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Who the Health Ruling Impacts Most

The Supreme Court’s decision to uphold the key provisions of President Obama’s Affordable Care Act will benefit two groups the most, experts say: older Americans and the self-employed.

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The court found the individual mandate, the requirement that all Americans purchase health insurance, is constitutional. Signed into law two years ago, the sweeping reform is expected to give 30 million more Americans access to health insurance by 2014, making preventative care available to many who in the past avoided seeking treatment until absolutely necessary. It also requires insurers to give people free access to blood pressure, cancer, diabetes and cholesterol tests. “This is the biggest change in health care in this country in a generation,” says Susan Nash, a partner in the law firm McDermott, Will & Emery.

That said, the law will impact certain groups more than others. Younger and healthier Americans who have had cheaper premiums and higher deductibles will be forced to pay more, while the expansion of Medicaid will benefit poorer and sicker Americans who couldn’t afford health care until now, says Wendell Potter, former vice-president of corporate communications at Cigna. Of course, even experts say it’s unclear how quickly some of these changes will take hold; for example, some question whether all states will be able to roll out online “exchanges” designed to allow people to shop for individual insurance plan by 2014.

Some things may not change much at all. With or without Obamacare, most analysts say that health insurance premiums will continue to rise. “Consolidation within the industry means that people will have less choice,” says Alex Morozov, a senior health care analyst at Morningstar. In fact, the two largest insurance companies have a 70% market share in nearly half the 50 states, according to the American Medical Association. In 54% of metropolitan markets, at least one insurer had a market share of 50% or more, the report found.

Here are some  of the likely consequences of the court’s decision for five key groups – and what might have happened had the decision gone the other way:

Those with pre-existing conditions

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Insurers will no longer be allowed to deny coverage to people with pre-existing conditions. The policy already went into effect for people under 19 and will apply to all age groups after 2014, Nash says. Some 12.6 million non-elderly adults were deemed ineligible for coverage because of a pre-existing condition, charged a higher premium or refused to cover their condition, according to a government report.

What was at stake: “These people would have been most at risk of not being able to obtain or afford health care,” says Lisa Zamosky, a healthcare consultant and former health insurance executive. Studies show that pre-existing conditions present a growing problem for Americans: 50 to 129 million have some type of pre-existing health condition and one-in-five are uninsured, according to a 2011 by the Department of Health and Human Services.

Young adults under 26

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Under a provision of the law that already went into effect, people under age 26 can now be covered under their parents’ insurance. Some 6.6 million young adults were added to their parents’ plans after the law was signed in 2010, according to a recent survey by the Commonwealth Fund, a private U.S. foundation. “It’s really one of the most popular provisions,” Nash says, “and makes it worthwhile for parents to be part of a good employer-based insurance plan.”

What was at stake: Three major insurers – Humana, Aetna and UnitedHealth –said they would have kept the provision regardless of how the court ruled. But not all insurers were ready to commit. For one, Joe Mundy, a spokesman for Cigna, one of the largest health insurance companies in the U.S., said no decision had been made. And even if insurers had kept the provision, Potter says the employer (not the insurer) would have had the final say.

Those who buy their own insurance

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The new law will requires states to provide online “exchanges” with the aim of making it easier for people to find and afford individual plans that suit their needs. This, plus the new pre-existing condition mandate, will help self-employed and unemployed people get more affordable and complete coverage, Nash says. Currently, 60% or 16 million adults found it “very difficult or impossible” to find an individual plan they could afford, according to a 2011 Commonwealth Fund report. Nearly three-in-five adults – or 43 million people – are uninsured.

What was at stake: In most U.S. states, those applying for individual plans are often given more rigorous medical examinations and given premiums rated on health, gender and age, Potter says. The self-employed would have remained the most uninsured, he says. Jessica Waltman, a spokeswoman for the National Association of Health Underwriters, says employers often subsidize their employee benefits, and – since group insurance policies carry less risk – they’re often less expensive.

People who get insurance through work

The impact will be minimal for this group, with one exception: The law halves the cap on “flexible spending accounts” – which allow employees to use pre-tax income to pay for health expenses – to $2,500, and limits them to prescription medicines. Before the law, most companies allowed employees to put $3,000 to $5,000 into these accounts from their gross salary to pay for expenses.

What was at stake: Employer-based plans would have continued to withhold several key benefits, experts say. For example, they would maintain “lifetime limits” where coverage stops for emergencies and chronic conditions after a certain threshold (usually around $1 million), Nash says. Companies would also continue to impose annual limits on certain out-of-network services that may be covered in some insurance plans – such as infertility treatments and chiropody, and Lasik eye surgery.

Baby boomers

Those boomers under the age of 65 will see greater benefits now that the law has been upheld, says David Certner, legislative policy director for AARP. Obamacare puts limits on how much insurers can charge people because of their age and provides subsidies for those with low incomes. The law also closes the so-called “doughnut hole” — the gap in coverage where Medicare beneficiaries must pay $4,000 out of pocket for prescription drugs if they exceed a threshold of $2,700.

What was at stake: Most of those over the age of 65 and on Medicare would have seen little difference to their policies, experts say. But pre-retirees had the most to lose, Certner says. They faced higher premiums and potentially more exclusions for pre-existing conditions, he says. In fact, some 30% of 50- to 64-year-olds spend one-tenth of their family income on health care versus just 18% of 19- to 49-year olds, according to ARRP.

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