Controversial reforms in health insurance offers benefits for some, higher costs for others

Controversial reforms in health insurance offers benefits for some, higher costs for others

September 15th, 2013 by Associated Press in Business Around the Region

Amy Brighton, of Medina, Ohio, protests in front of the Supreme Court. Political divisions over "Obamacare" have driven most Republican-led states to turn their backs on the biggest expansion of the social safety net in a half century.

Photo by Associated Press/Times Free Press.

Timeline

March 23, 2010 - Obama signs the Patient Protection and Affordable Care Act (ACA). Democrats hail an achievement their party pursued for more than 50 years - individuals' right to health care. The law requires most Americans to carry health insurance starting in 2014, and bars insurers from turning away the sick. It creates state markets for middle-class people without workplace coverage to purchase private insurance, subsidized with tax credits. It expands Medicaid for the low-income uninsured. After long debate, the legislation barely passed a divided Congress, with no Republican support.

March 29, 2010 -Health and Human Services Secretary Kathleen Sebelius and the health insurance industry reach a deal to fix the first glitch emerging from the complex legislation: vague language that compromised a guarantee that children with pre-existing medical conditions could get coverage right away.

Fall 2010 - During open enrollment, most health insurance plans begin offering coverage to young adults up to age 26 on a parent's policy. The popular early provision expanded coverage to more than 3 million people. Plans also begin covering preventive services at no charge.

Nov. 2, 2010 - Democrats lose control of the House in midterm congressional elections. Republicans campaigned on a vow to "repeal and replace" the law.

Jan. 19, 2011 - The Republican-led House votes to repeal "Obamacare," but the drive falters in the Senate, where Democrats retain a majority. Since then, the House has repeatedly voted to repeal, defund or in some way scale back the law. Republican replacement legislation has been stymied by divisions within the party.

Jan. 31, 2011 - Florida U.S. District Judge Roger Vinson rules that the ACA is unconstitutional. The lawsuit by 26 states would ultimately reach the Supreme Court.

April 5, 2011 - Congress votes to repeal an unpopular tax requirement in the law that would have forced millions of businesses to file tax forms for every vendor selling them more than $600 in goods. Agreeing to sign it, Obama says he'll make fixes as warranted.

June 21, 2011 - The Obama administration says it will look for fixes to another glitch, a twist that would have let several million middle-class people receiving Social Security payments get nearly free insurance meant for the poor. Enacted later, the fix saved an estimated $13 billion over 10 years.

Summer 2011 - Seniors hitting Medicare's prescription drug coverage gap start getting a 50 percent discount on brand name medications, part of the health care law's gradual closing of the "doughnut hole." In 2011, the typical senior in the gap saved about $600 on bills averaging $1,500.

Aug. 1, 2011 - Sebelius declares that most health plans will have to cover birth control for women as a preventive service, free of charge. The coverage became available in 2013, as lawsuits proliferated from groups and businesses objecting on religious grounds.

Oct. 14, 2011 - Sebelius pulls the plug on the ACA's long-term care insurance program, because of doubts over its long-term financial solvency. The program was a priority of the late Massachusetts Democratic Sen. Edward M. Kennedy.

Nov. 14, 2011 - The Supreme Court announces it will hear the constitutional challenge to the ACA, setting the stage for an election-year decision.

Fall/Winter 2011-2012 - Republican presidential candidates are united in their determination to repeal "Obamacare." Former Massachusetts Gov. Mitt Romney, whose state health law was seen as a model for Obama's, says he'd sign an executive order on Day One of his presidency granting a waiver to all 50 states.

March 26-28, 2012 - Supreme Court holds three days of oral arguments on the ACA. The administration's lawyer fumbles his defense, and opponents feel momentum breaking their way.

June 28, 2012 - With the unlikely support of conservative Chief Justice John Roberts, the Supreme Court upholds the law's core requirement that most Americans carry health insurance, ruling that the penalties to enforce it are a tax Congress is authorized to levy. But the court allows states to individually opt out of the Medicaid expansion, which accounts for about half the law's coverage expansion.

Summer 2012 - Employers and consumers receive more than $1 billion in rebates from their insurers, which are required under the ACA to spend at least 80 cents of every premium dollar on medical expenses and quality improvement, or refund the difference.

Nov. 6, 2012 - Obama is re-elected to a second term, deflating Republican repeal hopes.

Nov. 8, 2012 - House Speaker John Boehner says in an interview that "Obamacare is the law of the land." His spokesman quickly adds that the Ohio Republican remains "committed to full repeal."

Jan. 1, 2013 - Tax increases to finance the ACA take effect on about 2.5 million households, individuals making more than $200,000 per year and couples over $250,000.

Winter/Spring, 2013 - States decide whether they'll run the new insurance markets and expand their Medicaid programs.

April 30, 2013 - Obama administration unveils simplified forms consumers will use to apply for health insurance and financial assistance to pay their premiums. The first version was criticized as too complicated.

July 2, 2013 - In a surprise, the White House announces a one-year delay - until 2015 - of the law's requirement that companies with 50 or more workers must provide affordable coverage or pay fines. The administration says it's trying to iron out burdensome reporting requirements.

