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Affordable Care Act set to kick in: Health care reform 101

Imperial Valley Press, January 27, 2013

 By Alejandro Dávila

It’s been years since Graciela Hernandez had health insurance and although she has diabetes, the last time she saw a doctor was two years ago.

The Brawley resident does qualify for Medi-Cal, but her share of cost came out to be almost $1,000 a month. “So there’s no way I could afford that. … I might as well go without insurance,” said Hernandez, a 51-year-old customer representative who lives on minimum wage.

Being without insurance for three years “has been difficult, it (has), I mean, I’m sick and I need medication. So what I started doing is getting my medication across the border,” said Hernandez, who follows the prescription she was given years ago. “I don’t know where I stand really, health-wise,” she added.

But Hernandez has another problem incurred by her lack of health-care coverage: emergency room hospital bills. Since Hernandez doesn’t have insurance, she waits until she is very sick before she seeks care. “I do have some bills in collections,” she said and estimated she owes around $14,000 in medical bills.

“I’m sure my mom is not the only one,” said Jesse Macias, while referring to Hernandez. “I’m sure there are many, many residents who are experiencing the same thing my mother is.”

Macias is correct. His mother is one of some 48.6 million people who were uninsured in the United States as of 2011, according to U.S. Census Bureau figures. She is also part of the 26 percent of women who had problems paying medical bills in the country in 2009-2010, according to a 2012 report by the Commonwealth Fund, a nonprofit that supports the Affordable Care Act approved in 2010.

A health care problem

The Affordable Care Act, mostly upheld by the U.S. Supreme Court last summer, hopes to address the problems that people like Hernandez have. Not everybody may be politically on board with the particulars of the act, widely referred to as “Obamacare,” but nonetheless research suggests the country has numerous health-care systemic problems that need to be addressed.

To begin with, the United States is the only developed nation without a form of universal health care coverage and it also has the most expensive health-care system in the world. Moreover, costs are projected to increase with health spending rising by about 5.8 percent each year from 2010 to 2020, according to 2011 actuaries from the Centers for Medicare and Medicaid Services.

These high costs, another Commonwealth Fund study notes, are likely caused by higher prices, more readily accessible technology and greater rates of obesity. A number of other studies also suggest administrative costs related to health care in the United States are higher compared to other nations.

And of course, a high number of U.S. citizens don’t have health-care insurance. Many employers don’t offer it and while some people can’t afford private insurance, others are denied coverage over pre-existing conditions. As a result, people like Hernandez tend to visit the emergency room instead of visiting a primary care physician, incurring debt that many can’t pay. 

A health care solution

Uncertainty about the Affordable Care Act is ongoing, with some questioning the mandate that requires — with various exceptions — that individuals buy health insurance or pay a penalty.  On the other hand, many approve of the health-care reform in that it expands Medicaid and Medi-Cal eligibility for millions of people.

“The Affordable Care Act expands eligibility to all lawfully present adults who have incomes of $15,000 a year for a single person or $32,000 for a family of four,” said Laurel Lucia, policy analyst at the University of California, Berkeley, Center for Labor Research and Education.

For people with incomes of up to $45,000 for a single person and $90,000 for a family of four, they could be eligible for subsidized coverage provided by a private insurance company. Companies would offer their plans through a somewhat government controlled health insurance market being set up by the end of this year called Covered California.

So if a person doesn’t have access to base coverage by an employer or if they are not eligible for a public program, Lucia said that depending on their income level, “they can get this private health insurance that the federal government will pay part of the premium.”

Above that income level, the main benefit of Obamacare is that starting in 2014 insurers have to provide insurance to anyone that applies, regardless if they have a pre-existing condition, she said.

“I think it (Obamacare) will stabilize the health-care system because more people will get coverage and there will be more predictability in terms of where the payment is coming from,” said Lucia.

A phase-in process

But the Affordable Care Act wasn’t designed to be implemented abruptly. Still, analysts like Lucia note health-care reform brings “a lot of changes and it’s going to happen very quickly.”

One of the things that went into effect right away in 2010 was a tax credit so small business could offer health insurance to employees, Imperial County Public Health Director Robin Hodgkin said. A so-called national high-risk pool was also established temporarily, so that people that have major medical issues can get insurance, she said.

2011 was a fairly popular year for the act, Hodgkin said, as many of the issues people disliked about health-care insurance were addressed. Parents were allowed to keep their children on their insurance plans up to age 26 and funding for preventive-care programs was provided, said Hodgkin, who noted preventive care could really drive down the cost of health care. Annual limits and lifetime limits to beneficiaries were also taken away, among other things.

A push for electronic exchange of information was one of the things the Affordable Care Act did for the health-care industry in 2012, according to healthcare.gov, which lists that in 2013 the act is requiring states to pay to physicians 100 percent of Medicare payments for primary-care services in 2013 and 2014.

And then there’s 2014, which Hodgkin said will be a “watershed year.” The health insurance market will be implemented then, and affordable plans offering base benefits will be sold “in plain English,” she said. Individual mandate will also be enforced, Hodgkin said, noting at that point Obamacare hopes to insure more than 30 million people.

And yet many are concerned about 2014, said Hodgkin, adding the individual mandate “is still not popular across the board, although there are many segments in society that say: hey, we all have to have car insurance.”

Pay concerns

For Hernandez, though, her main concern isn’t the mandate, but the plans that will be available and whether they’ll cover the medications she needs and buys month after month in Mexico. Most importantly, Hernandez said she is concerned about” how much is going to come out of our pockets.”

And concerns about paying for insurance involves the government as well, with unanswered questions about who pays for this unprecedented expansion of coverage.

The federal government will pay 100 percent of costs for three years and over time that percentage will decrease to 90 percent, Lucia said.

Federal law says the federal government will pay at least 90 percent indefinitely. But then there’s the question in California about who would pay the remaining 10 percent, said Lucia, if it will be the state or the county.

And that, like various aspects of this reform, will have to be determined sooner rather than later.

Staff Writer Alejandro Dávila can be reached at 760-337-3445 or adavila@ivpressonline.com

Original Article


 
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