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Healthcare law hits home in complex ways

When the overhaul mixes with the variables of everyday life, things get complicated -- for the self-employed, small-business owner and senior.

April 18, 2010|By Sharon Bernstein, Ann M. Simmons and Nicole Santa Cruz
  • "I don't feel the government owes me anything. But maybe we could meet halfway," said Linda Marie McCullough of West Hollywood, a self-employed freelance artist. She could be eligible for government subsidies to buy health insurance down the road.
"I don't feel the government owes me anything. But maybe we could… (Kirk McKoy / Los Angeles…)

The health insurance overhaul signed into law last month has been billed as the most sweeping reform in generations.

And it is.

In broad strokes, the law provides tax credits for small businesses that offer health insurance, and subsidies for people who buy it for themselves. More people will be eligible for Medicaid, and insurers won't be able to charge more for those with preexisting conditions.

But when it comes down to how the law mixes with the variables of everyday life, things get complicated.

Take Linda Marie McCullough. The legislation was meant to put health insurance within reach of people just like her. But she might not be able to afford it, even with substantial subsidies.

For small-business owners like Pattiy and Steve Knox, there are tax rebates meant to take the sting out of group premiums. But will the help be too little, too late?

Sharon Velasquez, a hairdresser on Medicare, has pretty good coverage right now. If surgery pushes her into the so-called doughnut hole where prescription drug coverage cuts out, will the overhaul help her pay the bills?

Those are among the innumerable questions about the biggest change to U.S. healthcare in a generation.

The artist

Falling ill is something Linda Marie McCullough dares not think about.

The West Hollywood resident juggles several jobs, and she hasn't had health insurance for eight years.

"It's scary," she said. "I know I'm rolling the dice right now."

McCullough spent years as a working actress and model -- in the 1970s she appeared on "Welcome Back, Kotter" -- and, because this is Hollywood, she would rather not give her age.

These days, McCullough calls herself a self-employed freelance artist. She works a variety of jobs that include painting murals, housekeeping and photography.

McCullough last saw a doctor four years ago, about the last time she had a mammogram and gynecological exam.

One of her teeth needs a crown; she can feel the filling trying to pop out. But with her average monthly earnings ranging from $2,300 to $2,600, and her rent and living expenses topping $2,100 a month, McCullough said there was no way she could contemplate dental work.

"I just have to wait," she said.

It will be years before McCullough feels any effect from the healthcare overhaul, because the parts that apply to her don't kick in until 2014. And dental isn't covered anyway.

"Even then, what's in it for her depends on her annual salary," said Marian Mulkey, senior program officer at the nonprofit, nonpartisan California Healthcare Foundation.

In 2014, McCullough will be required to buy health insurance, and insurance companies won't be able to refuse to sell it to her.

Under the new law, individuals who earn up to about $44,000 a year -- four times the poverty level for one person -- would be eligible for government subsidies to help cover premiums, deductibles and co-payments.

If McCullough's annual income remains about $31,000, she would be eligible for such assistance, Mulkey said.

"People are prevented from having to pay over a certain share of their income on premiums," Mulkey said.

But even with subsidies, for a person on McCullough's salary, a monthly premium could still cost $200 to $300, or upward of $2,400 a year, analysts said.

McCullough was not aware until told that under the new law, those who don't buy health insurance will face fines. She said the most she could realistically afford for premiums on her current income would be $150 a month.

"I don't feel the government owes me anything," McCullough said. "But maybe we could meet halfway."

It's hard to say whether the government would meet her halfway, but there are indeed provisions for people like her.

The law includes a hardship exemption for people who cannot afford insurance, analysts said. It protects those who would face premiums of more than 8% of their annual income. Such people would also be able to buy low-cost policies that would cover only catastrophic medical costs.

The trainers

The boom years were good to Pattiy and Steve Knox and their Body Image gym in North Hollywood. Flush with clients and goodwill, the Knoxes moved their business to a trendy spot on Lankershim Boulevard, packed it with gleaming equipment and offered health insurance to their three employees.

As the economy soured, the couple struggled to pay the premiums -- about $20,000 a year -- for the small-group policy. The Knoxes had already increased their deductible to $3,500, figuring that it would keep premiums down but provide basic coverage in an emergency.

But it still wasn't enough. In January, with revenue down by nearly half, the Knoxes canceled their health insurance policy, leaving the couple, their two children and three employees uncovered.

Already, the couple has spent about $2,000 -- for Steve's ongoing recovery from a shoulder injury and two trips to the doctor for their kids.

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