mistake in the original legislation. There has been an on-going fight over this. I think it’s coming to a boil. If so, it couldn’t come at worse time for the Administration. Some connecting dots:
-A critical component of ACA was the establishment of Health Insurance Exchanges (HIXs). This was supposed to guarantee the availability of “affordable” insurance. Each state will have a HIX.
-Under ACA, a state could either, 1) establish its own HIX, 2) Do a partial HIX with federal support, or 3) Let D.C. pick up the whole thing.
-ACA provided strong incentives to the states to choose option #1 (90% reimbursement). It was originally assumed that a high percentage of the states would set up their own HIXs.
-To make the cost of insurance “affordable” there were tax-credits available for lower income individuals and families. These tax-credits are an essential ingredient to Obamacare.