NC health insurance enrollments lag for young, healthy people

jmurawski@newsobserver.comMarch 29, 2014 

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    North Carolina’s pool of eligible applicants for individual health insurance this year includes more than 1 million uninsured and close to half a million residents who previously had individual policies, totaling roughly 1.5 million people.

    The Patient Protection and Affordable Care Act requires most Americans to buy health coverage by March 31 unless they qualify for a hardship or other exemption. The enrollment deadline is extended beyond March 31 for those who began their application process in March but weren’t able to finish.

    Those who don’t make the application deadline this year won’t be able to enroll until Nov. 15, unless they have a major life event, such as marriage, divorce, the birth of a child or a move.

    Failure to enroll in 2014 carries a penalty of $95 or 1 percent of household income, whichever is bigger. The penalty, to be paid out of tax refunds, increases in subsequent years.

    The health care law provides federal subsidies, on a sliding scale, for those whose household incomes are between 100 and 400 percent of the federal poverty level – $11,490 to $45,960 for a single person and $23,550 to $94,200 for a family of four. Additional subsidies are available to those below 250 percent of the federal poverty level – $28,725 for an individual and $58,875 for a family of four – to offset the cost of deductibles, co-pays and co-insurance.

    To schedule an appointment with a trained navigator, call 855-726-2559 or go to http://healthcarencnow.org.

    To find an insurance agent, go to www.healthcarenc.org.

    To apply, go to www.healthcare.gov or call 800-318-2596.

Seth Beard sheepishly admits he’s a bit of a klutz, but buying health insurance didn’t make his priority list this year, even though it’s mandatory under the Affordable Care Act.

It’s been six years since Beard, a 29-year-old sales clerk at Sorry State Records, had health insurance, a fact attested by the lump of electrical tape holding his eyeglasses together. Beard toils 50-60 hours a week, holding down a second job as a cook at the Remedy Diner in Raleigh, and said that health insurance – even with generous subsidies – is beyond his $20,000 yearly pay.

Surrounded by vinyl punk rock albums at his sales counter and a pack of Camels bulging from his shirt pocket, Beard said he’s still chipping away at a $1,500 bill to Rex Hospital from his emergency room visit two years ago for a sprained ankle.

“Just the way my bills work, I couldn’t afford anything else,” Beard said. “I didn’t really look into it enough to think about planning for it.”

With a looming enrollment deadline of Monday for health insurance under the Affordable Care Act, it’s increasingly evident that the federal insurance program will fall short of enrollment goals in its first year. Most of the nation’s uninsured, whom the law was designed to help, will take a pass on health insurance and opt for penalties instead.

Through February, slightly more than 200,000 North Carolinians had selected an individual insurance plan out of an eligible pool exceeding 1 million residents. The number of March enrollments will be released soon.

Indifference, ignorance and financial anxiety are evident among younger and healthier residents on whom the law’s success depends. The young are being assiduously courted by Blue Cross and Blue Shield of North Carolina, the state’s biggest health insurer, in the organization’s “Live Fearless” marketing campaign.

Blue Cross needs younger customers – known in the insurance industry as young invincibles – to offset the costs of insuring older people who tend to have higher medical expenses. Blue Cross executives are also concerned about an imbalance of customers who have expensive pre-existing conditions – the ones who weren’t able to buy insurance until the Affordable Care Act made it illegal to turn them down.

But in North Carolina, only 25 percent of enrollments through the federal insurance exchange are in the 18-34 age group, even though 40 percent of the state’s uninsured are in that age group.

If North Carolina enrollments stay flat in March for this group, then insurance companies could pay out more money than they take in, and may raise rates next year, according to the Kaiser Family Foundation.

This under-representation is worrisome to health reform advocates.

“Let’s hope if you’re young and healthy you won’t have major medical expenses,” U.S. Rep. David Price, a Chapel Hill Democrat, said Monday after an event to promote enrollment. “But how reckless it is to assume that.”

As enrollments of younger people lag, the state’s well-organized networks of community health centers have attracted national attention for their effectiveness in signing up their low-income clients as well as other residents.

North Carolina has more than 600 trained navigators and in-person helpers working on outreach and enrollment for the Legal Aid Society, Alcohol and Drug Council, CapitalCare Collaborative, Community Care of North Carolina, and other social service organizations.

Through February, 91 percent of the state’s insurance enrollments have qualified for federal subsidies, pushing North Carolina to one of the top insurance enrollment rates in the country and also skewing the state to one of the highest rates for subsidies.

North Carolina ranks only behind Florida and California for premium subsidies awarded, with residents here qualifying for a total of $606 million through February. The average yearly subsidy awarded to North Carolina enrollees was $3,320, the 10th-highest in the country, according to an analysis issued Thursday by the Kaiser Family Foundation.

