31 May 2010

Federal Health Care Reform begins to Shape Consumer Options

Mercury News

SANTA CRUZ - Drew Miller, who works out of a small office on Pacific Avenue, has been helping local residents get health insurance for 30 years.

This year, he's had to advise people of some changes.

Though reforms in the much-hyped federal health care legislation won't unfold fully until the end of the decade, young adults, small businesses and Medicare recipients can benefit as soon as this summer, and already people are shopping for better care.

"Most clients are asking about this. It concerns them," said Miller of Drew Miller Insurance Services.

The changes arriving this year, which Miller and other brokers have begun telling clients about, allow people 26 years old and younger to get insurance on their parents' plans; owners of small businesses to qualify for a tax credit if they provide insurance to employees; and Medicare recipients to get a $250 rebate when they pay expenses in the so-called "doughnut hole," the range where federal coverage lapses.

"Most of the significant changes are still years off, but there are changes (now)," Miller said.

A county report released last week, the most detailed yet on how the federal legislation will play out locally, anticipates that 34,000 of the county's currently 44,000 uninsured will be covered by 2018. The gains will begin this year, the report confirms.

Most notable is the provision, effective in September, that permits children to remain on their parents' health insurance plan until age 26. The change provides new options for an unspecified number of young adults, including those attending UC Santa Cruz and Cabrillo College.

"As you know, kids launch a little later these days," said Rama Khalsa, director of the county Health Services Agency and chief author of the recent county report. "And yes, people get sick in their 20s."

Beyond extending family plans to older children, insurance companies this year will be prohibited from setting annual and lifetime limits on coverage as well as excluding coverage for children with pre-existing conditions.

Adults with pre-existing conditions who are denied coverage may qualify for a yet-to-be-established "high-risk" insurance pool offered by the state. Otherwise, they'll have to wait for the creation of the proposed health care exchanges in 2014, when people will be able to competitively shop on a public marketplace for insurance.

The county report suggests as many as 17,600 local residents, driven by the pending requirement that everyone be insured, will opt for coverage on the exchanges. Federal subsidies will assist poor residents who choose this option.

The other major boon for uninsured county residents, according to the report, will also come in 2014 with the expansion of Medi-Cal, the jointly-run state and federal insurance program. Thousands are expected to be newly enrolled in the program locally.

According to Alan McKay, executive director of the Central Coast Alliance for Health, county residents are already benefiting from a directive by the federal government that prohibits states from reducing eligibility for insurance programs until federal plans are in place.

As the most immediate reforms unravel, state Assemblyman Bill Monning, D-Carmel, who was recently appointed chair of the Assembly Health Committee, has begun working out details of how the coming initiatives will take shape.

Among them are making sure enough medical facilities are in place to accommodate the surge in health care. The committee is eyeing a number of work force development programs, from new training options to low-coast loans for medical students.

"If you boost the number of Californians who are going to be eligible for coverage and seeking California health insurance quotes, there's going to be necessary growth in providers," Monning said.

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