Chapter 7 Federal Statutes and Regulations That Impact Healthcare 119 Copyright Goodheart-Willcox Co., Inc. challenged (and is still being challenged at the time of this publication) all the way to the Supreme Court by many states that claimed it was unconstitutional. One of the major reasons the law has been so controversial is its require- ment that everyone purchase health insurance (Figure 7.1). This was a requirement for all indi- viduals who did not have health insurance coverage. If people did not purchase health insurance, they were charged a health insur- ance tax. This requirement of the ACA has been eliminated. On June 28, 2012, the US Supreme Court determined that this requirement was equiv- alent to a tax because the Internal Revenue Service (IRS) was designated as the agency to collect it. Therefore, the Supreme Court found this provision of the law constitutional. ­ However, as part of this same ruling, the Supreme Court found that a provision requiring states to par- ticipate in an expanded Medicaid program exceeded federal authority. This provision, but not the entire law, was determined to be unconstitu- tional. The ACA continues to be implemented and challenged through- out the country. The ACA expanded coverage for low-income Americans by creat- ing an opportunity for states to extend Medicaid eligibility, effective January 1, 2014. The expansion applied to individuals who have incomes up to 138 percent of the federal poverty level. This change allows states to provide Medicaid coverage for low-income adults who do not have children without requiring a waiver. States have the option to receive additional federal funding for this expansion, but participation is not required. Some states have opted out of the expansion.­ The following additional changes have occurred as a result of the ACA: • Extended Coverage for Young Adults. Group health plans and health insurance companies offering group or individual health insurance coverage that provides dependent coverage of children must make coverage available for adult children up to 26 years of age. • Eliminating Pre-Existing Condition Exclusions. Group health plans and health insurance companies may not create exclusions for pre-existing conditions in coverage for children and adults. This means that health plans and insurance companies cannot deny coverage to anyone based on an existing medical problem. • Prohibiting Cancellations (Rescissions). The ACA prohibits insurance companies from cancelling insurance coverage when an individual gets sick. These are known as abusive Rob Marmion/Shutterstock.com Figure 7.1 The Affordable Care Act was passed to ensure that more Americans have health insurance and access to medical care.