The low count of healthy residents on insurance rolls, combined with a high response rate among older residents, has put North Carolina on a course that shows “some troubling trends,” said Mark Fleming, vice president of government affairs at Blue Cross.

The Chapel Hill health care organization is already seeing higher reimbursement claims, especially for advanced imaging, medications and heart conditions, Fleming said at a legislative hearing this month.

“We’re concerned that we are not getting as many young people into the program as we would like,” Fleming said. “We’re worried about that trend.”

Blue Cross won’t disclose how many people it has signed up in the state until after the enrollment deadline. Blue Cross is one of only two insurers offering subsidized coverage in North Carolina and the only one operating in all 100 counties.

‘I feel more secure’

One of the company’s new customers is Kim Jones, 59, a substitute teacher in Wake County, who enrolled in January at an insurance fair at Urban Ministries’ Open Door Clinic. Jones had gone without health coverage for a decade and during that time developed numerous symptoms.

She has also accumulated a stack of WakeMed hospital bills totaling about $7,000, which she says she’s unable to pay on her annual wage of about $12,000 a year. Collection agencies are “harassing me like crazy,” she said.

Jones, who lives in Wake Forest with her elderly mother, is now paying $20.13 a month for a heavily subsidized Blue Cross policy that includes more than $500 a month in federal aid. This year she’s been making up for a decade of neglected medical attention, scheduling appointments with a gastroenterologist, endocrinologist and an orthopedic doctor.

She is receiving physical therapy and knee injections, and planning a colonoscopy as well as surgery for a benign tumor on her pituitary gland.

“I feel more secure,” Jones said. “I notice that the depression has lifted. I had gotten to the point where I just felt hopeless.”

The federal law requires most Americans to have health insurance. But since the majority get their coverage through work or through federal health programs – Medicaid for the poor, Medicare for the elderly or Tricare for military personnel – the residents who are immediately affected by the law are the uninsured and those who buy individual insurance. That’s roughly 1.5 million North Carolinians.

What’s unclear is how many people with individual policies simply migrated to subsidized coverage. Such switching wouldn’t have any effect on the state’s uninsured rolls.

“The question in the first year is: ‘Do we reduce our uninsured rate?’ ” said Adam Linker, health policy analyst for the N.C. Justice Center, a Raleigh public policy group. “Or are we giving consumer protections for people who already had insurance?”

Another wild card is how many enrollees will continue to pay their monthly premiums and how many will drop insurance in the coming months, said Donald Taylor, a Duke University professor of public policy and nursing.

“This is an experiment with no comparison,” Taylor said.

What could go wrong?

Among the uninsured is Michael Palcowski of Raleigh, 23, an assistant manager for a sub sandwich shop. He has had no health coverage for five years but said he carries dental and life insurance.

He’s nonchalant about health care costs, even though last year he required an ultrasound to examine the cause of groin pain that could have indicated a hernia or testicular cancer but turned out to be a strained muscle. Palcowski said the $5,300 cost was covered by financial assistance from an organization whose name he doesn’t recall.

“I don’t feel the need for health insurance,” he said. “I haven’t needed it so long.”

Instead, he’s saving for a down payment on a house and making car payments on his used Audi A3. His employer offers health coverage, but it would cost Palcowski $140 a month, a sum he said he can’t spare right now.

“If something medical comes along, I’ll deal with it when it happens,” he said.

Downtown Raleigh barista Larz Robison, 27, bikes more than 100 miles a week and has cruised without insurance since January. A resident of Raleigh, this young invincible feels at the top of his game – “I’m in my prime,” he says – and is casual about health coverage.

Even as he procrastinates, he acknowledges he should buy coverage because he knows he can’t dodge medical expenses forever.

“I probably will hurt myself, and I’d rather not pay everything,” Robison said. “Riding a bike, I know something is going to happen.”

Tanya Andrews is another member of the youth demographic, but at age 33, her risk tolerance is quickly fading. She and her husband, Matthew, are co-owners of the Yellow Dog Bread Co. in Raleigh and are thinking of starting a family.

The Andrewses have priced their insurance options, and she doesn’t know where they could come up with the $400 to $500 a month the pair would need for health coverage, which would be partially subsidized at their income level. The young bakers are likely to put off health insurance one more year.

“We don’t know what we’re going to do,” she said. “We are in our mid-30s and want to start a family at some point, and currently we’ve had to put our plans on hold.”

Her parents have signed up for coverage, Andrews said; meanwhile, she and her husband are stuck paying for medical and dental needs out of pocket whenever necessary.

“I feel like I’m at a point in my life where this is something you have to do,” she said. “It takes its toll physically and emotionally.”

Murawski: 919-829-8932

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