Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
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Shannon Corona had stomach surgery in 2004, but she has not been back to her specialist for a checkup in two years.
Her employer, a landscape architectural firm where she is a drafter, doesn't offer health insurance, and she says she can't afford it.
"I have too many bills: two student loans, a car payment and car insurance," said Corona, a 23-year-old from San Dimas.
Corona is the kind of Californian who Gov. Arnold Schwarzenegger says would be helped by his proposed overhaul of the state's healthcare system. But compelling everyone to obtain insurance -- the linchpin of his plan -- may not work for many Californians in need of aid, according to health policy experts.
Under the governor's plan, nearly 1 million middle-class people would be caught in a tough bind, those experts say: They earn too much to qualify for the insurance subsidies Schwarzenegger wants the state to provide but not enough to afford comprehensive coverage.
Only those whose yearly earnings are less than 250% of the federal poverty level -- about $25,525 for individuals and $51,625 for families of four -- would qualify for the proposed subsidies.
People earning more would be required by law to have, at a minimum, a high-deductible catastrophic insurance plan. Such policies, which the administration says cost about $1,200 per person a year, would not pay for anything until a patient's annual medical costs exceeded $5,000.
And families could owe as much as $5,000 more in co-payments before insurers absorbed further medical bills.
Those who earn more than Schwarzenegger's subsidy threshold but are hardly affluent can include fitness trainers, retail sales workers, child-care workers, actors, dental assistants, artists, social workers, construction workers and legal assistants. Many retired people and those in part-time jobs also routinely earn just a little more than the cutoff amount.
"I think the biggest weakness is just not addressing where people 2 1/2 times poverty are going to go if they want something more than catastrophic coverage," said Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who analyzed the governor's proposal at Schwarzenegger's request.
Democratic leaders in the Legislature, which must approve any healthcare overhaul and is weighing several proposals, have been skeptical of requiring coverage without regulating how much insurers can charge.
E. Richard Brown, director of the UCLA Center for Health Policy Research, told a Senate panel Thursday that 917,000 of the 2 million uninsured who earn more than Schwarzenegger's threshold would have difficulty affording the coverage the governor wants to require.
The administration says many components of Schwarzenegger's plan would help lower premiums, although they have no estimates of how much. One provision would limit how much insurers and hospitals could use for things other than medical care, specifically profits and administration. At least 85% of premiums would have to be spent on care.
But both the administration and independent experts say Schwarzenegger's plan would need the mandatory insurance element in order to work. The mandate would ensure that the healthy and the young, who pay more in premiums than they spend on care, sign up for insurance.
"There will be a larger risk pool that will lower the individual premiums," Schwarzenegger told a gathering of healthcare professionals in Los Angeles on Thursday.
Massachusetts is the only other state that requires health insurance coverage. Even though its mandate doesn't kick in until July, the initial experience has been dispiriting.
When a state board created to help arrange coverage sought bids, insurers proposed premiums far above state projections: between $3,000 and $6,000 a year, depending on a person's age. Massachusetts is soliciting new bids for less comprehensive coverage than originally planned.
Dr. Mark Smith, president of the California Health Care Foundation, an Oakland nonpartisan group that is analyzing the various proposals being considered in the Capitol, said any workable plan would have to "have some credible evidence that costs will be controlled." That, he said, "is the most questionable part of all the plans I've seen so far."
The minimum insurance policies that Schwarzenegger wants to require would cost less than those in Massachusetts, because in California they would be reserved for catastrophic illness or injury.
But the limited uses of those policies make them unappealing to some who would be required by law to buy them.
"I don't want to be forced to buy [health] insurance like I buy auto insurance," said Nick Trasente, a bartender and aspiring actor in Burbank.
Schwarzenegger acknowledged that high-deductible plans are not "the ideal situation," but he said they could help protect people from the kind of medical bills that cause bankruptcy. "I guarantee you," he said at a news conference last month, that an uninsured family hit with $150,000 in medical costs "would have been happier with the $5,000" deductible of a catastrophic policy.
But some people who already hold such policies say they are of little help when it comes to routine medical care, the kind that can help identify health problems before they become financially overwhelming.
Kari Picolla, a 28-year-old assistant to two actors in Glendale, purchased catastrophic insurance from Blue Cross of California after her regular coverage became too expensive. It costs $85 a month and pays for four doctor visits a year.
"I can definitely afford the premium. What I can't afford is healthcare, going to the doctor" after exceeding the visit limit. "It's $120 a pop if I go more than four times a year. Getting those bills is tough."
Catastrophic plans are even less attractive to older people and those who require regular medical care.
Jim Thompson, a 61-year-old musician from Santa Monica, wanted to retire early with his 54-year-old wife, Mara. But the cost of buying a comprehensive insurance policy would have been $1,300 a month.
"She has gone back to work full time for one reason only: healthcare," he said. Though the couple's financial picture is "rosy," he said, "our entire well-being is under threat, because without health insurance you can be wiped out."
On average last year, annual premiums in California cost $4,548 for individuals and $11,856 for families, according to a survey of employers by the California Health Care Foundation. Premiums rose 8.7% in 2006, more than twice the state's rate of inflation.
The state's Managed Risk Medical Insurance Board runs a last-resort insurance program for people that private insurers won't take. But its offerings are not cheap: For the least expensive plan, families of three or more in Los Angeles County must pay between $10,050 and $14,245 a year, depending on age.
Robin Corona, Shannon Corona's mother, looked into the program for her daughter, who makes more than the threshold. But the family determined that even the cheapest plan she could buy would be too much at $2,681 a year. .
Both parents are retired and said they want to help. But they have their own financial challenges, including the care of Shannon Corona's 91-year-old grandmother and her medical expenses. And Robin Corona said the insurance rates for her and her husband just went up.
"We can't help her, and that's where I feel terrible," Robin Corona said. "I'm not Rockefeller. Nobody can afford those prices.
"We're supposed to be the No. 1 nation in the world, but we're so far behind everybody," she added. "There's got to be a better way."
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Subsidies for some
Gov. Arnold Schwarzenegger wants to require all Californians to obtain health insurance. Under his plan, the state would help pay to insure people earning less than 250% of the federal poverty level.
Number inETD250% of federal
Source: U.S. Department of Health and Human Services
PHOTO: RETIREMENT DEFERRED: Because Jim and Mara Thompson of Santa Monica needed more health insurance than they could afford as retirees, she went back to work.
PHOTOGRAPHER: Anne Cusack Los Angeles Times
PHOTO: 'TOO MANY BILLS': Shannon Corona of San Dimas says she makes too much to qualify for subsidized healthcare coverage but not enough to pay for private insurance.
PHOTOGRAPHER: Glenn Koenig Los Angeles Times