Oct. 1, 2013 - Online insurance markets are scheduled to open in every state. Consumers must sign up by Dec. 15

WASHINGTON - Having health insurance used to hinge on where you worked and what your medical history said. Soon that won't matter, with open-access markets for subsidized coverage coming Oct. 1 under President Barack Obama's overhaul.

But there's a new wild card, something that didn't seem so critical when Congress passed the Affordable Care Act back in 2010: where you live.

Entrenched political divisions over "Obamacare," have driven most Republican-led states to turn their backs on the biggest expansion of the social safety net in a half century. If you're uninsured in a state that's opposed, you may not get much help picking the right private health plan for your budget and your family's needs.

The differences will be more glaring if you're poor and your state rejected the law's Medicaid expansion. Unless leaders reverse course, odds are you'll remain uninsured. That's because people below the poverty line do not qualify for subsidies to buy coverage in the markets.

"We are going to have a new environment where consumers may be victims of geography," said Sam Karp of the California HealthCare Foundation, a nonprofit helping states tackle practical problems of implementation. "If I'm a low-wage earner in California, I may qualify for Medicaid. With the exact same income in Texas, I may not qualify."

The health care law is finally leaving the drawing boards to become a real program with citizens participating. But in many parts of the country, the decisions of Republicans opposed to the law will trump the plans of Democrats who wrote it.

Still, there is a new bottom line. Health insurance marketplaces in every state will provide options for millions of people who don't have job-based coverage, who can't afford their own plan or have a health problem that would get them turned down. The feds will run the markets in states that refused to do so.

The coverage won't be free, even after sliding-scale subsidies keyed to your income.

That's significant because starting next year most Americans will also have a legal obligation to get covered or face fines. Some people who now purchase bare-bones individual plans will complain the new ones cost too much. Others, in good health, may resent the government telling them to purchase insurance they don't think they need.

Nonetheless, the number of uninsured people is expected to drop markedly, bringing the United States closer to other economically advanced countries that guarantee coverage.

The combination of subsidized private insurance through the new markets, plus expanded Medicaid in states accepting it, could reduce the number of uninsured by one-fourth or more next year. Current estimates of the uninsured range from around 49 million to well over 50 million.

As Americans get more familiar with the law - and if more states accept the Medicaid expansion - millions more should gain coverage. Many of the remaining uninsured will be people living in the country illegally. They are not entitled to benefits.

In Texas, Republican Gov. Rick Perry has vowed not to facilitate "Obamacare." But Cecilia Fontenot of Houston is looking forward to the opening of that state's federally run insurance market.

A part-time accountant in her early 60s, Fontenot is uninsured and trying to stay healthy while coping with diabetes, high blood pressure and high cholesterol.

Also on her mind is a breast lump detected about a year ago. Her doctor recommended a digital mammogram, but she has not been able to afford the more involved test.

"I try not to worry and just pray on it," said Fontenot.

Because of her pre-existing conditions, Fontenot would have a tough time finding affordable individual coverage today. But starting Jan. 1, insurers will no longer be able to turn away people with health problems or charge them more.

And the government will provide sliding-scale tax credits that can make premiums more affordable for households earning between 100 percent and 400 percent of the federal poverty line. That's $11,490 to $45,960 for an individual, $23,550 to $94,200 for a family of four.

People on the low end of the income scale get more help, as will older people, whose premiums are higher.

With an annual income of about $23,000, Fontenot makes too much to qualify for Medicaid.

But she would qualify for subsidized private coverage in the federally run Texas marketplace. She could apply online, through a call center, by mail or in person.

After the government verifies her identity, legal residence and income, Fontenot would be able to take her tax credit and use it to pick an insurance plan. Coverage takes effect Jan. 1.

She'd have up to four levels of coverage to choose from: bronze, silver, gold and platinum. All cover the same benefits, but platinum has the highest premiums and lowest out-of-pocket costs, while bronze has the lowest premiums and highest out-of-pocket costs.

Fontenot's share of premiums would be capped at 6.3 percent of her income, or $1,450 a year for a benchmark silver plan. She'd have to squeeze about $120 a month out of her budget, and that doesn't include her annual deductible and copayments.

"If I want to stay alive, I'm going to have to budget that in," said Fontenot.

With insurance, she'd switch to a brand-name diabetes drug that does a better job of controlling her blood sugars - and get that mammogram.

"I am not asking for free stuff," she added. "I am willing to do my part."

Like Fontenot, many of the people who'll access the markets Oct 1 will have health problems. It's where the greatest need is.

But two other groups are critical to the program's success: Healthy uninsured people, many of them in their 20s and 30s, and insured people who will switch over from existing individual policies.

Healthy individuals are needed to help pay for the sick.

And with instant feedback via social media, reviews by people switching from existing individual plans could define early consumer sentiment.

Some of those transitioning will be looking for better deals. Others will be there because their insurers canceled policies that didn't meet the law's minimum standards, and they may be upset.

Consumers don't have to decide on Oct. 1. You have until Dec. 15 to sign up if you want coverage by Jan. 1. And you have until next Mar. 31 if you want to avoid penalties for 2014. Fines start as low as $95 the first year but escalate thereafter.

Procrastinate beyond Mar. 31, and you'll have to wait until the next open enrollment period in Oct. 2014, unless you have a life-changing event like job loss, divorce or the birth of a child.