As healthcare overhaul nears, many consumers still in the dark

Like many Californians, Scott and Danielle Nelson of Orange County are anxious about what President Obama’s healthcare law will mean for them.

While government officials tout the broad benefits of the Affordable Care Act to drum up enrollment, many consumers are eager to know how the overhaul will affect them personally, from pocketbook concerns to worries about whether their local doctor and hospital will be included.

And, so far, there have been considerably more questions than answers, as officials and insurers scramble to get ready and clarify many of the details that people care about the most.

The issue hit home for the Nelsons several weeks ago when their current health insurer, Aetna Inc., said they were among thousands of customers in the state whose coverage will be canceled at year end. As a result, they will need to buy a new policy just as the federal law reshapes the market.

The surprising news came at a rough time for the Aliso Viejo couple and their two young children. Danielle, 42, was diagnosed with cancer in March. She began sobbing as she shared the insurance company’s letter with her husband. Her 7-year-old daughter, Taylor, saw something was wrong and handed her parents a pink purse where she had saved up $27.

“All of this has turned our lives upside down,” said Scott, 49. “The uncertainty in health insurance really has us scratching our heads.”

The Nelsons aren’t alone in searching for answers as the biggest change to healthcare in nearly half a century prepares to kick in Jan. 1. About half the public says they don’t have enough information about the health law to understand how it will affect their own family, according to a recent poll by the Kaiser Family Foundation.

Huntington Beach resident Brad Miller said he and his wife pay about $1,200 a month now for their health insurance. The 60-year-old says he’s concerned that comparable coverage will be expensive next year and federal subsidies won’t be available to help.

Steven Aispuro, a 50-year-old father of three in Whittier, is uninsured and eager to find out how much family coverage will cost, and whether his family qualifies for government aid. “You hear a lot of negative things about Obamacare on TV. I don’t really know what’s true about the law,” he said.

The federal health law requires most Americans to have health insurance starting next year, and many consumers will qualify for free or subsidized coverage based on their income.

While subsidies may make insurance more affordable for some, state officials have already warned that premiums could rise an average of 30% for many middle-income residents who don’t get their insurance through their employers.

How individuals and families fare will vary based on their age, household size, income and where they live. Explaining the nuances of a complex law and various insurance options to as many as 5 million Californians is a daunting task.

Oct. 1 is the target date for when Covered California, the state’s new insurance exchange, hopes to have an online enrollment system up and running. The state expects to launch an online calculator at the end of this month where consumers can compare prices of specific health plans. Exchange officials will hold a town hall at Cerritos College in Norwalk on Friday afternoon to discuss their progress and field questions.

The Nelson family said they feared the worst after the Aetna cancellation notice, particularly as they incurred medical bills related to the cancer diagnosis.

“Are we going to lose our house? That was really where my mind went,” Danielle said.

In the days and weeks that followed, they learned they stood to benefit from certain provisions of the health law, while other questions surrounding cost and choice of doctors were harder to pin down.

Scott is a philanthropy and communications consultant who left a corporate job with health benefits about 18 months ago. Danielle previously worked as an assistant vice president for financial firm Lehman Bros. in Southern California.

Under the healthcare overhaul, insurers must accept all applicants regardless of preexisting medical conditions. That was a huge relief for the Nelsons after her diagnosis of non-Hodgkin’s lymphoma, a blood cancer.

Danielle had a tumor in her jaw removed. But thus far, she doesn’t require further treatment beyond regular testing. However, she still worried her premiums would be higher next year because of the cancer. But the health law forbids that as well.

Scott called the toll-free number of Covered California to get more information and a representative directed him to the exchange’s website at https://www.coveredca.com, where it has a calculator.

She also advised him to look at line 37 on his most recent tax return for an idea of his “modified adjusted gross income,” which is used to gauge whether consumers qualify for premium subsidies.

The Nelsons pay $667 a month now for their health policy. But a mid-level Silver policy from the exchange — along with the federal subsidy for which they are eligible — would cost them $593, or 11% less, according to the state’s calculator.

The family says they may want more coverage than a Silver plan offers, but for now, the state calculator only cites general rates for that level of benefits.

Starting next year, health insurance premiums are based on a person’s age and location. Separately, premium subsidies hinge on household income and size.

Individuals earning less than $46,000 a year and families below $94,000 annually may qualify for subsidies. In California, individuals earning less than $16,000 can get coverage through an expansion of Medi-Cal, the state’s Medicaid program for the poor.

Another crucial part of the insurance math for consumers are the co-pays, deductibles and other medical expenses they’re responsible for until a health plan starts picking up the tab.

As part of the health law, California set limits on what residents will have to pay for care out of their own pockets.

For instance, Covered California requires Silver plans to have a $2,000 annual deductible, and the maximum out-of-pocket expense for a family is $12,700.

The Nelsons said they were encouraged by those cost estimates, but they worried whether the new health plans would include her doctors and hospitals.

To hold down premiums in the exchange, some insurers have limited their roster of medical providers. For instance, Blue Shield of California said its exchange customers will be restricted to 36% of its regular physician network statewide.

“We have good doctors now,” said Scott, who plans to check on the medical providers before picking a policy. “When my wife needs care, I want her to have the best.”

chad.terhune@latimes.com

Twitter: @chadterhune

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Health law timeline

Aug. 30: California will launch an online tool to compare specific health plans and rates

Oct. 1: Individuals and small businesses can begin enrolling in the insurance exchange

Jan. 1: New health policies take effect

March 31: Open enrollment ends

For more information go to https://www.coveredca.com or call 888-975-1142.

The federal website is at https://www.healthcare.gov.