DFW medical providers, patients, employers and insurers prepare for healthcare changes [Fort Worth Star-Telegram, Texas]

June 29--Medical providers, patients, employers and health insurers learned Thursday that the terms of the Affordable Care Act, which has driven many of the changes in the market since its passage in 2010, will mostly continue.

That was viewed as good news by many North Texas healthcare professionals and patients, but not all.

What the Supreme Court's decision will mean long-term for Texas, where leaders have ardently opposed "Obamacare" despite a sky-high rate of uninsured residents, is complicated by politics and by the state's history of rejecting federal funds.

The healthcare law also dramatically expands Medicaid, the federal-state health program for the poor that already makes up close to a quarter of Texas' budget. But the court ruled that the federal government may not withhold the existing Medicaid funds from states that reject the expansion.

In the aftermath of the decision, Texas' Republican leaders haven't said what approach they'll take.

They'll likely rush to implement a health insurance exchange -- a state marketplace for the public to shop for deals on health insurance that the federal government will instate if Texas doesn't, The Texas Tribune reported.

But Texas officials have a history of rejecting federal dollars for programs they disagree with, and the Medicaid expansion will likely be no exception.

Republican consultants say they think Texas will reject the Medicaid expansion -- and the billions of federal dollars that come with it -- at least at first.

Here is a sampling of how some local people and parties believe that the ruling will affect them:

Young adults

James Vonder Haar's initial reaction to the law's passage was negative: He considered it a giveaway to people who could afford health insurance. His attitude changed after he woke up in a hospital bed on St. Patrick's Day with about a third of his skull gone.

"What happened is I got a much-needed dose of empathy," he said. "I did not realize how important it would be to have insurance until I was involved in a medical emergency."

A suspected drunken driver veered into his vehicle and two others while he returned from a soccer match March 17. Vonder Haar, 23, had come home to Arlington after a series of deaths in his family forced him to take a break from his studies at the University of Texas School of Law in Austin.

Vonder Haar is one of 3.1 million young adults allowed to remain on their parents' insurance plans because of the Affordable Care Act, according to the U.S. Health and Human Services Department.

"I would have liked to think I would have bought insurance," Vonder Haar said. "But to tell you the truth, I was in a pretty bad way when I got home. Fortunately, my family had enough money to cover me with health insurance or else I would have been buried under a mountain of hospital bills."

Vonder Haar's mother, Paula Fulks, estimates that the bills for her son's treatment and rehabilitation have topped $150,000, with another month or two of therapy left.

Employers

Since the 1950s, Gamtex Industries and its predecessors have offered health insurance to employees. CEO Arnold Gachman would like that to continue at the Fort Worth metals recycler, which celebrates its 100th anniversary next year.

But it's not easy. And even with Thursday's ruling, the future is cloudy.

With about 60 full-time employees, Gamtex falls under the healthcare law's requirement that employers offer health benefits or face an annual fine of $2,000 or $3,000 per worker starting in 2014.

"I'd say it's going to take a good three years to determine the true impact" on employers the size of Gamtex, Gachman said. And that's not good, from his perspective, because it's freezing companies' plans.

"Ultimately, we need to get these tax matters to the point everybody knows what's going on," he said. "I'd tell our policymakers, 'If you want us to expand employment, add to the economy, this act is a hurdle.'

"Employers trying to run a responsible and healthy business for their employees need to figure out a way to pay for it," Gachman said. But now, he said, Gamtex's health benefits keep rising by double-digit percentage points each year, "and that is almost choking us to death."

John Sons Press in Fort Worth has about 35 employees, so it would be exempt from the law's requirement. But Philip Hernandez, who runs the firm with his three brothers, said that for about a decade it has chosen to provide health benefits.

The commitment costs the company about $125,000 a year, or more than $3,000 per worker. "And not everybody participates," Hernandez said.

He shares Gachman's view of rising health insurance costs.

"They say there are two guarantees in life: death and taxes. Well, there's a third one -- your healthcare premium goes up every year," he said. "The strain that puts on us, it's tougher and tougher." Employees

The requirement for employers with at least 50 workers has prompted speculation that many of them will drop benefits and pay the penalty instead. But a big Fort Worth-based employee benefits consultant, Higginbotham, doesn't expect that to happen.

"We don't see a mad rush to drop health insurance in 2014," when the mandate takes effect, Higginbotham CEO Rusty Reid said. "Employers offer health insurance to compete for employees on something other than just income."

When employers add up the cost of the $2,000 or $3,000 per-worker penalty and see how disruptive buying insurance individually will be to employees, dropping coverage will look less and less attractive, he said.

Cheryl Lopez, vice president at Whitney Smith Co. in Fort Worth, another employee benefits consultant, agreed with Reid's outlook.

