Insurance expenses: Many fear that benefits will fall and premiums, deductibles will rise
Carolyn Silacci is worried. The Salinas resident has an 11-year-old son, Evan, with multiple sclerosis, an autoimmune disease that has landed him in the hospital dozens of times since he was diagnosed several years ago, including a 22-day stay at Lucile Packard Children’s Hospital at Stanford. The treatments run into the tens of thousands of dollars.
Silacci and her husband, Kevin, both get health insurance through their jobs — hers at a tractor dealership and his at an agricultural firm — and the bulk of Evan’s care is covered by their health plans. But Silacci is concerned that the changes proposed in the health care bill passed by the House of Representatives last
week could lead to higher out-of-pocket costs for Evan’s doctors’ visits, MRI tests and infusion treatments.
That could happen if the bill — which must still be approved by the Senate — becomes law, health policy experts say. The GOP measure would allow states to opt out of requirements for insurance companies that were put in place by the 2010 Affordable Care Act, including the prohibition on annual and lifetime caps for essential benefits like hospitalizations, and the ban on charging sick people more than healthy people.
If a state were to seek such a waiver, insurance companies selling plans in that state would no longer have to comply with those rules. Although California is unlikely to seek such a waiver, employers here could adhere to the laxer requirements in states that did choose the waiver — potentially leading to millions of Americans seeing their work-sponsored health plans scaled back.
In 2009, 59 percent of U.S. workers with employer-provided health insurance were in a plan with a lifetime cap on how much it would cover, according to a Kaiser Family Foundation health benefits survey.
“If insurance companies put caps on care, (Evan) would be capped out in one or two years if he had a relapse,” Silacci said. “That’s a huge problem for anyone with a chronic illness. You’ll cap out quickly . ... It’s a very scary thing for a lot of us who have children with a condition.”
The bill’s passage in the House is prompting worry and anxiety for many Californians. Some are concerned they may face higher insurance premiums and out-ofpocket costs, or paredback benefits. Both are very real possibilities under the GOP plan, according to health policy analysts.
“The core function of health insurance is supposed to make sure when people get seriously ill, they’re financially protected,” said Matt Fiedler, a health policy expert at the Brookings Institution. “With these types of limits in place, that’s not possible.”
In addition to the bill’s proposed changes to lifetime limits, the measure would cut federal dollars to the state’s Medicaid insurance program, Medi-Cal, by up to $24 billion over the next decade, likely leading to millions of poor residents getting reduced benefits.
“For me, that would be disastrous because MediCal pays most of my medication costs and my doctors visits,” said Paul Haskins, a retired aquatic biologist in San Bruno whose benefits are jointly covered by Medicare and Medi-Cal. Haskins, 66, has struggled to manage diabetes for four decades, and recently needed foot surgery to relieve persistent foot ulcers linked to his condition.
The GOP proposal would also restructure federal subsidies to the 1.2 million residents who buy their plans on Covered California, the state exchange. Moving from an income-based subsidy to a flat age-based subsidy, as the bill mandates, would benefit people in their 20s, who typically pay lower premiums, but hurt people in their 50s and 60s, whose insurance typically costs more. And the bill would allow insurance companies in the individual market to charge older people five times more than what they charge younger people; under the existing health law, insurers cannot charge older people more than three times what they charge younger people.
“That’s the change that’s the scariest because I don’t know what insurance companies will choose to do,” said Rich Jepsen, 61, who receives a federal subsidy to buy health insurance from Blue Shield through Covered California. “When insurance companies are released from their obligations to provide affordable care, I don’t know what that means.”
Jepsen, a retired sailing club operator in Alameda, hopes that any potential changes in the law will not occur until after he and his wife Cecilia Trost, 62, a retired engineer, qualify for Medicare in a few years.
“The opportunity for things to get super expensive from year to year are there,” Jepsen said. “With Obamacare, there were some protections. Now it sounds like all of that protection goes away.”
An analysis by the Kaiser Family Foundation found that people in their 60s who buy on the insurance exchange, like Jepsen and Trost, would take the largest financial hit by the bill’s changes to the subsidies. That is because their premiums would go up more dramatically, while the proposed flat subsidy would not go as far.
While California officials embraced the Affordable Care Act more quickly and aggressively than many other states, the law is not without its problems. Many people who buy insurance on the individual market, as well as small business owners, are paying higher premiums for skimpier plans — with higher co-pays and deductibles — than they were before the law passed.
Following the implementation of the act, Paul Holton, a retired financial analyst in San Francisco, had to cancel his previous insurance plan because it did not meet the requirements under the new law. His new plan is significantly more expensive, but Holton said he does not need coverage for benefits like maternity care.
“I had always picked and chosen what coverage I needed,” he said. “They told us we’d be
“When insurance companies are released from their obligations to provide affordable care, I don’t know what that means.” Rich Jepsen, 61, who receives a federal subsidy to buy health insurance through Covered California
able to keep our old health insurance, but they didn’t tell anyone that you can only keep it if it qualifies under the new rules.”
Holton said the House bill is a start to fixing a flawed health care law.
“There are a lot of problems with Obamacare and I think we have to deal with the issues and get the ball rolling,” he said. “The House did the easy part. Now it’s up to the Senate to do the hard part.”