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HOME > ABOUT > PRESS > HOW SONOMA COUNTY WILL FARE IN HEALTH OVERHAUL
Article published - January 16, 2010
Credit: PRESS DEMOCRAT
How Sonoma County will fare in health overhaul
by Guy Kovner
Deanna Dennard and Thomas Boyd of Sebastopol, both 41 and expecting their first child in May, have a lot riding on the health care bill awaiting final congressional action.
The couple, partially eligible for Medi-Cal coverage, will pile up about $4,000 in deductibles for medical exams and tests before their baby arrives.
Whether the government picks up that tab or the couple has to put it on a credit card hangs in the balance as the nation awaits fine-tuning of a complex, hotly debated law expected to bring 30 million Americans under the health insurance umbrella.
“We're crossing our fingers,” Boyd, a water systems installer, said during a prenatal checkup at the Occidental Area Health Center. “It's going to be really difficult,” he said, to pay the deductibles and then meet the costs of a new baby.
The landmark legislation — a political promise by President Barack Obama — is in the hands of Senate and House Democratic leaders who are hammering out a reconciliation of the two bills, with the goal of getting a measure to the president before his State of the Union address next month.
While details of the House and Senate bills are labyrinthine and in many cases conflicting, analysts say much of the Senate's more than 2,000-page bill will prevail, giving an early prognosis for the legislation's impact on the North Coast.
The most sweeping changes would come to Sonoma County's 63,000 uninsured residents, to large businesses required to provide insurance and to individuals mandated to buy it.
The health care overhaul would enable about 40,000 of the county's uninsured residents under age 65 to gain coverage, according to a UCLA analysis of the legislation's impact on California.
Many residents who have low-income jobs or are self-employed would be required to sign up for some kind of private insurance, often with the help of government subsidies.
And many low-income families would be brought under the health care umbrella through expansion of government-funded care for the indigent.
About 2,080 low-income residents — including Dennard and Boyd — who now receive partial Medi-Cal coverage will gain full eligibility, relieving them of deductibles that average $1,000 a month.
Boosting income-based eligibility standards is expected to extend coverage nationwide to 15 million new people, half of the 30 million uninsured to be covered by the legislation. (Medi-Cal is California's version of Medicaid, the national insurance program for indigent families).
About 620 local businesses, which employ 46 percent of the county's private-sector work force, would be required to offer health coverage to their workers and their families or pay a $750 a year penalty per employee.
Firms that employ fewer than 50 people are exempt from that mandate, but individual workers would be required to obtain “acceptable health care coverage” or pay a penalty.
The bills call for creation of state exchanges to help people buy insurance, and subsidies to assist low-income residents in paying for the policies.
“If you don't get insurance somewhere, you're going to get whacked — and hard,” said David Hodges, a Santa Rosa health insurance broker.
Kaiser Permanente, which insures more than 170,000 county residents, expects that its plans for individuals and businesses will be included in the exchanges.
“Most KP members should not see changes to their plans,” Kaiser officials said in a statement. They said it was “too early to tell” if the overhaul will have any impact on Kaiser premiums.
The mandates and Medi-Cal expansion rank as two of the major game-changing features of the health care overhaul, which has fallen short of liberals' expectations while rankling conservatives.
In California, Medi-Cal expansion would cover about 1.7 million, or 26 percent of the uninsured population of 6.4 million people under 65, according to the UCLA Center for Health Policy Research. Another 2.3 million (37 percent of the uninsured) would become eligible for public subsidies to purchase insurance, the report said.
For a couple like Dennard and Boyd, the Senate bill would allow them to make up to $19,425 a year — $4,855 more than the current limit — and get full Medi-Cal coverage, eliminating deductibles. Both are self-employed, and Dennard assumes she will miss some work after the baby arrives.
“It's an issue,” Boyd said. “We want to have a (financial) cushion.”
Eliminating Medi-Cal deductibles for 2,080 county residents would save them $4.4 million a year in medical expenses, the Sonoma County Human Services Department said.
The results include “better health outcomes” for Medi-Cal participants and a cash injection into the local economy as they spend more on rent, clothing and food, said Jo Weber, Human Services Department director. “It's good for everybody,” she said.
Community health centers — with facilities in Santa Rosa, Petaluma, Sonoma Valley, Sebastopol, Occidental, Guerneville, Healdsburg and Alexander Valley — expect to absorb most of the newly eligible Medi-Cal patients.
The nonprofit centers currently care for 90,000 patients, including 50,000 who are eligible for Medi-Cal, said Nancy Oswald, executive director of the Redwood Community Health Coalition.
Because they receive higher Medi-Cal reimbursements than other providers, the health centers can afford an onslaught of low-income patients, Oswald said.
Taxpayers ultimately pick up the Medi-Cal tab, but it's cheaper than treating uninsured indigents who forego routine medical care and show up at hospital emergency rooms when they are seriously ill, she said.
Congressional Democrats and Republicans both favor community health centers because “we care for all” and “we're very cost effective,” Oswald said. The Senate bill includes $1.5 billion for health center construction over the next five years.
California hospitals, meanwhile, are reeling from the burden of nearly $11.4 billion in uncompensated patient care last year, including more than $4.2 billion from a shortfall in Medi-Cal reimbursements.
The prospect of adding more people to the Medi-Cal rolls without adjusting reimbursements “makes a bad situation worse,” said Jan Emerson of the California Hospital Association.
Santa Rosa Memorial, the county's largest hospital and part of the St. Joseph Health System, provided nearly $21 million worth of “charity care” to uninsured and underinsured patients in the past fiscal year.
Hospitals shift the cost of treating uninsured and underinsured patients onto those with insurance, creating a “hidden tax” that boosts insurance premiums in California by 10 percent, giving Gov. Arnold Schwarzenegger and others another argument for universal coverage.
Hospitals want universal health care, not through the liberal politico's dream of a government-run, or “single-payer” system, but through mandates that expand the market-based system, Emerson said.
Both the House and Senate bills include mandates for businesses and individuals to get health care coverage or pay significant penalties, such as the $750 a year per employee for businesses with 50 or more workers.
Mandates sweep more people into health insurance, which lowers cost through economies of scale, said Hodges, the broker who maintains health insurance plans for more than 400 companies from San Diego to Seattle.
Kaiser officials said the hidden tax will be “mitigated” when more people have health insurance.
The 2007 California Health Interview Survey conducted by the UCLA Center for Health Policy Research found that 61 percent of insured Sonoma County residents — a total of 262,000 people — had job-based health coverage, and that 38,000 were uninsured. A Census Bureau report said 63,000 county residents lacked health insurance in 2008.
Dr. Mary Maddux-Gonzalez, county public health officer, said she considers 63,000 a “conservative” estimate of the uninsured population, considering local job losses that have pushed the unemployment rate over 10 percent.
Hodges said mandates can be a burden to business, but also a benefit because they eliminate the competitive advantage of a company that has lower labor costs by not providing health insurance.
Chris Thornberg, an economic consultant, said the mandates amount to a “tax on business” that will be initially painful, but “in the long run it will work out.”
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