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While state GOP leaders rail against it, the federal health insurance law signed by President Barack Obama last year is increasingly changing care and costs for many Texans.
Since Jan. 1, as a result of the law, tens of thousands of retirees and disabled people on Medicare have received free preventive care — and partial relief from a “doughnut hole” that’s a big financial hit if they have high drug costs. Last year, nearly a quarter-million Texans received doughnut hole rebates of $250 per person.
Through May, about 1,800 Texans with chronic illnesses and conditions had bought coverage through a high-risk pool that the federal government started last year.
About 15 percent of the state’s nearly 1.1 million people between ages 19 and 25 have gained coverage, federal health officials estimated last week. The law requires that young adults up to age 26 be able to stay on their parents’ policies.
And 1.6 million Texas children with pre-existing conditions can no longer be denied private coverage, though neither state nor federal agencies could estimate how many have gained from the provision.
Republicans say the law is too costly, and dozens of states, including Texas, are challenging it in court, chiefly by arguing that its mandate that all Americans have health insurance is unconstitutional. There have been conflicting federal court rulings on the law, and legal experts expect that the U.S. Supreme Court will ultimately settle the issue.
Also, the GOP-controlled U.S. House has voted to repeal the law and wants to cut off funding, while Obama has vowed to block any major changes.
Texas supporters say the health care system has long suffered from bloated costs and perverse incentives that lead to wasteful duplication of treatments and wrongful denial of insurance applicants, and the new law is a long overdue fix in a state with millions of uninsured residents.
“The bill is already helping Texans, and it will bring down costs and help stimulate the economy and reduce the deficit,” said Melissa Cubria, who follows the private health insurance market for Texas Public Interest Research Group, a consumer advocacy group.
Opponents say the expanded coverage is illusory, predicting that many companies will drop coverage for employees rather than play under new rules that take effect in 2014.
They also see Congress rolling back plans to spend more, starting in 2014, to add millions of adults to the Medicaid program for the poor and to fork over subsidies for low- to moderate-income people to buy policies from state “health insurance exchanges.”
Former state Rep. Arlene Wohlgemuth, R-Burleson, said the law has sprinkled in a few new Medicare benefits and insurance protections, but that won’t ease public doubts.
“Those things are very small compared with things like losing your [employer-provided] insurance, going into a government program and about 25 percent of the nation’s population being in Medicaid,” said Wohlgemuth, the top health policy analyst at the free-market-oriented Texas Public Policy Foundation. “When folks find out things like that, all the doughnut hole fixes in the world aren’t going to fix that.”
Texas leaders haven’t followed the lead of states such as Oregon and Vermont in eagerly preparing for the overhaul. But nor have they joined GOP-run states such as Florida, which has rejected all assistance offered to the states.
Gov. Rick Perry, who announced on Saturday that he’s running for president, has laid down two markers of hostility.
Last year, he refused to have Texas run the law’s new, temporary high-risk pool for the chronically ill. The U.S. Department of Health and Human Services stepped in and launched the Pre-Existing Condition Insurance Plan.
This year, Perry’s opposition helped kill a Republican House member’s bill to set up a state-run health insurance exchange.
Again, the federal agency may have to intervene.
Still, Texas has received about $45 million under the law, grants for everything from abstinence-based sex education ($5.4 million) to beefing up the state insurance department’s ability to question health insurers’ unusually high rate hikes ($1 million). An additional $34 million of “therapeutic discovery” grants and tax credits have flowed to Texas biotech firms.
$276M in incentives
More than 200 local governments and large corporations — including AT&T , American Airlines , Southwest Airlines and Texas Instruments — have already accepted $276 million offered under the law as reinsurance, or an incentive that helps them keep offering affordable health coverage to early retirees.
“The revenues … have helped mitigate cost increases to that population,” said Dallas City Hall spokesman Frank Librio.
The city and Dallas County, along with the North Texas Tollway Authority, Collin County and most of its major cities are among nearly 30 local governments or entities that have successfully applied for the subsidies for their early retirees.
Supporters of the law say Texas, which has the highest share of its people uninsured, stands to gain from the push to give 34 million more Americans coverage by 2021.
They say all demographic groups will benefit from the law’s emphasis on preventive care, including the Obama administration’s recent ruling that birth control should be covered with no co-payments or deductibles starting a year from now.
Consumer advocate Cubria said that in 2014, people who have been rejected for insurance or priced out of the market will have new peace of mind and can begin taking new jobs or starting businesses without worrying about coverage. In the exchanges, people with incomes less than four times the poverty level could qualify for some amount of help in buying private insurance. For a family of three, the limit would be about $74,000.
“The most exciting and best things are still to come,” Cubria said.
Congressional budget analysts project that the law will reduce the federal deficit over the next decade. Opponents, though, see a huge flaw that could balloon costs down the road: The law doesn’t give the millions of newly covered people any financial “skin in the game,” or reasons to manage and save on their health care costs.
When people are worried about the national debt, expanding the Medicaid entitlement and creating new obligations on exchange subsidies will break the bank, Wohlgemuth and other critics say.
“The choices in the long run are going to be to abandon the program or to ration care because people already know that Medicare and Medicaid aren’t sustainable,” she said.
The federal overhaul of health care signed into law by President Barack Obama on March 23, 2010, postpones its most sweeping provisions until 2014. But Democratic authors added provisions that have already taken effect, or soon will, for people on Medicare and Medicaid and people seeking private insurance coverage. The details:
Known numbers of Texans who have participated:
221,000: Seniors and disabled people on Medicare with high prescription drug costs who got $250 rebate checks last year.
53,000: Medicare recipients with high drug costs who this year saved an average of $556 each from new 50 percent discounts on brand-name drugs.
73,000: Medicare recipients who this year received a wellness visit or preventive screenings, tests or shots for free.
1,800: Texans with chronic health conditions who enrolled as of May 31 in a new federally managed high-risk pool.
Estimates of how many Texans benefit from other provisions:
149,000: Young adults who could gain coverage because children under 26 may now stay on parents’ policies.
1.6 million: Children who cannot be denied private insurance coverage because of pre-existing health conditions.
1.2 million: Texans who are covered by plans bought in the “individual” insurance market and can’t be dropped for making a minor error on applications.
Funds gained in Texas:
$276 million: Federal funds sent through March to 207 employers, public and private, to help them retain fast-vanishing coverage for early retirees.
$79 million: Dozens of grants and tax credits to state and private entities for improving health care or health insurance regulation.
SOURCES: U.S. Department of Health and Human Services; Texas Department of Insurance; Texas Health and Human Services Commission; YoungInvincibles.org; Dallas Morning News research
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