Uninsured Angst Rises as $1,000 Premiums Loom on Ruling

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The "Contemplation of Justice" statue sits in front of the Supreme Court building in Washington, D.C.

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Photographer: Andrew Harrer/Bloomberg

The "Contemplation of Justice" statue sits in front of the Supreme Court building in Washington, D.C. Close

The "Contemplation of Justice" statue sits in front of the Supreme Court building in Washington, D.C.

Photographer: Gary Fabiano/Pool via Bloomberg

U.S. President Barack Obama signs the Health Care and Education Reconciliation Act of 2010 at Northern Virginia Community College with House Speaker Nancy Pelosi, a California Democrat at right in Arlington, Virginia. Close

U.S. President Barack Obama signs the Health Care and Education Reconciliation Act of 2010 at Northern Virginia... Read More

Source: Frantz Ward LLP via Bloomberg

Keith Ashmus, a partner at Cleveland law firm Frantz Ward LLP, said the health law has raised costs for his business while not doing enough to tackle rising health-care costs in the U.S. Close

Keith Ashmus, a partner at Cleveland law firm Frantz Ward LLP, said the health law has raised costs for his business... Read More

Photographer: Darryl Fossa/Aventine Co. via Bloomberg

Barbara Kornblau, seen in this photo, has an adult daughter on her insurance, as the 26-year-old couldn't get insurance on her own due to pre-existing conditions. Close

Barbara Kornblau, seen in this photo, has an adult daughter on her insurance, as the 26-year-old couldn't get... Read More

Barack Obama’s political fortunes may hang on the U.S. Supreme Court’s view of his health-care law. For Joy Waldon, the stakes add up to a quarter of her paycheck and some peace of mind.

A heart defect and a history of melanoma make it imperative for the 56-year-old New Yorker to find an insurance plan to replace coverage that runs out at the end of June. With the best option so far costing $1,000 a month, Waldon says her hope lies in the health law’s subsidies, online marketplaces and other benefits that are supposed to kick in by 2014.

“I would be devastated, quite honestly, if the law was thrown out,” said Waldon, an office manager who pays $700 a month in premiums because her employer doesn’t offer insurance. “It isn’t even like people talk about any alternatives to the law. They just want to deny us the right to it.”

The 2010 law set in motion a contentious transformation of health care to a system that guarantees cheaper services for some, while imposing greater costs on others, a balancing act meant to assist the 16 percent of the U.S. population who have no insurance. Whether it’s Sarah Adkins, an underemployed 25- year-old in Kentucky, or Barbara Kornblau, a Virginia mother whose daughter is insured through the act’s high-risk pools, the Supreme Court’s impending ruling is touching a nerve.

“The thought that those nine justices will be determining this -- this is a person’s life we’re talking about,” said Kornblau, whose 26-year-old daughter couldn’t get insurance on her own because of pre-existing medical conditions. “This isn’t like a search-and-seizure case where I don’t have to worry about it because I don’t get arrested. This is very personal.”

Surgical Approach

Her angst and the fate of Obama’s $1.1 trillion overhaul rest with the nine members of the Supreme Court who will rule this month on whether key parts of the law are constitutional. As many as 33 million people are poised to gain coverage under the law starting in 2014, according to the Congressional Budget Office. Measures that cut drug costs for seniors, cover children with pre-existing illnesses and let young adults stay on their parents’ plans already are being implemented.

“Fifty million people don’t have health coverage in the U.S. and there are provisions that have already gone into effect,” said Sara Collins, a vice president for affordable health insurance in Washington with the Commonwealth Fund, a research group that supported the law. “If those were to go away, it would be very noticeable for a lot of people.”

Rebuilding Effort

The number of people without health insurance swelled to 49.9 million in 2010, just more than 16 percent of the U.S. population, from 36.6 million, or 13 percent, in 2000, according to Census Bureau data. The percentage of people covered through their jobs decreased to 55.3 percent from 65.1 percent in 2000.

“I have not seen a court case in my lifetime that has this much import,” said Peter Newell, health insurance project director at the United Hospital Fund, a New York-based philanthropy that studies the health system. “If the court strikes down all or even part of it, you just wonder how long it will be before our elected leaders can reach an agreement like this again.”

The court could let the law stand, overturn it in full or take a more surgical approach, removing the mandate that all Americans get coverage and related provisions requiring insurers to take all comers regardless of prior medical conditions. Traders on the online prediction market Intrade as of yesterday saw a 68 percent chance the court will strike down the mandate.

Insurer Pledges

The biggest U.S. health insurer, Minnetonka, Minnesota- based UnitedHealth Group Inc. (UNH), said this week it would honor some of the law’s features regardless of what the court does, including the young-adult coverage and a ban on lifetime benefit limits.

