Navigating the health care maze

YAKIMA, Wash. -- She's counting the months until she turns 65 and is eligible for Medicare, the government program that gives seniors access to medical care.

The former retail grocery clerk hasn't had health care insurance since
her last job, more than six years ago.

The 63-year-old unemployed Yakima resident asked not to be named because "it's embarrassing to be in this situation."

"I've always been relatively healthy," she said.

She needs to see a dentist because her dentures don't fit. But her unemployment insurance just ran out, which means she's losing $500 a month in income.

The woman considered -- briefly -- seeking health coverage as an individual from one of several companies that offer such insurance in the state. But at $300 a month, the premium was too expensive.

"When you're on a fixed income, you can't afford $300 a month," she said.

John Place, 60, is in the same position. He just lost his job as an auto mechanic, where he had health insurance. (He paid half the premium through a payroll deduction.)

To get on his wife's plan through her job at a fruit warehouse, they'd have to cough up $400 a month and prepare to spend a $2,500 deductible.

"We can't afford it," Place said. "If something major happens, we're done."

Finding a bargain on health insurance is no easy task in any economic climate. Even people with employer-sponsored coverage are feeling the pinch as out-of-pocket expenses climb.

In 2007, adults with employer coverage faced an average of $729 annually in out-of-pocket costs for medical services, including deductibles and other forms of cost sharing such as co-payments and coinsurance, according to the Commonwealth Group.

That represents a 34 percent increase from 2004, when the average out-of-pocket burden was $545.

When you're unemployed and your benefits have expired -- including federal subsidies to continue employer-sponsored health care -- finding affordable health coverage is especially difficult, indeed impossible for many people as demonstrated by the high rate of uninsured people nationally.

Many experts agree that while the U.S. health care system does a relatively good job of taking care of the old through Medicare and the poor through Medicaid, options for people in the middle are few and far between.

But there are some choices for consumers, including individual insurance plans and so-called discount health plans, which are not insurance. And there's good old-fashioned bargaining.

Policy experts debate whether those options are viable, but they do exist.

"What's important is that people know their options and can make informed, intelligent decisions," said David Hagen, an insurance agent based in Yakima.

While Hagen's bread and butter is selling insurance company products -- they pay him -- he does not charge individuals any fees for his consulting service.

"Health care is expensive and when it's done wrong, that's when we hear stories about how claims were denied, coverage rescinded or other horror stories, which of course makes people mad," he said.

Hagen said the hands-down best option for someone who's just been laid off from a job where they had coverage are benefits under the American Recovery and Reinvestment Act of 2009, also known as the stimulus bill.

This federal legislation provides individuals with a 65 percent subsidy for health insurance premiums under COBRA. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, which allows people to continue their employer-provided coverage when they're between jobs.

Without the COBRA subsidy, the monthly cost of continuing coverage could exceed $1,000.

But COBRA lasts only nine months, and it's not clear yet whether the federal government will continue the subsidy.

That leaves the individual market.

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In Yakima County, seven companies sell plans to individuals.

A handy way to compare the plans by price is to visit www.ehealthinsurance.com, an online tool sponsored by the insurance industry.

A 60-year-old nonsmoking male could choose among a bare-bones plan for $194 a month or one offering more comprehensive coverage at $429.

That's the easy part.

The real homework comes in reading and understanding the fine print, starting with "Important Notices and Disclaimers" on the www.ehealthinsurance.com site. This is a primer on what to look for when you get the plan contract. The rates quoted, for instance, are subject to change and companies won't guarantee the availability of a certain medical provider.

The homework gets even more detailed when you read the plan contract sent by the insurance company.

One of the most important caveats when considering a private plan is the dreaded pre-existing condition waiting period, something Democrats in Congress want to do away with.

Individual plans may require a nine-month wait if you were treated for anything in the previous six months. But if you had a prior plan that was equal or better than the new one, the insurer must credit your time in the old plan toward the nine months.

For example, if you had six months of coverage, that would leave you with a three-month waiting period.

The restrictions are meant to keep the private insurance market healthy, said Eric Earling, spokesman for Premera Blue Cross, which offers Lifewise individual plans through an affiliate.

