Landmark health care bill takes first steps

Ultimately, the legislation will touch nearly every American. But its many provisions, to be rolled out gradually over the next several years, will affect people differently. Factors include age, health, employment status, family situation and income.

Some key components of the bill will begin immediately or within the next six months, including new rules allowing young adults to remain on their parents’ plans longer and barring insurance companies from denying coverage to children based on pre-existing conditions.

Others, like increased fees on drug makers and the new requirement for all Americans to have health insurance, will ramp up over the next eight years.

“This is baby taking its first steps,” said Dr. Dev GnanaDev, past president of the California Medical Association. “We’ve got decades to go before we can say that we have health care reform.”

GnanaDev, who also is medical director at Arrowhead Regional Medical Center in Colton, said he expects lawmakers will tweak the legislation as program rollouts reveal flaws.

health care

Kurt Miller / The Press-Enterprise
Justin Tracy, owner of PIP Printing and Marketing Service in Riverside, pays 99 percent of his workers’ health and dental costs. He’s hoping the new legislation will prompt more companies to provide coverage and make competition for jobs more even as companies’ costs balance.
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“The biggest winners are those who cannot get insurance because of pre-existing conditions,” he said. “The losers will be the people who pay more in taxes.”

Other bill downsides include the requirement for everyone to be covered or risk paying 2.5 percent of their annual income, fines for large employers who provide skimpy or no coverage, and a strain that’s expected to target primary care doctors hit with millions of patients who had been uninsured.

As currently enacted, the legislation, expected to cost about $940 billion, would provide coverage to an estimated 32 million uninsured Americans — including more than half a million in Inland Southern California.

Some in the Inland area will reap the benefits almost immediately, while others are still assessing how it will improve or hurt their health care coverage.

No quick fix

For Karen Kirtland, a Riverside woman who operates a small biological consulting business, two factors combined to constrain her ability to get insurance under the previous health care system.

First, she had health issues — asthma, high blood pressure and allergies — which counted as pre-existing conditions. Second, while she has no employees for whom to provide a health care plan, she was forced to purchase her own plan on the individual market. The medical conditions and her inability to join a group plan like those offered by most employers left her with few options — and none of them were cheap.

“If you are not a member of a group, there is no regulation of price, cost, services or anything,” Kirtland said. “They can charge what they want.”

Left wondering whether she would have to choose between paying her $1,300 home mortgage or having health insurance — then at a monthly cost of $1,100, Kirtland wrote a letter to President Barack Obama asking for help.

“It’s exactly for families like yours that I’m fighting so hard for health reform,” Obama responded in a personal note about a month later.

Based on the correspondence, Kirtland was invited to Washington and was on hand last month to participate in events surrounding Obama’s signing of the historic bill in Washington.

While the ban on denying coverage because of pre-existing conditions becomes law this year, the provision creating an “exchange” marketplace providing group plan options for individuals like Kirtland won’t take effect until 2014.

Still, Kirtland said she is confident the law will improve her coverage options.

“It will enable me more choice, better choice and possible cost reduction,” she said. “But if I don’t find anything I like, I can stay with my current plan.”

OVER THE LIMITS

Dr. Carl Rowe, owner of Integrated Care Communities in Moreno Valley, said he’s lucky his company’s health coverage can take care of his 5-year-old son, who has a significant case of asthma. Otherwise, it could be difficult to find affordable coverage for his son, if it were available at all.

“It’s an issue for a lot of people, especially those with diabetes and cancer,” Rowe said. “Those are expensive illnesses to treat.”

Currently, state health programs, such as Medi-Cal and Healthy Families, provide health, dental and vision coverage to children whose families don’t have insurance for them and can’t afford it. Uninsured children qualify for Healthy Families if their parents earn as much as 250 percent of the federal poverty level — about $55,000 annually for a family of four.

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Families such as Rowe’s — that earn more and don’t qualify for assistance, and aren’t covered by an employer’s plan — have to look for coverage in the private insurance market. Or they go without coverage and seek treatment in hospital emergency departments, which are mandated by federal law to care for patients regardless of ability to pay.

Medical experts have estimated that emergency department treatment costs about 20 times more than what a doctor’s office visit would cost. Taxpayers end up footing the bill for patients who can’t afford to pay, which some people describe as government-run health care.

“Access to health care is critical,” Rowe said. “You have to cover these people. What the legislation has done is shifted some of the biggest risk to private insurance. They’ll find a way to make it profitable.”

America’s Health Insurance Plans, a national professional association representing nearly 1,300 companies which serve more than 200 million people, has said the new legislation could work to insure all Americans if it’s paired with cost control efforts.

“Ultimately, the success of health care reform will depend on whether or not soaring costs are brought under control and coverage becomes more affordable for working families and small businesses,” said association president and CEO Karen Ignagni in a written statement.

MEDICARE GAP

Alice Emerson is a retired nurse and Medicare beneficiary who, along with many other people, isn’t yet sure whether new health care legislation will help her with premium increases and prescription costs.

“It’s hard to tell until we get into it,” said Emerson, who regularly attends exercise classes at Janet Goeske Center, a Riverside senior center. She wouldn’t reveal her age but said she had been on Medicare for a few years.

