State

Many in Stanislaus County lack insurance, on government plans

In approving an overhaul of the health care system, Congress seemed to write a prescription for a place like Stanislaus County, with its large numbers of residents who are uninsured or in government health programs.

The federal government, starting in 2014, will offer subsidies to help families and individuals buy affordable health insurance and will expand the federal and state Medi-Cal program now serving almost 124,000 county residents.

It will require almost everyone to have insurance -- or pay a fine.

Some county health-care providers praised the bill Monday, saying it will provide security for consumers and expand the base of patients able to pay for medical care.

Some predicted, however, a shortage of doctors to serve the newly insured. And business owners were trying to figure how the reforms will affect their bottom lines.

Denny Litos, chief executive officer of the for-profit Doctors Medical Center in Modesto, was one hospital executive who thought something needed to change.

He cited data suggesting that almost half of the county's population of 526,383 are uninsured or in the Medi-Cal program, owing to chronic unemployment and the recession. His estimate is based in part on a UCLA Center for Health Policy Research report finding that almost one in four Californians lacked insurance for all or part of 2009.

"These kind of numbers are not sustainable in the long term," said Litos, who urged Rep. Dennis Cardoza, D-Merced, to vote for the bill. "You have fewer and fewer health care providers willing to take uninsured and Medi-Cal patients. It makes it hard to serve the population."

Dr. Amarjit Dhaliwal, a cancer specialist in Modesto, praised the section of the bill that will prevent insurers from dropping or rejecting patients who have ongoing medical conditions. He said he has seen women with breast cancer dropped from insurance coverage in the middle of treatment.

"That is not going to happen any more," the oncologist said.

Primary care crunch

Still, reaction to the sweeping bill was mixed among medical professionals.

Dr. Lisa Masson, president of the Stanislaus Medical Society, said she would prefer incremental changes to fix problems in the health system. She was reluctant to share all of her concerns with the bill.

"I am not at all convinced this bill is the step we need," she said. "Just crunching the numbers will show you need more primary care physicians to make this happen."

The California Primary Care Association, representing more than 800 community health centers in the state, believes the Medi-Cal expansion will add 1.7 million people to the health program, and an additional 2 million to 3 million will buy health insurance.

Carmela Castellano-Garcia, the group's chief executive officer, said the impact on the Central Valley will be profound, although the region's undocumented population won't be able to buy subsidized insurance.

Besides giving Medi-Cal benefits to childless adults for the first time, the bill includes $9.5 billion to help community health centers expand services and hire health care providers. An additional $1.5 billion is set aside for paying the education loans for new doctors agreeing to work in medically underserved areas such as the San Joaquin Valley.

There is not much immediate relief in the bill, however, for low-income residents hit by recent health care cuts or the additional cuts in Gov. Schwarzenegger's proposed 2010-11 state budget. The Medi-Cal expansion will not happen until 2014, unless the state by some miracle agrees to fund it starting in 2011.

"There is a lot of devastation that could happen to the safety net between now and then, given the economic crisis that is happening in our state," Castellano-Garcia said.

Patient advocates were trying to assess how the bill will affect the senior population. The legislation will phase out the "doughnut hole" in Medicare prescription plans, a coverage gap that requires sen-iors to pay for drugs when their annual cost exceeds $2,830 in a year.

On the other hand, the government will reduce subsidies for insurers that sell extra medical coverage to sen-iors through Medicare Advantage plans. The premiums for the plans in this county range from zero to $109 a month.

What's next?

"I am sure (the insurers) will raise their rates," said Frank Dotson, director of the Stanislaus County Health Insurance Counseling and Advocacy Program. "We will have to see what they will do to keep their members and what else they will offer if they do raise their rates."

LOOKING AHEAD

Here is a long-term look at health care overhaul changes and when they take effect. The measure:

2011

Creates a voluntary long-term care insurance program to provide a modest cash benefit helping disabled people stay in their homes or cover nursing home costs. Benefits can begin five years after people start paying a fee for the coverage.

Provides Medicare recipients in the prescription coverage gap with a 50 percent discount on brand-name drugs; begins phasing in more drug discounts to close the gap by 2020.

Provides 10 percent Medicare bonus to primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities; improves preventive coverage

Freezes payments to Medicare Advantage plans, the first step in reducing payments to the private insurers who serve about one-fourth of seniors. The reductions would be phased in over three to seven years.

Boosts funding for community health centers, which provide basic care for many low-income and uninsured people

Requires employers to report the value of health care benefits on employees' W-2 tax statements

Imposes $2.3 billion annual fee on drug makers, increasing over time

2012

Sets up program to create nonprofit insurance co-ops that would compete with commercial insurers

Initiates Medicare payment reforms by encouraging hospitals and doctors to band together in quality-driven "accountable care organizations" along the lines of the Mayo Clinic. Sets up a pilot program to test more efficient ways of paying hospitals, doctors, nursing homes and other providers who care for Medicare patients from admission through discharge. Successful experiments would be widely adopted.

Penalizes hospitals with high rates of preventable readmissions by reducing Medicare payments

2013

Standardizes insurance company paperwork, first in a series of steps to reduce administrative costs

Limits medical expense contributions to tax-sheltered flexible spending accounts to $2,500 a year, indexed for inflation

Raises threshold for claiming itemized tax deduction for medical expenses from

7.5 percent of income to 10 percent. People 65 or older can deduct medical expenses that exceed 7.5 percent of income through 2016.

Increases Medicare payroll tax on couples making more than $250,000 and individuals making more than $200,000. The tax rate on wages exceeding those thresholds would rise to 2.35 percent from 1.45 percent. Adds a new tax of 3.8 percent on income from investments.

Imposes a 2.3 percent sales tax on medical devices. Eyeglasses, contact lenses, hearing aids and many everyday items bought at the drugstore are exempt.

2014

Prohibits insurers from denying coverage to people with medical problems or refusing to renew their policy. Health plans cannot limit coverage based on existing conditions or charge higher rates to those in poor health. Premiums can only vary by age (no more than 3-to-1), place of residence, family size and tobacco use.

Accelerates coverage expansion as states create health insurance exchanges -- supermarkets for individuals and small businesses to buy coverage. People who have employer coverage won't see any changes.

Provides income-based tax credits for most consumers in the exchanges, substantially reducing costs for many. Sliding scale credits phase out completely for households that make more than four times the federal poverty level, about $88,000 for a family of four.

Expands Medicaid to cover low-income people who earn up to 133 percent of the federal poverty line, about $28,300 for a family of four

Covers low-income childless adults for the first time

Requires citizens and legal residents to have health insurance, except in cases of financial hardship, or pay a fine to the Internal Revenue Service. Penalty starts at $95 per person in 2014, rising to $695 in 2016. Family penalty capped at $2,250. Penalties indexed for inflation after 2016.

Penalizes employers with more than 50 workers if any workers get coverage through the exchange and receive a tax credit. The penalty is $2,000 times the number of workers employed at the company. However, employers get to deduct the first 30 workers.

2018

Imposes a tax on employer-sponsored health insurance worth more than $10,200 for individual coverage, $27,500 for a family plan. The tax is 40 percent of the value of the plan exceeding the thresholds, indexed for inflation.

2020

Phases out doughnut hole coverage gap in the Medicare prescription benefit. Seniors continue to pay the standard 25 percent of their drug costs until they reach the threshold for Medicare catastrophic coverage, when copayments drop to 5 percent.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or 578-2321.

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