"Although the tax penalty may be cheaper for an employer that cannot afford to offer health insurance, I believe employers would choose to find health insurance plans that meet the minimum requirements than to pay tax penalties," Lopez said.

Medical providers

Barclay Berdan had his fingers crossed, hoping that the law would be upheld.

He pretty much got what he wanted.

"It allows us to continue to move forward," Berdan, chief operating officer of Texas Health Resources, said before the ruling was announced Thursday. "To throw on the brakes" by overturning major provisions of the bill, was "going to be more challenging," Berdan said.

Arlington-based Texas Health has 24 hospitals in North Texas, plus numerous clinics and other medical services.

One complication, Berdan said, is the court's limitation on the federal government's power to compel states to expand Medicaid.

"That will be a big challenge in states, including Texas," that had balked at expanding Medicaid, he said.

He said it's too early to determine the financial impact on hospitals if Medicaid eligibility does not expand. Expansion would reduce the number of completely uninsured residents.

Public hospitals

Even without the law giving more people access to healthcare, clinics in the JPS Health Network and the emergency department at John Peter Smith Hospital were seeing more patients, CEO Robert Earley said.

The daily census in JPS emergency rooms doubled in two years, from 175 people to 350, he said.

Once the law ramps up, Earley said, more growth will come, forcing changes in how healthcare is delivered.

"If growth is our future, then the hospitals have to focus on preventive care and on getting people in the system early before they show up at emergency rooms when their care is most expensive and their conditions are more advanced," Earley said.

He said the federal and state governments must focus on expanding training programs to fill the positions needed to take care of the new people.

"We've got to make sure that we have the physicians here to accommodate that growth," Earley said.

Insurance agents

It didn't take a Supreme Court decision for the law to affect Audra Sullivan, a Keller health insurance agent with about 20 years in the business and the owner of Granite Benefits.

Her commission on policies she sells has been roughly cut in half since the law was enacted.

"A lot of carriers didn't wait to go ahead and cut commissions," Sullivan said. "We used to get 20 percent. Now it's 10 percent."

The law requires health insurers to spend at least 80 to 85 percent of premiums on medical costs or quality-related expenses, leaving the rest for administration, including commissions. Those that fall short have to pay rebates or reduce premiums; last year, that amounted to $1.1 billion, according to the federal government.

"We've had a lot of agencies consolidate. A lot of people who dabbled in the business got out. It just wasn't worth it," she said of the lower commissions. She sells mostly individual and small group policies.

Sullivan is also worried that other provisions of the law will boost rate increases, which are already running "in the low double digits."

For example, maximum allowable deductibles will be capped starting in 2014. She expects the difference to result in higher premiums and prefers that individual customers -- including herself -- get to make the call.

"I'm on a health savings account policy with a $3,500 deductible," which will drop to $2,500 under the law, she said. "I can handle a higher deductible, but I'm having to pay more money to have a lower deductible."

That runs counter to a general trend in the market, she said, of consumers opting for "high-deductible, catastrophic plans, because healthcare has gotten so expensive."

Not surprisingly, she's not a fan of the law and would have preferred seeing it struck down.

Patients

Connie Hughes of Arlington seemingly should be counting the days until her 65th birthday in January, when she becomes eligible for Medicare. But she's still not sure what the future holds.

Hughes, who has a progressive nerve disorder, has a Blue Cross Blue Shield individual policy that costs $989 a month. Her mother pays that premium on her behalf.

"It has a $500 deductible and a $2,000 maximum out of pocket," Hughes said. "I usually hit that around March or April."

She's not sure whether she will get a rebate from Blue Cross Blue Shield under the requirement that insurers pay out at least 80 to 85 percent of a premium.

It would certainly be welcome. Hughes said she cared for her ailing father for years and never accumulated enough time in the workforce to qualify for full Social Security benefits. Her monthly payment under the Supplemental Security Income program for disabled, low-income beneficiaries is just $698.

There's also Medicaid, but it doesn't pay for her drug prescriptions, she said.

"I'm very fortunate" to have health insurance at all, she acknowledged.

Going on Medicare will mean her expenses should be slashed, but in her experience, it has its own challenges.

"I think the doctors say, 'Here comes another Medicare patient, duck!'" she said. Her own primary-care doctor quit accepting all insurance, and she sees other physicians reluctant to take new Medicare patients.

According to a poll by the American Medical Association, 1 in 5 U.S. doctors limits how many Medicare patients he or she will see. Among primary-care physicians, it's 1 in 3. They cite low payments and the annual threat of cuts.

If an expanded government program drives away even more providers, "that puts the individual age 65 and older in a precarious spot," Hughes said. "What's going to be there for us?"

This report includes material from The Texas Tribune.

Jim Fuquay, 817-390-7552

Twitter: @jimfuquay

Mitch Mitchell, 817-390-7752

Twitter: @stcrime

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