He concedes that the individual market is getting a bad rap in the current debate over health care reform. But Earling said that Washington state, because of legislation adopted nine years ago, provides more consumer protection than most other states.

For example, while some states are allowed to continue to price plans based on a person's gender, such practices are prohibited here.

But Don Hinman, a long-time insurance agent in Yakima, said individual plans remain too expensive for most people.

"There is a lot of competition in the individual market, but fundamentally you've got to have enough disposable income to afford them," Hinman said.

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With insurance premiums skyrocketing for many plans offered in the individual market, discount health plans, which are membership organizations, are one alternative.

They charge a fee for a list of providers who will give "customers" a price break on services and health care products.

Insurance Commissioner Mike Kreidler's office said discount plans have been relatively unregulated since they began appearing in 2003. His office has received more than 400 calls since then from consumers complaining that they were misled about plans offering substantial savings.

To try to rein in the false marketing, the 2009 Legislature passed a law requiring that discount plans disclose to consumers how they work and where the discount can be used.

If you have neither insurance nor a discount plan but find yourself in need of treatment from your long-time family doctor, experts say don't rule out talking directly to him or her about your financial situation and offering to pay cash upfront.

Hospitals, too, are often willing to negotiate. Berniece Thornton, manager of business services at Yakima Valley Memorial Hospital, said the billing department has noticed more people in need of payment arrangements.

"We are seeing higher deductibles and out-of-pocket expenses these days," Thornton said. "Many people need to make payments."

Memorial, a nonprofit, doesn't charge interest but does request that the full cost be repaid in six months. There may even be a grace period after that.

"If that's too much, we're flexible."

Though the hospital ends up sending some accounts to collection agencies, Thornton said most people sincerely want to pay their medical bills.

"Nobody wants to incur a medical debt. Often, it's not planned."

* Leah Beth Ward can be reached at 509-577-7626 or lward@yakimaherald.com.

One example

In Yakima, a family of four where the father is 40, the mother is 39, neither smoke, and they have two kids ages 7 and 3, could pay anywhere from $227 a month for bare-bones catastrophic coverage to $641 a month.

The higher-cost plan provides more coverage for preventive care and prescription drugs, but the annual out-of-pocket limit is $18,000. Plus, every office visit costs $30 and you'll share in another 30 percent of the cost with the provider.

Source: www.ehealthinsurance.com

Finding health insurance

Before buying health insurance in the individual market, consider your eligibility for less-expensive options, including:

* Apple Health for Kids. A federal- and state-funded program covering children under age 19 in families with limited income. Call 877-543-7669.

* Breast and cervical cancer treatment coverage. Screening, diagnosis and treatment for women without insurance. Call 888-438-2247.

* Community health centers. Care offered on a sliding scale. Call Yakima Neighborhood Health, 509-454-4143; Yakima Valley Farm Workers Clinic (numerous clinics in Yakima and the Lower Valley), 509-865-5898; and Community Health of Central Washington, 509-494-6700.

* Prescription drug cards. The Washington Prescription Drug Program is similar to a grocery store club card where discounts are taken off at the point of sale. It's free to every state resident. Visit www.rx.wa.gov/discountcard.html.

* Negotiate with your doctor. Many physicians will accept cash if you work out an arrangement ahead of time.

* For seniors needing help with coverage, contact SHIBA (State Health Insurance Benefits Advisors). In Yakima, call 509-574-1934.

If your only alternative is an individual plan, be sure to check out "Shopping for Individual Health Care Coverage," a handy guidebook published by Mike Kreidler, the Washington State Insurance Commissioner.

Here are a few tips from that guide:

* You may have to fill out a lengthy questionnaire that might put you into the high-risk state pool. You can still get coverage, but it will be more expensive than even private plans. If you've had an organ transplant, for instance, you're going to be in the pool.

* Individual plans might require a nine-month waiting period for any condition you've been treated for in the previous six months, high blood pressure for instance. But if you've had "creditable" coverage -- that is, a standard and not catastrophic plan for the prior 18 months -- the waiting period cannot be imposed.

Other contacts

* State Insurance Consumer Hotline: 800-562-6900

* Department of Veterans Administration: 877-222-8387