published Monday, April 5th, 2010

Predictions about health reform a moving target


by Emily Bregel
Audio clip

Rae Bond

In Hamilton County, where median household income is $46,505, 46 percent of the population could qualify for government assistance in paying for health insurance premiums under health reform, according to estimates based on the most recent U.S. census data.

Meanwhile in Walker County, Ga., the figure is closer to 55 percent of the population who could get subsidies or credits to buy insurance. There, the median household income is $39,123.

Local health providers and consumers still are trying to get a handle on the real-life effects of health care reform and how incentives included in the reform package will play out among business owners and individuals weighing whether and how to buy health coverage.

Projections based on the thresholds for federal subsidies or the expansion of government programs such as Medicaid can provide some indicator of what the insurance landscape will look like in 2014, such as who will decide to buy coverage with the help of subsidies and who will opt to forgo coverage and pay an annual penalty.

But many contemplating the changes in the local business and health care industry are resigned to taking a wait-and-see approach.

"We're all trying to figure out which way are these incentives going to send us. Are there unintended consequences here?" said Jerry Burgess, CEO of HealthCare 21 Business Coalition, a nonprofit member organization comprising employer groups and focusing on improving the quality and cost of health care.

"I'm sure there's probably some adverse incentives the government didn't mean to put in place, but we have between now and 2014 to find a lot of those. I don't think any of us should panic at the moment," he said.

CURRENT MEDICAID ENROLLMENT

Hamilton County: 53,999 as of December

Bradley County: 17,756 as of December

Catoosa County: 8,440 as of October

Walker County: 11,578 as of October

Source: TennCare, Georgia Department of Community Health

MEDIAN HOUSEHOLD INCOME

Hamilton County: $46,505

Bradley County: $40,325

Catoosa County: $47,699

Walker County: $39,123

Source: U.S. Census Bureau

The new health care reformlaw, signed by President Barack Obama last month, allows individuals and small businesses to pool together to buy insurance at better rates through state-run insurance exchanges, which will face federal guidelines on coverage levels and premium rates.

Individuals and businesses with more than 50 employees will be required to buy insurance or pay a $2,000-per-employee penalty by 2014.

Starting right away, small businesses with fewer than 25 employees will get tax credits to purchase insurance that can equal up to 35 percent of the cost of insuring their workers, according to the Kaiser Family Foundation, a nonprofit that focuses on health care policy.

But some fear that larger businesses that already offer health coverage could decide to drop their health plans and send their workers to buy coverage on their own with the help of government subsidies. Some critics of the reform plan say that shifts the burden of paying for coverage to taxpayers, and from lower-wage workers to higher-wage workers.

"If you work at McDonald's and make $8 an hour, you'll be OK because you'll have almost a full subsidy" to buy insurance, said Dr. Vince Viscomi, a local pulmonologist and past president of the Chattanooga and Hamilton County Medical Society. "But if you (are paid) more, you are penalized for it by having a smaller subsidy. And that hurts."

The reform plan provides federal subsidies for those earning 133 percent to 400 percent of the federal poverty level, meaning an estimated 150,852 people in Hamilton County -- or almost half the population of the county -- would be eligible for some level of government help in paying for their health care, according to estimates based on census data.

For a family of four, 133 percent of the federal poverty level is $29,326 while 400 percent is $88,200.

The federal subsidies will be awarded to individuals on a sliding scale based on income, meaning those in higher income brackets would get less help in complying with the mandate to purchase insurance by 2014.

"We're afraid they're just going to change the demographics of the people who can't get insurance from the working poor to working middle-class," Dr. Viscomi said. "The people that won't have insurance, instead of being the people that make $25,000, will be the people that make $75,000, because they don't get much of a supplement (subsidy)."

Mr. Burgess at the HealthCare 21 Business Coalition admits some businesses might find it more cost-effective to pay the penalty and forgo insurance.

"It's still unknown whether or not the health care reform will stimulate more employers to carry insurance or do the reverse," he said.

However, Mr. Burgess said one shouldn't underestimate powerful market forces -- such as health benefits as an employee recruiting tool -- that could counterbalance any incentive for employers to drop health plans.

"American business has made health benefits ... the premier benefit they give their employees and that they use to attract and keep really good employees," he said. "I just don't see how something rooted in their culture for 50 years, they're just going to abandon."

MEDICAID EXPANSION

Reform also will expand eligibility for Medicaid, the state-federal health program for the poor and disabled, to 133 percent of the federal poverty level.

In Tennessee, that's an estimated 250,000 more people who could qualify for TennCare. Using most recent census data from 2006 to 2008, estimates show that about 59,257 people in Hamilton County would qualify financially for TennCare, compared with the 53,999 who currently are enrolled.

In Georgia, about 673,968 could qualify for Medicaid statewide, according to the state's estimate, based on the U.S. Senate Leadership bill, which also extended eligibility to 133 percent of the poverty level.

In Tennessee, new enrollees mostly will be adults without children who don't earn enough to afford private coverage but don't fall into any of TennCare's current eligibility categories, which protect mainly pregnant women and children, and those with disabilities and certain diseases, said Tony Garr, president of the Tennessee Health Care Campaign in Nashville. The group lobbied heavily for health care reform.

The homeless, people with mental illness and childless adults who previously couldn't afford private insurance will benefit enormously, he said.

He said, though, that the premium levels for coverage in the insurance exchange still remain to be seen.

"One of our concerns was trying to make the exchange more affordable," he said. "We know we're going to have to try it, put (reform provisions) out there and it's going to have to be tweaked."

Project Access in Hamilton County treats low-income patients who earn up to 150 percent of the federal poverty level and can't get health insurance otherwise, so reform should help some of those patients but certainly not all of them, said Rae Bond, executive director of the program.

Some estimates show that 20 million in the United States still will be uninsured after health reform, she said.

"We're going to keep doing what we're doing, and what we need to do may change a little bit depending on who's able to get coverage," she said.

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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Sam72 said...

Just as financial companies rely on “credit reports” to establish credit for customers, insurance companies utilize “medical report” files to assess the health, insurability, and price ratings for individual health insurance applicants. The Federal laws FCRA and FACTA, which govern the credit bureaus Experian, Equifax, and TransUnion, also regulate the nationwide specialty insurance reporting agencies the Medical Information Bureau Inc (MIB), Ingenix Inc., and Milliman Inc.

In fact, failing to check your medical report can be costly; errors or omissions within individual medical report files can cause applicants to be rejected outright, pay higher policy premiums, or suffer outright rescission of coverage! (For example, “Denied Insurance Because of a Medical Coding Error in Her MIB Report” from the Consumer Reports Health Blog) https://www.annualmedicalreport.com/denied-insurance-because-of-a-medical-coding-error-in-her-mib-report-video/

Simple Tip: All health insurance applicants and policyholders should request an annual copy of their “medical report” files from the three major specialty nationwide consumer reporting agencies to ensure they aren’t overpaying for insurance or in danger of policy rejection or rescission for reported pre-existing conditions.

April 5, 2010 at 9:12 a.m.
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