Tomorrow: Worries about health care overhaul from a large employer.
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PAW PAW, W.Va. -- For 13 years, Susan Corbin has run the cash register, made hoagies and swept the floor at the Stony Creek Country Store near Paw Paw. "Everyone comes through, sooner or later," she said. "They come in for a pop and stay to talk."
People can pick up a used paperback, a market bulletin, snacks, hunting gear. "We're always thinking of ways to bring in a few more dollars," she said recently.
She has tried hard to follow the health-care overhaul. "I want it, but I'm afraid of it," she said.
"They're still arguing about it in Washington, and I know it affects me, but I can't find out what it's going to be."
She had heard talk about a "public option." But, like most people, she did not know that, under the House and Senate plans:
"And that's just part of it," said Perry Bryant, director of West Virginians for Affordable Health Care, looking at the list. "There is so much in this that's good for West Virginia."
A House-Senate conference, including Sen. Jay Rockefeller, D-W.Va., will meet soon to iron out differences between the House and Senate bills, then Congress will vote on one bill.
In West Virginia, at least 177,000 uninsured West Virginians would be newly insured, according to advocacy group Families USA. "That's a huge number of people," Bryant said. "Hospitals will have a lot less uncompensated care, and that's good for everybody."
At this point, according to Mountain State Blue Cross Blue Shield, about $1,000 of the average person's policy pays for care for people who have no insurance.
Play or pay
Here's the part that scares Susan Corbin and her boss: Every American would be required to have health insurance or pay a fine.
Corbin has heard worrisome rumors. "We heard they'd fine my boss if he doesn't give me health insurance," she said, "and they'll fine me if I don't take it. That worries me a lot.
"My boss is the greatest guy in the world," she said. "He'd offer me health insurance if he possibly could, but he can't afford any himself. If he had to buy insurance for me, I don't know if he could afford to keep me on."
She doesn't need to worry about that, Bryant said. "Nobody plans to make small business owners provide insurance."
Under the House bill, only businesses with a payroll of $500,000 or more must provide insurance or pay a small fine. Under the Senate bill, a business with 50 or more employees is fined for every employee who gets government-subsidized insurance. Existing plans are grandfathered.
"Small business and individuals are winners in these health care packages," Bryant said.
Small business owners now pay 18 percent more for insurance than large businesses do. Under health reform, they can pool together to get lower rates and get a tax credit of 50 percent to help pay employee premiums.
Individuals who make up to $43,000 and families with incomes of up to $88,000 could get lower subsidized premiums.
People with higher incomes might pay more in the future, Bryant said, but if Congress did nothing, they would be guaranteed to pay more.
The cost of employer-based insurance more than doubled between 1999 and 2008, and would double again by 2020 under the current system, according to a Commonwealth Fund study.
"Everybody will pay a lot more if nothing is done," Bryant said, "and millions more will lose insurance by 2019."
Stacked against individuals
If Susan Corbin were to try to buy a basic policy today, she would have to apply as an individual.
Individuals now pay the highest prices on the market, said Tom Kasey of Charleston's Silverstein Maddox Wallace insurance agency. Prices for individuals "are all over the map, with no rhyme or reason," he said.
If a 40-year-old in Kanawha County tries to get an individual policy with a $500 deductible today, Kasey said, "she could easily pay [monthly premiums] from $350 to $500. If she had a medical problem, it could easily go over $600," he said.
"That's a basic weakness in the system," said Chris Plein, who directs the public administration program at West Virginia University. Individuals pay more because they are not in a "pool" with others and have no collective buying power, he said. To have lower rates, a pool must also contain healthy people. A big pool of sick people will not have low premiums.
That's a major reason why everyone is required to buy insurance, he said.
Susan Corbin and millions of other individuals and small business owners would have three new ways to get lower-cost insurance, under both bills:
"Emergency rooms wouldn't be packed with uninsured people trying to get routine care," said Renate Pore, health policy analyst for the center.
"This is cost containment," she said. It affects the cost of everyone's health care, she said, because hospitals pass much of the cost of uncompensated care to paying customers' bills.
In West Virginia, the amount of charity care went up 75 percent between 2006 and 2008, to $231 million, according to the West Virginia Health Care Authority.
Will people sign up?
Fred Early, CEO of Mountain State Blue Cross/Blue Shield, sees a fatal flaw in both bills.
Consumers can choose a fourth option, he points out: Don't buy insurance and pay the penalty instead.
"A lot of people will not buy in because the penalty is so low," he said. That could torpedo the whole effort, he says.
Under health reform, insurance companies will be required to accept people who have pre-existing conditions, which will involve a lot of expense. The millions of new customers were expected to counterbalance that expense and keep the pool healthy. The insurance companies will get the subsidies.
But under the House bill, the penalty for not signing up is only $95 the first year. It goes up gradually each year until it reaches $750. There will be hardship exemptions.
"If I'm in my late 20s and single and healthy and I have a choice of buying a policy that's going to cost me several thousand a year or to paying a penalty of a maximum of $750 a year, understanding that if I get sick, I can go right out and buy a policy without any waiting period," Early said, "I'm going to pay my penalty and spend my several thousand on a nice trip or a car till I do get sick and need the coverage."
If that happens, he believes, "It will force everyone's premiums to go up." If insurers pay out more than they take in, he said, they must raise premiums.
The Senate penalty is 2 percent of income - still low, in Early's view.
Under the reform bills, people can sign up for insurance with little or no waiting period. "That's crazy," Early said. "It's like saying people can take out a home insurance policy when the house is on fire."
Insurers must collect premiums when people are well, he said, to pay benefits when people are sick. "It's a huge shift into adverse rates to be absorbed into the pool. We're still trying to get a handle on that."
Blue Cross puts 88 cents of every dollar into health care benefits, Early said. But some national companies pay out as low as 65 cents on the dollar, according to the state insurance commission. Congress will require them to pay out 80 to 85 cents.
How would it work?
In 2013 or 2014, a new "exchange" would open on the Internet. "That means we have three to four years to get ready and work out problems," WVU's Plein said.
After it opens, Susan Corbin - and any individual buyer - could log onto the exchange Web site and compare policies and prices, find out if she was eligible for subsidies, and sign up for insurance.
To be listed, insurance policies would have to cover doctor visits, hospitalization, maternity and newborn care, prescriptions and wellness services, and pediatric care that includes vision and dental.
MIT economist Jonathan Gruber analyzed the way the exchange and subsidies might work under the House bill. Using Congressional Budget Office statistics on "typical" policies, he calculated examples.
A "typical" 40-year-old individual saves an average of 30 percent, he found. Exact prices will vary from state to state, but discounts range from around 5 percent to 84 percent.
Two examples, using CBO "typical" prices:
For three years, Massachusetts has offered similar subsidies through an exchange. Individual premiums dropped 40 percent while they went up 14 percent nationwide, Gruber found.
In the Senate version, each state would create its own exchange. In the House version, the exchange is national.
The "public option," the government-run program, if there was one, would be listed along with commercial plans. "I'm disappointed if it's not there, Bryant said, but I also know how much good this bill does for millions of people."