New federal health law aids those close to retiring


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People ages 50 to 64 are most likely to benefit from the new federal health law because they have the highest rates of long-term unemployment among working-age adults and are more likely to have health problems that would make it tough for them to buy individual coverage, according to a report being released today.

The study, by the Commonwealth Fund, estimated that 18.3 million people in that age group stand to benefit from the provisions in the federal health law, including the expanded access to coverage, the elimination of lifetime and annual spending caps on policies and, eventually, the end of insurers denying people coverage based on their medical histories.

"For most older adults who are uninsured or underinsured, the early provisions, many of which went into effect this year, will provide transitional relief," said Sara Collins, Commonwealth Fund vice president and lead author of the report.

The study by the liberal-leaning nonprofit think tank found that unemployed workers between the ages of 55 and 64 years old had been jobless for an average of almost 45 weeks, the longest of any working age group. When people lose their jobs, they typically lose health coverage. "A loss of employment benefits can be devastating to people in this age group," Collins said.

California is one of 16 states where the uninsured rate for people in the 50- to 64-year-old age group is higher than the national average of about 15 percent.

The study contends that this age group has possibly the most to gain from some of the provisions in the new federal health law, which will probably end up before the U.S. Supreme Court. A federal judge in Virginia on Monday declared that the government cannot require Americans to buy health insurance.

The mandate to have health coverage is an essential component of the law, which in 2014 will prohibit insurers from denying adults coverage due to pre-existing health conditions. Requiring everyone to buy coverage - young and healthy as well as older and sicker - helped cut opposition by insurance companies.

Older adults are more likely to have pre-existing conditions that would cause them to be denied coverage, especially in the individual market where insurers can charge higher rates or deny coverage based on an applicant's medical history.

"When you're 50 years old, chances are you have a pre-existing health condition," said California AARP spokesman Mark Beach. "Just being 50 years old may actually be a pre-existing condition for insurance companies."

Higher deductible

Greenbrae resident Susan Mark, 56, had two MRIs over the past year for long-term back problems and was facing $1,106 in monthly premiums next year. She opted to increase her annual deductible from $2,000 to $5,500 to get her monthly premiums down to $495.

Mark, who is self-employed, feels fortunate just to have coverage. "With pre-existing conditions, shopping around is not an option," she said, adding that she considers her coverage to primarily be for financial protection in "catastrophic" circumstances.

While most key provisions of the federal law go into effect in 2014, a few went into place this year. The law banned lifetime limits on insurance benefits and started phasing in a ban on annual limits. Policies that are required to comply with the new rules must provide preventive services such as mammograms and colorectal screenings without co-payments.

People with chronic diseases and other pre-existing conditions who are unable to find coverage can apply to a state high-risk pool, which is costly, as well as a new federally funded program which is more affordable but is limited to people who have been uninsured for at least six months.

The federal law also created a program that helps keep early retiree premium costs down.

Lower premiums

The California Public Employees Retirement System, the largest public purchaser of health benefits outside the federal government, reported last week that the new program has reduced insurance premiums for more than 115,000 early retirees and their families by more than 3 percent, a savings of about $200 million. CalPERS said these savings have brought the fund's retiree health insurance premium rates to the lowest level in 14 years.

"The new federal health law is a big deal for this pre-retirement population," said Anthony Wright, executive director of California Health Access, a statewide advocacy group. "The big instances of people becoming uninsured are at the beginning of their careers in their 20s and right before their retirement in their 50 and 60s."

People who go without insurance before reaching the Medicare eligibility age of 65 not only incur greater costs to the system after they go on Medicare, but their financial future also may be in jeopardy if they have a crisis and incur medical debt, Wright said.

"Gaps in health insurance for people 50 to 65 are not just more prevalent but also more destabilizing because that's when people are supposed to be finalizing their savings for retirement," Wright said.

Health coverage

-- 8.6 million people ages 50 to 64 were uninsured in 2009, an increase of 1.1 million from 2008.

-- Of the uninsured, as many as 6.8 million older adults may be eligible under the federal health law for subsidized insurance through Medicaid or the private insurance exchanges that are scheduled to be up and running in 2014.

-- Nearly two-thirds of those ages 50 to 64, or about 35 million people, have a chronic health condition such as heart disease, high blood pressure or diabetes.

Source: Commonwealth Fund

E-mail Victoria Colliver at vcolliver@sfchronicle.com.

This article appeared on page A - 1 of the San Francisco Chronicle


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