Emerson, who suffers from liver disease, pays more than $400 a month for her supplemental Medicare plan, which covers costs that Medicare won’t pay. She takes 16 medicines to manage her health, which total about $300 in monthly copayments, Emerson said. She enrolled in a mail-order prescription plan to save money.

She said she and her husband, a retired UPS manager, worked hard to make a good retirement for themselves. She didn’t anticipate that she would become ill with a chronic disease. Doctors diagnosed her liver disease about eight years ago while she was treated for another condition, Emerson said.

“I don’t want to pay for medicine all my life,” she said. “I have to do everything I can to stay well.”

Most beneficiaries are concerned about what will happen to Medicare as a result of health care legislation, said Ann Kasper, a coordinator at the Health Insurance Counseling and Advocacy Program. The program is part of the California Department of Aging.

“They’re afraid it’s going to take away coverage,” Kasper said. “They’re afraid their basic coverage will be gone.”

According to the National Council on Aging, the legislation will improve basic Medicare benefits, not cut them. Beneficiaries will get free annual wellness doctor visits, which currently are not covered. But free fitness classes covered under some plans could disappear.

The most immediate change will affect beneficiaries who fall into what is known as the Medicare Part D doughnut hole. That happens when Medicare stops paying prescription costs after beneficiaries reach $2,700. Then beneficiaries have to pay 100 percent of their costs until they reach $6,154. Medicare coverage kicks back in at that point. Those beneficiaries will get a $250 rebate at the end this year.

However, few beneficiaries who get in the doughnut hole emerge from it, Kasper said. They usually stop taking their medicine because they can’t afford them, she said. Besides, $250 would hardly cover the cost of medicines — typically brand-named cancer and heart drugs — that would quickly push someone into the hole, Kasper said.

“That group is not the largest percentage of beneficiaries,” she said.

Most beneficiaries take cheaper generic drugs and rarely reach the doughnut hole, Kasper said.

KIDS COVERED

Jan Serrano, Arrowhead Regional’s trauma program coordinator, thinks extended age limits for adult children to remain on their parents’ health plans is among the best provisions in the new health care legislation. The law covers children to age 26.

“It can take you a lot longer to graduate from college these days,” Serrano said. “If the cutoff is 22 or 23 years old, they’re not going to be getting out of school and finding a job. Or they may graduate and not find a job for a while, especially in this economy.”

Up until now, such circumstances probably have forced young people with medical conditions to stay in school to remain covered on their parents’ insurance plans rather than risk leaving school, being unemployed and going without treatment, Serrano said.

“That’s a huge worry to me,” she said, adding that her 12-year-old son has a medical problem that could make it more difficult for him to find health coverage later.

Serrano knows how difficult it is for California students, especially nursing students, to get degrees in four years. State budget cuts have forced California colleges and universities to reduce the number of classes they offer, limiting the number of students who can get the classes they need as quickly as they need them.

“A lot of students stay in school and can’t get out,” said Serrano, whose 18-year-old daughter probably will leave California in the fall to attend nursing school elsewhere. “I didn’t want her caught up in that.”

She said she’s hopeful her daughter, who is considering four-year nursing programs in Indiana and Seattle, will finish school on time and find work. If not, at least the new legislation will provide Serrano’s family a bit of relief in case they need it.

“We have no idea what’s going to happen,” Serrano said. “This is more of a positive.”

EMPLOYEE COVERAGE

For almost 42 years, Justin Tracy’s family has embraced the philosophy that employees should be paid enough on which they can live. Tracy, owner of PIP Printing and Marketing Service in Riverside, pays 99 percent of his 14 employees’ health and dental costs to give them more money to take home.

“It’s the best we can do,” said Tracy, whose average employee tenure is about 10 years. “My family has always felt that you have to take care of your employees.”

Currently, he pays about $4,650 a month for health insurance. The price typically increases 20 percent annually, no matter how sick anyone in the plan becomes, Tracy said.

Under the new health care legislation, he believes he would have to pay $750 per employee per year in fines if he dropped coverage rather than spend more money to cover his employees. Tracy said he intends to continue paying for his employees’ coverage because he fears plans from which his employees would have to choose would not be of the same quality.

“We really don’t know what’s going to happen,” Tracy said, adding that he hasn’t seen anything from the federal government about the legislation and how it would affect him. “We have to make it work.”

Many people fear employers who currently pay for employee health coverage will stop if fines they are assessed are less expensive. Those employees could then be forced to buy less desirable coverage than what their employer provided.

This year, Tracy could qualify for tax credits because his business pays for more than 50 percent of his employees’ premium costs, according to the law. Businesses with 25 or fewer full-time employees and average annual wages of a maximum $50,000 will be eligible for tax credits up to 35 percent of premium costs, the law states.

Tracy said he’s hopeful the legislation will work in his favor and force competitors who don’t provide employee health benefits to pay into the system and cover the uninsured. Competition for jobs would become more level because everyone’s business costs would be more balanced, Tracy said.

“That’s our theory of what’s supposed to happen,” he said. “We would do better because they would make everybody pay something.”

Reach Lora Hines at 951-368-9444 or lhines@PE.com

Reach Ben Goad at 202-661-8422 or bgoad@PE.com

 11:40 PM PDT on Saturday, April 10, 2010 By LORA HINES and BEN GOAD
The Press-Enterprise