Some competitors, including Hartford, Connecticut-based Aetna Inc. (AET), said they’d follow suit. Others, including Indianapolis-based WellPoint Inc. (WLP), the second-biggest plan, said they hadn’t decided. None would commit to guaranteeing coverage for pre-existing conditions.

Republicans were unanimous in opposing the law when it passed through a Democratically controlled Congress in 2010. Now in charge of the House of Representatives, they are committed to a full repeal, House Speaker John Boehner, an Ohio Republican, said at a June 7 news conference. He declined to comment about whether the party would offer a replacement, saying only that his members favor a “step-by-step” approach.

Romney’s Plan

Mitt Romney, the presumptive Republican challenger to Obama in this year’s presidential election, said in a speech this week he’d repeal the law and replace it with tax breaks aimed at helping the private sector cover the uninsured. The plan wouldn’t mandate all Americans get insurance, unlike the system that Romney signed into law as governor of Massachusetts in 2006. It would be paid for with money diverted from Medicaid, the government program for the poor, he said.

For Waldon, the political infighting extends the uncertainty she’s faced for three years, since losing her job on the heels of the recession.

The U.K. native, who moved to the U.S. 28 years ago, is paying $700 a month through the federal Cobra program, which temporarily extends employer-sponsored benefits for workers who lose their jobs as long as they pay for the premiums themselves. It expires this month, and her new employer, a Manhattan dermatology clinic, can’t afford to cover her, she said.

A lapse in coverage could cost Waldon. While New York state law requires insurers to cover pre-existing conditions, it also allows carriers to deny claims for up to a year if a person has had a break in insurance.

Seeking Coverage

Waldon said she’s found plans available for about $300 in monthly premiums that would cover catastrophic care. For the more comprehensive coverage she wants, including prescription drugs and office checkups, she’d pay at least $1,000, almost as much as her monthly rent, she said. On her annual income of about $50,000, “I can’t afford it,” she said.

“There is a lack of understanding about the plight of people who can’t afford,” Waldon said. “People don’t realize they are only one accident away from losing everything.”

Waldon makes too much for the law’s premium tax credits, which start in 2014 for people making up to four times the federal poverty limit. She might be eligible for help with other out-of-pocket expenses, said Collins, of the Commonwealth Fund. And the mandate should bring younger, healthier people into the insurance pool, holding down premiums for all, she said.

The online marketplaces, or exchanges, will also make it easier for consumers to comparison-shop, Collins said.

Small Employers

The Congressional Budget Office estimated in 2009 that the proposed overhaul would lower costs as much as 59 percent for the 18 million people who buy their own insurance. For 134 million Americans covered through employers, the law is likely to have little effect on premiums, the CBO found.

As Waldon holds out for a Supreme Court ruling that would keep the law intact, Keith Ashmus, a lawyer at Frantz Ward LLP in Cleveland, says the Affordable Care Act has increased his firm’s insurance bill while doing little to tackle rising medical costs in the U.S. He’s not alone. More than two-thirds of those surveyed said they want the law overturned, according to a poll released June 7 by CBS News and the New York Times.

Requirements like coverage for young adults and ending benefit limits have added as much as $20,000 to the $700,000 in annual premiums paid by the firm, according to Ashmus, who calls himself a conservative Democrat and “reluctant opponent” of the law. He said his firm’s health plan, which includes deductibles of $5,000 to $10,000 to keep premiums down, may not meet the law’s standards for affordability. If so, the business may have to switch to a more expensive base plan.

Kidney Stones

“Mostly, the law’s just been a huge burden on small employers to figure out,” Ashmus said in a telephone interview. “I think more and more of them are just going to wash their hands of offering coverage.”

For Sarah Adkins of Louisville, Kentucky, the health law has been her lifeline. Since graduating with a graphic-arts degree in 2009, she has bounced between unemployment and jobs as a retail clerk, substitute teacher and T-shirt designer. None offered health insurance.

Adkins, who suffers from kidney stones, said she bought her own coverage, only to drop the plan after her insurer refused to pay $5,000 in medical bills from a 2010 hospitalization. The insurer said her kidney problems were a pre-existing condition.

“I already had $45,000 in student loans,” she said in a telephone interview. “I live at home with my parents, I’m trying very, very hard to find a job.”

Life’s Burden

Last year, the health law allowed her to buy into the plan of her father, an assembly-line worker. The move helped her nine days later when another kidney episode landed her in the emergency room. That coverage will run out in November, when Adkins turns 26, potentially sooner if the health law is overturned.

Adkins said she’s considering other options, from clinics for the indigent to hospitals that offer charity care.

“Come November, I really don’t know what I’m going to do,’” she said. “I have spent hours thinking about it. This is the great burden in my life right now.”

To contact the reporters on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net; Shannon Pettypiece in New York at spettypiece@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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