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Many In Middle Class Say They're Squeezed By Healthcare Reform

SCRIPPS HOWARD NEWS SERVICE

The drum beat pulses as loud as a heavy-metal band.

The chiropractor who expects her premiums to rise, the 60s-something company manager who has to pay for maternity coverage, the Simi Valley contractor and many others who make at least $46,000 a year - they all pound away at the same rhythm.

They say the middle class is once again getting tattooed, this time by President Barack Obama's health care reform.

"However you look at it, the son of a gun lied to us," said Janette Ramsey, a Bakersfield business owner with a weekend home in Ventura. She's losing her current coverage and expects to pay $50 more a month for a policy with nearly double the deductible.

"I think it's an abomination," she said. "... I'm going to pay more and get 100 percent less."

The complaints hound the new insurance exchanges: Self-employed people and other middle-income people not covered by an employer will pay more so people with lower incomes can pay less. They're being pushed out of plans they like. They don't meet the income standards - $45,960 for an individual, $94,200 for a family of four - that may bring subsidies to push down premiums.

For answers to your questions read Information about Covered California.

"As always, middle-class people are kind of getting squeezed a lot," said James Grasty, of Ventura. He owns a designated-driver-for-hire service and earns about $65,000 a year. He thinks the exchange will bring more insurance but at a price of about $200 a month, or nearly 50 percent more than he pays now.

The biggest complaint revolves around the cancellation notices sent to people with insurance policies that don't meet the coverage standards of the Affordable Care Act. About 1 million people in California received notices, according to state estimates.

That's about 3 percent of the state's population, said Ken Jacobs, chairman of the UC Berkeley Labor Center. Nearly 600,000 of the affected people make too much money to qualify for subsidies. Estimates vary, but Jacobs said more than half of those people could face premium increases whether they end up getting insurance in or outside of the exchange. Many of the increases will likely be small.

That's still at least 295,000 affected people, but it doesn't represent an entire class, he said.

"The idea that this is a big negative effect on the middle class is wrong. It's an effect on a small group of people," said Jacobs, then citing middle-income people with pre-existing conditions or who meet the upper limits of the subsidy standards. "There are a much larger number of people who are benefiting from
Obamacare and the Affordable Care Act."

Many people with a moderate income aren't impacted by the exchanges because they're covered by their employers. But people receiving cancellation notices earned enough money to buy coverage before the Affordable Care Act.

"These folks by and large are the middle class," said Carmen Balber, executive director of Consumer Watchdog. "For consumers who fall just above that subsidy threshold, they're in a real bind."

They're also voters who know how to apply political pressure.

"I have heard from hundreds of my constituents throughout the district and from every age group, detailing their personal experience with the (reform) program," said Rep. Julia Brownley, D-Westlake Village. Many of the reports are positive. Some are not.

"It's not working for everyone," said Brownley, one of 38 House Democrats who supported a Republican proposal regarding canceled policies that the White House opposed. "I am listening and I am committed to making the changes necessary to address those concerns."

Brownley's office didn't provide information on which income groups protested the most. A staffer for Rep. Howard "Buck" McKeon, R-Santa Clarita, said the majority of complaints in November came from people receiving cancellation notices.

And the complaints seemed to draw a reaction. The president announced a plan - later rejected in California - to allow people to keep canceled policies for another year.

"You only need to look at President Obama's reaction to political outrage to cancellations and higher prices to understand that those citizens are a powerful force," Balber said.

MIXED VIEWS

But not all the stories from the middle class fit the same script or deliver criticism.

Marjie Bartels grows Valencia oranges outside Fillmore. She pays $931 in monthly premiums for health insurance. The price is inflated by a medical history that included two life-threatening illnesses and a bone-marrow transplant eight years ago that landed her in an ongoing remission.

The 56-year-old farmer makes too much money to qualify for subsidies. But federal reform means insurance companies no longer can charge her higher rates for past illnesses. Her premiums in the Covered California exchange could fall to $600 a month.

"I think it means that the money I can save I can use for other things," said Bartels, who is still making sure her doctors are covered by the exchange. "I might put it back into my farm and buy equipment or materials I need."

Bartels thinks federal reform may help her.

Steve Goldsberry, a Simi Valley general contractor, knows it will hurt him.

Goldsberry pays $767 a month in premiums to cover himself, his wife and their two kids. That policy is being canceled and Goldsberry is being pushed toward a plan that will cost $1,275 a month.

He thinks the extra cost could threaten his business.

"It's another $6,000 I have to deal with," he said. "If I'm barely making ends meet now, it will make me broke."

Jacobs of UC Berkeley noted stories of federal health reform once centered around people like Bartels who see the reform as a way to get affordable care.

 

Now, many stories focus on canceled policies.

People are worried not only about rising premiums but about the possibility that plans in the exchange will include fewer doctors and hospitals, California Insurance Commissioner David Jones said.

The fears are real, said Jones, who fought for Obama's plan to extend canceled policies for a year in California. But the reality of the insurance system is that people already absorb higher premiums each year to defray the costs of the uninsured.

"People pay a hidden tax of $500 per individual and $1,400 per family in additional premiums," he said, arguing that reform helps all income groups.

"Is there a better approach? Certainly," he said. "It's certainly better than what we have, which is for insurers to tell millions of Californians they're simply not going to provide them with health insurance."

Other supporters of the reform leap on the assertion that the middle class is paying for the poor. They said that actually older people in the exchange will pay more than younger people. Healthy people may end up paying more and people with pre-existing conditions may pay less.

The formula is designed to ultimately benefit everyone, said Dylan Roby of the UCLA Center for Health Policy Research.

"Over time, everyone gets older and everyone gets sicker," he said.

The complaints that stream from business complexes, retail stores and other people who already have insurance on the individual market make it clear the criticism and political pressure isn't going away.

Those critics include the manager of a company tucked in a Ventura commercial complex. He said his family's premiums will rise because their old policy was canceled.

"Did I save money? Do I have benefits like I had before?" he said, sarcasm shading every word. "Like no way."