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Health Reform: What Changes for the Uninsured?

As part of continuing coverage on the impact of health care legislation, Ray Suarez talks to Susan Dentzer, editor-in-chief of the journal Health Affairs, about how the new regulations and penalties will impact coverage for people without insurance.

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    Now we continue our look at who will be the most affected by the health care bill.

    Again, Ray Suarez picks up that part of the story tonight.


    One of the main goals of the new law is to make sure most Americans have insurance coverage. Thirty-two million more Americans would obtain coverage beginning in 2014. That's about 94 percent of citizens and legal residents.

    To help us understand who will benefit and how they will get insurance, we're joined again by Susan Dentzer, editor in chief of the journal "Health Affairs" and a regular analyst for us.

    Well, Susan, the uninsured were at the center of this debate. Who are they? Who are the tens of millions of Americans without health insurance today?


    We have about 36 million U.S. citizens in the country who lack health insurance today. We have another large group of undocumented, unauthorized immigrants who are also uninsured.

    But, of those 36 million, about 30 million of them are estimated to be poor enough to need some help buying health insurance. So, we have, for example, about three-quarters of the total uninsured are, by and large, low- income working people or people who are in the families of low-income working people, so kids of — whose parents are working typically lower-wage jobs.

    We also have a group of very high-income uninsured people, however. There is a group of people who are uninsured who are earning $88,000 a year or more who don't have health insurance. A lot of those tend to be younger people, especially younger males, who may think that — sometimes, they are referred to as the young invincibles. They're people who don't believe that they're going to get sick some day.

    So, it's a diverse array of people, but the preponderance of the people are lower-income working Americans.


    Well, let's take a look at some of the proposals in the just-signed law to carve away at that big number of uninsured, first, changes in Medicaid.

    There's an expansion of the program starting in 2014, and new eligibility levels, which I guess bring more people in, individuals earning 14,400-and-some dollars a year or less, families of four earning a little over $29,000.

    Now, Medicaid is a state and federal program. How would this change work?


    In effect, what's happening is, we're turning Medicaid into a true program for the poor. Medicaid was set up to cover the poor. The irony is, it only covers about half the poor to this day, partly because of the way the eligibility rules differ from state to state.

    The largest single group of people left out of Medicaid are adults who don't have dependent children. This is left over from the old welfare days, where the attitude was, well, if you don't have kids, you ought to be out there, able-bodied person working.

    Now, of course, we're thinking, no, really, people do have trouble getting health insurance even if they are low-income working individuals. So, the biggest change is, move up the eligibility to what is called 133 percent of the federal poverty level. That essentially means that, for a family of four, you — about income levels of up to close to $29,000 a year would be eligible to be enrolled in Medicaid.

    And, of course, again, the largest single pool of those people is going to tend to be people who don't have families. They're single adults or adults who don't have dependent children.


    A big part of the debate centered on these insurance exchanges, in effect creating a marketplace for insurance for people who weren't otherwise able to buy it.

    So, we will have state-based marketplaces beginning in 2014, and a sliding scale of subsidies based on income. So, if you're earning a certain income, you want to buy, but can't afford it, you head to the exchange. How does that new marketplace work?


    Absolutely right.

    Basically, everybody who is above that Medicaid eligibility level that we just talked about becomes able to buy insurance through exchanges. Every state is authorized to set up an exchange. The states will get money from the federal government to set them up. States don't have to do it. And they can defer to the federal government, which will also set up a multistate exchange.

    There will actually be two exchanges in every state. One is for individuals to buy coverage. Another is for small businesses and self-employed people to buy coverage through. There will be standardized benefits packages, four different levels of them, the platinum plan, the gold plan, the silver plan, et cetera.


    OK. But you have described who the buyers are.




    Who are the sellers? Who is in that exchange helping people who are seeking insurance buy it?


    The very same insurance companies, by and large, that are selling insurance now. They will just have to participate in the exchange, and they will have to sell these standardized benefits packages.

    So, it's going to be kind of like walking into a food court, where everybody has got to sell a hamburger, and you're able to comparison-shop among the hamburgers, or everybody has got to sell roast beef, different levels.

    The subsidies are going to be available for people not only to reduce what they have to pay for their premiums, but also for the cost-sharing, so deductibles, co-payments. Those will range from 2 percent — for example, the people with the lowest incomes will only have to pay 2 percent of their income for a premium. The rest will be picked up by the subsidy.

    People at the high end, up towards $88,000, you can claim a subsidy all the way up to being a family of four with $88,000, those people will have to pay 9.5 percent of their incomes in health insurance premiums. And, then, in addition, there are the separate subsidies to take — help people pay deductibles and co-payments.


    Now, most Americans get their health insurance through an employer, but many who work for small businesses don't. The rules are going to change now.

    Let's take a look at how the government is going to provide tax credits to help pay for coverage. Will this create a new marketplace for small-business people who want to insure their employees?


    Well, once again, the states will be setting up a separate set of exchanges for small businesses, where they can buy insurance coverage. The businesses will also get subsidies from the federal government. Those start actually right this year.

    Up to 35 percent of what a small business spends for the premium for its workers will be taken care of by the subsidy beginning this year. And, actually, the — it's been estimated that, ultimately, as many as 60 percent of businesses in the country will be able to qualify for these subsidies.


    Young adults are heavily uninsured. The rules are going to change for them, too. Most notably, you will be able to stay on your parents' insurance until age 26. Does this start right away?


    No, it takes effect six months after enactment. That has to be offered in a — in an insurance plan. So, theoretically, six months from now, we will see that benefit start to become available.

    Then, of course, the day you turn 26, you're going to have to be subject to the individual mandate, which we talked about last night. That's going to require everybody to have coverage.


    So, we have talked about ways that these different big groups will now be brought into insurance coverage. But everybody is agreeing that there will still be some 20-plus million people uninsured.


    That's right.


    Who are they?


    An estimated 23 million.

    The biggest single group will be unauthorized immigrants. That's about eight million of that 23 million. Now, of course, we don't know what will happen with immigration reform down the line. Those people may end up becoming citizens, some of them. So, they may end up getting covered.

    But, looking at current law, we — we estimate those people, eight million or so, will be un — will — unauthorized immigrants will not have coverage.

    Then, we have a group of people who will be eligible for Medicaid, but won't sign up, just the way life goes. People don't sign up for programs they're qualified for. If they ever get really sick and they show up at a hospital, they will be automatically enrolled into Medicaid. But we assume, for a while, some of them will not be enrolled.

    Then there will be people who will not be — have — be subject to the mandate because, for religious reasons or affordability reasons, they will be able to claim that they should be exempt from the insurance mandate.

    And then we will finally have a group of people who will elect not to go covered and elect to pay the penalty, the mandate penalty, instead of having coverage. All of that will add up to that figure of about 23 million.


    Susan Dentzer, thanks a lot.


    Great to be with you, Ray.