One of the easier sells of the polarizing health care reform legislation has been the guarantee of affordable health coverage for those who most often desperately need care: people with pre-existing medical conditions.
For Chattanooga resident Darlene Smith, who faced exorbitant monthly insurance rates for years after she was diagnosed with advanced breast cancer in 2003, these insurance reforms are paramount.
“I think the (health care) bill’s really flawed, but we all know that pre-existing conditions (protections) are a must-have,” said Mrs. Smith, 52.
But how the change will affect private insurers — who today can deny coverage or charge more to people with pre-existing conditions in anticipation of higher medical claims — remains to be seen.
The reform bill requires people to buy health insurance. Insurers should enroll millions of paying customers, including young and healthy enrollees. Analysts say that could offset losses on their sicker customers.
But Roy Moore, senior market analyst for HealthLeaders-InterStudy Research in Nashville, said there’s also a chance “this could blow up in the face of insurers” if people who have been locked out of coverage unleash years of “pent-up demand” for medical care.
Six months after health care reform takes effect, children with pre-existing conditions cannot be excluded from their family’s coverage. Starting in 2014, insurers also must cover adults with pre-existing conditions.
The legislation provides $5 billion to finance a national high-risk insurance pool. Starting in three months, it will offer coverage to people with pre-existing conditions who have been uninsured for at least six months.
Those provisions are a huge relief, said Gordon Bonnyman, executive director of the Tennessee Justice Center in Nashville.
“Those reforms, I think, are just fundamental to making the insurance system work right,” Mr. Bonnyman said. “It’s hard to overstate how important (health insurance) is if you have a chronic condition or you have a history of having had a serious injury or illness.”
In the 1990s, about 67,000 Tennesseans considered uninsurable got coverage through TennCare, the state’s Medicaid program. Those people lost their coverage in 2005 when the state reined in the program’s out-of-control costs.
The changes under reform are “really good news for those people. They’ve basically been blacklisted until now,” Mr. Bonnyman said.
IMPACT ON HEALTH
In 2007, 12.6 million nonelderly adults, or 36 percent of people trying to buy private health insurance, were turned down, charged a higher price or had a specific health condition excluded because of a pre-existing condition, according to a 2009 report by the Commonwealth Fund, a private foundation that works on health care issues.
That’s no surprise to Kay Pfeifle, of Chattanooga, a self-employed trucker.
She had lost her employer-provided insurance when she lived in Arkansas. When she contracted hepatitis C in the 1990s, Mrs. Pfeifle said, she couldn’t buy private insurance.
For 12 years, Mrs. Pfeifle paid for her own care, even writing a $700 check for a mammogram and Pap smear, she said. She turned 65 this year and enrolled in Medicare.
“I’m just glad I’m getting the care that I haven’t been able to get,” she said.
Diana Allen is CEO of Primary Health Care Center, a nonprofit that has community health centers in Trenton, Ga., and Rossville.
She said the centers see many uninsured patients who pay for care on a sliding scale based on income.
“They are much sicker by the time they do find out about us and come to see us because they haven’t had the money to pay out of pocket for their health care,” she said.
Mrs. Smith was diagnosed with advanced breast cancer in 2003, just six weeks after she switched from full-time to part-time work and signed up for the small group plan offered through her husband’s automobile sales business.
After her diagnosis, their rates began to climb “astronomically,” finally reaching $30,000 a year, she said.
“How many people can afford that? We’re just normal people,” she said.
She went looking for individual insurance but was turned down repeatedly because of her history of cancer. She finally found a guaranteed-issue, high-risk plan from BlueCross that would cover her pre-existing condition. Last year she paid $1,460 a month for coverage with a $2,000 deductible, she said.
In January, Mrs. Smith went back to work full time and got group coverage. She is passionate about the need to help people in the same situation she was — those who make too much to qualify for Medicaid but struggle to afford private insurance.
“What happens to people who are caught in between? What happens to small businesses that are trying to make a go when one illness can wipe out a business or a family?” she said.
IMPACT ON INSURERS
The big question for insurers is whether the mandate that everyone buy health insurance by 2014 or face penalties will counterbalance their new risks.
“The biggest worry for all insurers is adverse selection, that the sicker people join and the healthier people don’t,” Mr. Moore of HealthLeaders said.
Under health reform, insurers must cover everyone, no matter how sick, and can’t charge the sick more than the healthy. Premiums for older people now can be no more than three times higher than those for a younger person.
So sick and older people will pay less, while younger and healthy people will be charged higher premiums to offset the risk, said Jim Srite, chief actuary at BlueCross BlueShield of Tennessee.
That could prompt some young people just to pay the penalty and go uninsured, Mr. Srite said.
John Sorrow, Mid-South region president for Cigna Healthcare, said premiums likely will rise as insurers are exposed to greater risk under reform.
“However, the degree to which premiums increase will depend on the interaction of many other provisions in the law such as the individual and employer mandate, medical loss-ratio provisions, annual and lifetime limits and others,” he said in an e-mail.
FAST FACTS
* A pre-existing condition is a health problem that exists before a person purchases an individual insurance policy. Definitions vary by state, according to the Kaiser Family Foundation.
* In 2007, 12.6 million non-elderly adults, or 36 percent of people seeking insurance on the individual market, were turned down, charged more or had a specific health condition excluded because of a pre-existing condition, according to the 2009 Commonwealth Fund.
CHANGES UNDER HEALTH CARE REFORM
* Ninety days after reform legislation goes into effect, adults can get coverage in a temporary, national high-risk insurance pool set to expire in 2014.
* Six months after enactment, insurance companies can’t deny coverage on a family’s existing plan to children with pre-existing conditions.
* Beginning in six months, there will be no lifetime limits on the dollar value of coverage and insurers cannot drop coverage because of illness.
* Starting in 2014, adults can’t be denied insurance or have their rates raised because of a pre-existing condition.
* Also in 2014, insurers cannot impose annual limits on coverage payouts.
* Insurers’ ability to base premiums on age will be limited. Gender-rating will be prohibited in individual and small group market.
Source: Kaiser Family Foundation, National Organization for Women
More
The Times Free Press will examine the impact of health care reform in coming days.
* Wednesday: Health care — fact vs. fiction
* Friday: Money for student loans
* Saturday: Calorie counts on menus and drive-throughs