NC residents praise, pan new federal health care law as costs clarified

jmurawski@newsobserver.comOctober 1, 2013 

One customer said she was so upset she couldn’t talk and had to step outside to have a cry. Another rejoiced, saying she had been waiting for this moment for 35 years. Still another declared the Affordable Care Act a wash.

These are some of the early reactions in the Triangle to the provision of the health care law that helps people buy insurance. The law requires most Americans to buy insurance but provides federal subsidies to those whose incomes qualify.

The uninsured, as well as those who buy their own policies, were able to see for the first time Tuesday how much the plans would cost them and whether federal subsidies would offset those costs. Those who fail to get insured face penalties unless they qualify for hardship exemptions.

Triangle residents began applying for the policies even though the federal government’s enrollment website, www.healthcare.gov, experienced glitches, delaying the processing of application forms. Similar problems were found across the country as millions of people went online to get information about the new coverage offerings. North Carolina residents are shopping in an online insurance marketplace managed by the federal government because the state chose not to set up its own health care exchange.

On the first day the federal marketplace opened, Blue Cross and Blue Shield, the state’s biggest insurer, signed up about 200 people for subsidized coverage and provided 20,000 insurance quotes for potential customers online. The completed applications are ready to go and will be processed as soon as the computer glitches are fixed.

About 50 people stopped by the Blue Cross kiosk at Northgate Mall in Durham, and nearly 70 either stopped by or called the company’s Morrisville store for details on the new policies.

North Carolina residents also explored their options through independent insurance agents as well as through trained “navigators” at social service organizations throughout the state.

A steady stream of customers passed through the storefront in Morrisville, one of seven such stores Blue Cross is opening across the state to begin enrolling people under the Affordable Care Act. Some customers spent more than an hour talking to independent agents staffing the store, and many said afterward they still don’t have enough information to make a decision.

The plans differ not only in the cost of monthly premiums, but also in co-pays and deductibles, as well as in which doctors they include and which medications they cover.

“It’s overwhelming,” said Jeannette Conley of Morrisville. “The variables make it difficult to make a decision because it’s hard to line up everything that you need so that it’s cost-effective, you get the doctors you want and you get the prescriptions you need.”

More than a million people in North Carolina are expected to shop for individual policies through the six-month enrollment period, which ends March 31. Those who already have coverage – through an employer, Medicare or Medicaid – don’t have to make any changes at this time.

Only two insurers are selling subsidized policies in the state for 2014 – Blue Cross and Coventry Health Care of the Carolinas. Blue Cross is selling 26 policies in all 100 counties, but not every policy in every county, while Coventry has 25 policies in 39 counties, including Wake, Durham and Chatham.

Blue Cross has been warning customers to expect significant cost increases, and blamed the requirements of the Affordable Care Act for the rate inflation. The company has been sending out notices to existing customers with alerts that their rates could double and triple unless they’re offset by subsidies for those who qualify.

Blue Cross estimates that even with subsidies factored in, a third of the company’s North Carolina customers will see a substantial increase in health insurance costs.

Conley’s monthly premium, for example, will go up from $266 to $582, but she expects to end up paying $274 a month after subsidies are factored in. Conley, who lives in Cary and is unemployed, is still several years away from Medicare eligibility. She pays for coverage from savings and from her 401(k) retirement account.

“I wouldn’t be able to afford this if I didn’t get a subsidy,” she said. “If you’re eligible for the subsidy, you might come out better. But the people who fall through the cracks may not be able to afford this.”

North Carolina’s rates for health plans compliant with the Affordable Care Act are above the national average – a fact that the new law’s advocates attribute to the lack of competition here, while critics say it exposes the government-mandated terms and restrictions of the law that imposes onerous requirements.

Customer Debbie Paryz reacted with sticker shock and anger to the new policies when she got her preview at the Blue Cross store in Morrisville. The Cary resident and longtime Blue Cross customer has a 10-year-old son with leukemia and expects to max out on her deductible next year for her son’s cancer treatment.

Paryz and her husband are physical therapists who work for small employers that don’t provide health insurance. She said that even though her family will qualify for subsidies, they will end up paying almost twice as much under plans mandated by the Affordable Care Act.

“I’ve been crying the last 24 hours,” Paryz said. “I spent the entire night looking for other jobs with companies that provide benefits to their employees.”

As a consequence of increased Blue Cross rates, she said, her family’s healthcare bill will increase from $11,930 this year to $22,780 next year. She lays the blame squarely on the Affordable Care Act, saying she’s being forced to subsidize insurance for others.

“You are rewarding those who do not contribute,” Paryz said. “You are subsidizing those who do not pay into the system.”

Dawud Montague, 33, has gone without insurance for three years and would like to keep it that way.

“I’m a healthy American,” he said during a visit to the Blue Cross kiosk in Durham. “I realize that it’s cheaper for me to pay for (doctor’s) visits.”

With regular check-ups, he estimates that his medical bills run from $500 to $800 per year, or about $67 a month. The owner of a heating and air-conditioning contracting company in Durham, Montague doesn’t have kids, and it will cost a fortune to add himself to his wife’s employer policy, he said.

Montague expects the Affordable Care Act will disrupt his contentedly uninsured status.

“It wasn’t a part of my plan," he said. “For someone to come in and readjust your whole life, … it changes the game.”

The Affordable Care Act makes it illegal for an insurer to turn down customers with pre-existing conditions, to charge women more than men, and to charge older people more than three times the rates paid by younger customers. The law includes maternity coverage in all policies, whereas in the past such coverage typically had to be purchased as an extra rider on the policy.

“The truth of the matter is, this is not ready for rollout,” said Chris Marie Farr, acting North Carolina director for Americans for Prosperity. “Only having two insurance carriers on the exchange – that’s a problem in itself. There are not enough choices and too many mandates.”

Adam Linker, a policy analyst with the N.C. Justice Center, said the limited competition is largely caused by North Carolina’s decision not to participate in the insurance marketplace and not to extend Medicaid.

States that have embraced the health law typically have a half-dozen or more insurers involved in their insurance marketplaces.

“When we get some competition, it’s going to be better,” said Pam Brennan, a Cary resident who has individual insurance through Blue Cross. “2015 will be a better year than 2014.”

Brennan, a stay-at-home wife, and her husband, a contractor who works at the Shearon Harris nuclear plant, paid about $25,000 for healthcare last year, largely to cover the costs of her husband’s diabetes treatment.

After consulting with an agent at the Blue Cross store, she said the Affordable Care Act could bring down her family’s annual healthcare bill to as little as $16,000 a year.

She said the new law benefits her because it prohibits insurers from charging extra for pre-existing conditions, such as her husband’s diabetes, which requires the daily use of a $7,500 pump that must be replaced every several years.

“I’m not looking for a free ride, but we’ve paid more than our fair share for 35 years,” she said. “We’ve even thought of moving out of the country.”

Staff writer Andrew Kenney contributed.

Murawski: 919-829-8932

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