Health-care proposals would affect individuals

People without health insurance in Powhatan County look like anyone else.

Most have full-time jobs, and many of the rest work part time.

But the people who come to the Free Clinic of Powhatan often live with medical conditions that the insured do not -- like the man who came for treatment of an abscess after falling off a ladder weeks earlier. His wife had splinted his broken arm at home with a board.

"He said, 'I don't have the money to go to a doctor or to go to the hospital,'" said Connie Moslow, executive director of the Powhatan clinic, which opened 11 months ago. "We eliminate a tremendous amount of emergency-room visits."

The work of the Powhatan clinic is a microcosm of the challenge facing President Barack Obama and Congress in reforming the country's health system. Each proposal for health reform attempts to reach millions of people without any form of health insurance and provide them with high-quality care at a cost the country can afford.

With Congress in recess until Sept. 8 and five proposals on the table, it's impossible to say exactly what reform will look like, if it comes at all.

In 2006, the last time the U.S. Census counted, more than 1 million Virginians under age 65 lacked health insurance. That was before the country's worst economic downturn since the Great Depression.

Free clinics, community health centers and hospital programs for the working poor help some, while government programs aid others who are young enough, old enough or disabled enough to qualify for benefits.

"The safety net is great for the people who are able to find it," said Deborah A. Oswalt, executive director of the Virginia Health Care Foundation, a public-private partnership that promotes access to medical care.

Last year, the number of patients visiting Virginia's 55 free clinics increased by 34 percent. In Richmond and Henrico, Chesterfield and Hanover counties, nearly 110,000 people under 65 lacked health insurance in 2006, the Census estimated last week.

In Powhatan alone, about 4,200 people lacked health insurance in 2006, or nearly 19 percent of the county's total population. Of county residents who earn less than 200 percent of the federal poverty level -- $44,100 a year for a family of four -- almost half of them don't have insurance.

The free clinic there, which opens twice a week in offices borrowed from the county health department, serves about 300 people with a volunteer staff and a nurse practitioner paid by the Bon Secours Health System.

CrossOver Ministry, a 25-year-old faith-based health-care provider, estimates it serves about 4,300 people at free clinics in Richmond, Henrico and Chesterfield, an increase of about 25 percent in the past year.

In Virginia, the need for health-care reform is acknowledged by all of the major players in the system -- hospitals and doctors, insurance companies, employers and health-care advocates. However, they don't agree on how to get there or pay for a system of care that reaches nearly everyone in the U.S., or what is often called "universal coverage."

"If we can afford universal coverage, let's do it," said Dr. Sheldon M. Retchin, vice president for health sciences at Virginia Commonwealth University and CEO of the VCU Health System, the biggest provider of medical care for the uninsured in the state. "It's going to cause some real pain."

Here's how the proposed health-care reforms would affect individuals:

• Mandate that all people have insurance

An individual mandate is proposed in three versions of health reform, but not by Obama or Republicans in the House of Representatives. The president would require that all children be insured, and House Republicans don't propose any kind of individual mandate.

The mandate would be enforced by tax penalties on people who don't buy coverage. One version, proposed by House Democrats, would impose a 2.5 percent income-tax penalty.

The proposed requirement is embraced by advocates and insurers as a way to make private health coverage more affordable. "If everybody is in, it should bring the costs down," said Jill A. Hanken, staff attorney at the Virginia Poverty Law Center.

The idea is to spread the costs and risks among more people, including many adults who are healthy but unable or unwilling to pay for insurance.

"Without the requirement, people would essentially wait until they get sick to get coverage," said C. Burke King president of the Virginia market for Anthem Blue Cross and Blue Shield, which provides health insurance for 2.7 million people in the state.

Most of the proposals would set guidelines for benefits and prevent insurers from denying coverage to people with pre-existing medical conditions, which Anthem supports. The House Democratic proposal would go furthest by establishing a minimum benefits package for plans offered on a proposed new exchange market.

• Expand the Medicaid system for the poor

Virginia ranks 48th among the states in per-capita spending on Medicaid benefits, which generally go to people in special categories -- children and the elderly, pregnant women and the disabled. One of the country's biggest health-care success stories has been the expansion of Medicaid to cover more children, as well as an additional program to cover kids in households earning up to 200 percent of the federal poverty level.

However, few adults receive coverage under Medicaid. Noncustodial parents aren't eligible, no matter how little they earn. Single parents are eligible in Virginia only if they earn 25 percent to 29 percent of the federal poverty level, or $3,600 to $4,200 for a family of two.

The proposals for health-care reform include provisions to expand Medicaid by up to 150 percent of poverty, depending on the proposal, and make more people eligible if they're poor enough. It's not clear how much that would cost in states, including Virginia, that face yawning holes in their Medicaid budgets once federal stimulus money runs out in 2010 and 2011. Advocates say the federal government will have to cover the additional cost without requiring matching state funds.

• Require employers to provide insurance to workers

The current health-care system depends largely on insurance provided by employers, but the number of uninsured workers is increasing.

A study by the Robert Wood Johnson Foundation estimates that the number of uninsured workers in Virginia increased by 2.4 percent, to more than 625,000, from 1995 to 2007. The number of privately insured Virginians fell by nearly 10 percent in the same period, while employee contributions to health-insurance premiums rose by 63.1 percent in the state from 1996 to 2006.

Some of the health-care proposals would require employers to offer health insurance to workers or pay tax penalties. House Democrats propose a tax penalty of 8 percent of payroll. The president proposes to make large employers provide coverage or contribute to the cost of a proposed government-run health plan. House Republicans propose tax credits instead of mandates.

This idea is not supported by Anthem or business interests, such as the Virginia Chamber of Commerce. "We do not want 'play or pay,'" said Keith D. Cheatham, vice president of government affairs at the Chamber.

• Create a system of exchanges for people and small businesses to purchase coverage, including a possible public plan that would be run by the federal government

The exchange could be a system of state exchanges or purchasing pools, or a national exchange. The idea appeals to some small-business owners and people who want to compare a variety of insurance products from a range of providers, including a possible public insurance plan.

King, at Anthem, supports the notion of a neutral clearinghouse, but not a federally regulated market that sets prices and benefits.

He and business leaders also are dead-set against a public plan, which he said would undermine private insurers and drive up the cost by drawing people to a government-subsidized alternative.

But health-care advocates say consumers suffer from too little competition among health-care insurers in Virginia. A government-run plan would set a benchmark for private insurers and for people seeking coverage, said Jim Lindsay, a health-care policy spokesman for the Charlottesville-based Virginia Organizing Project.

"That option would be a safe, reliable option that you could always count on," Lindsay said. "We've got to have something that's a reliable alternative to the system we have today."

Contact Michael Martz at (804) 649-6964 or .