Individual

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. PPACA promised to provide high quality health insurance for all Americans. Whether this goal is being met today – or will be met in the future– remains questionable, especially in light of the upcoming challenges PPACA faces including the U.S. Supreme Court review and the need to fund many of the new programs.

The Department of Health and Human Services (HHS) just released its final Medical Loss Ratio rule, and the outcome does not bode well for the broker/agent community. In the ruling HHS has rejected the NAIC recommendation to exclude broker/agent fees from insurance companies’ allowed administrative costs.

Under the rule beginning this year, individual and small group market insurance plans will be required to spend 80% of the premiums on medical care and health care improvement. Only the remaining 20% will be allowed towards administrative costs. Much the same, large group plans will have an 85% of premium requirement.

A recent ruling by the U.S. Court of Appeals for the Eleventh Circuit has declared the ‘individual mandate’ to purchase health insurance unconstitutional, which is a core element of the Patient Protection and Affordable Health Care Act (PPACA). Two out of three judges found the mandate that forces individuals to purchase health insurance represents an unprecedented and unconstitutional expansion of the power of Congress to regulate interstate commerce.

On June 29, a three judge panel of the Sixth Circuit U.S. Court of Appeals located in Cincinnati, Ohio published an opinion on the case entitled, Thomas More Law Center et. al. vs. Barrack Hussein Obama et. al. [1]     

On a vote of 2 to 1, the Appeals Court upheld the constitutionality of the “individual mandate” embedded in the Patient Protection and Affordable Care Act (PPACA) that requires all individuals to purchase health insurance by the year 2014 or pay a penalty. In addition, the appellate decision sent minor shock waves through many conservative camps since this is the first time a republican appointed judge sided with the Obama administration.