Measuring the cost of health in Burbank

One Tuesday a month, Stephen Houlemard gets a ride to the Glendale Free Clinic, located on the second floor of the First United Methodist Church of Glendale, from a friend.

Houlemard, a Temple City resident, comes to the clinic to monitor the diseases — diabetes and Addison's disease, an adrenal gland disorder — he's suffered from for decades, and to pick up medication.

Houlemard's treatment, like that of all patients at the clinic, is paid for with grants from local hospitals and the effort of volunteers. But because he doesn't have health insurance, he is in a precarious state.

“I come here for their care, but if I run into a major problem and wind up in a hospital....” he said, his voice trailing off.

Houlemard, 59, won't qualify for Medicare for another six years. And because his income from the occasional odd job and $600 he receives in disability payments each month is too high, he doesn't qualify for the state's low-income coverage program, Medi-Cal.

The Affordable Care Act, or Obamacare, was designed in part for people like Houlemard. But the new law, the subject of a fight that led to a federal government shutdown that lifted only Thursday, will have an impact on Burbank’s uninsured population.

Proponents say increasing the ranks of the insured will, by definition, create healthier and more productive cities and neighborhoods. But the coverage is not free. Local businesses are concerned about the impact on their bottom lines, and individuals looking into purchasing insurance via online exchanges worry about the pinch on their wallets.

And many may see premiums rise, at least at first, a function of paying for the underinsured and uninsured.

Individual Impact

The ACA is composed of two laws that experts say comprise the most drastic change to the American healthcare system since Medicaid and Medicare were created in 1965.

The 2010 laws have already made an impact. Since 2010, insurance companies have been prohibited from denying coverage to people under the age of 19 with preexisting conditions, and children can stay on their parents' insurance up to the age of 26.

Further impacts were felt this month, as new online health insurance marketplaces, known as insurance exchanges, were launched nationwide among still-ongoing technical difficulties on Oct. 1.

These exchanges, including the California-specific, offer consumers the option of comparing different insurance providers' plans and purchasing coverage from one of several tiers, each of which mandates a different level of coverage.

Although Americans are free to purchase health plans outside of the exchanges, federal tax credits to offset the cost of coverage are available only for plans purchased in the exchanges.

The ACA also increases federal funding for state healthcare programs for low-income individuals, such as California's Medi-Cal.

Before Oct. 1, adults had to have a child or a disability, and also make less than the federal poverty level — $11,490 in 2013 — to qualify for the state-provided Medi-Cal coverage.

Now, California residents — not including ones not in this country legally — making 138% of the poverty level, or $15,856, will be eligible.

Locally, that means about 45,000 residents in the 43rd Assembly district, which includes Glendale, Burbank, La Cañada Flintridge and the La Crescenta-Montrose areas, will be eligible to join the Medi-Cal rolls, according to a 2012 UCLA study. The district also includes parts of the Los Angeles neighborhoods of Silver Lake, Los Feliz and Little Armenia.

That would bring the total Medi-Cal-eligible residents of the district to about 100,000.

The study also says that an additional 58,000 uninsured residents in the district will be eligible to buy health insurance through the exchange, with or without subsidies, according to 2009 data.

These measures will have an impact on communities like Burbank, though less than in surrounding communities, as a smaller share of Burbank’s population is currently uninsured — 15,150 people, or 14.6% of the city's 104,064 residents, according to the U.S. Census Bureau.

That percentage ranks below the roughly 18% of Glendale’s population that is uninsured, and is also below the L.A. County average of 22%.

But the law doesn't just offer new ways to get healthcare. It also includes the so-called “individual mandate,” which requires all citizens to have health insurance.

Starting Jan. 1, 2014, people without insurance will see a fee of $94 or 1% of their income, whichever is greater, on that year's taxes. Those amounts will increase each year until 2016, when the penalty will be $695 or 2.5% of income.

Also, next year individuals with preexisting conditions can no longer be legally denied coverage, regardless of their age.

Business Impact

Individuals aren't the only ones affected by the new laws. Businesses in Burbank are nervously anticipating new requirements for employer-provided healthcare.

The bulk of those effects won't be felt for at least another year, however, as the so-called “employer mandate,” in which businesses will be taxed for not providing healthcare options to their employees, won't kick in until Jan. 1, 2015.

Once the mandate does go into effect, businesses with 50 or more full-time employees will be required either to provide a health plan that meets federally mandated “minimum required value” guidelines or pay fees.

Under the law, full-time employees are those that work 30 hours or more. Part-time employees' hours will be summed and averaged as well, so that a company can't replace one full-time employee with two part-timers to escape the requirement.

For some workers in Burbank, the reform is already having an impact.

Sage Simmons, manager of Dine with 9 catering company in Sherman Oaks, which caters film, television and commercial shoots in Burbank, said that for freelance workers in the industry, the new exchanges are a boon.

“We do freelance production catering … so nobody is really getting any health unless they have a union,” she said. “I’ll probably switch over … a lot of people are looking into it.”

Businesses will be seeing their insurance bills go up even before the employer mandate goes into effect, say brokers, as insurance companies pass along the cost of the new taxes and fees levied upon them.

Scott Morsch, of Gallagher Benefit Services, a consulting firm that helps businesses prepare for the impacts of the new laws, said businesses can expect to see a 3.5 to 4% increase in the cost of their healthcare plans on top of the normal increase that often accompanies each year's renewal.

Morsch said part of that increase is coming from the 2.5% federal tax now being applied to healthcare insurance companies to help pay for the reform measures, the costs of which are being passed on by the insurance companies to consumers.

Morsch said that for most business owners, the new laws are going to have an economic cost.

“I think it is a net negative,” he said. “I think what they're seeing is in order to solve for the greater good, and that is to get uninsured people covered, there's going to be some expense with that.”

But one medical professional said it's important to take the long view. Mike Rembis, chief executive of Providence Saint Joseph Medical Center, said the law is about all parties — consumers, business-owners and healthcare providers — making some sacrifices.

“Without the legislation, we would see too many people go without preventive care … and people diagnosed with serious illness late in their illness,” which results in costlier care, he said.

“In the long-term, I think we'll see a healthier populations and a less costly healthcare bill for everyone.”

For his part, Houlemard said he will be evaluating his options, seeing if he's now eligible for Medi-Cal, or if he can get coverage on the exchange for less than $100 a month.

“Health insurance is hard to come by,” he said. “I'm starting the process.”

Reporter Joe Piasecki contributed to this story.


Follow Daniel Siegal on Google+ and on Twitter: @Daniel_Siegal.


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