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Texas sees little change despite insurance gains

Mike Norby is no longer basking in praise over Houston surpassing enrollment expectations in the federal health insurance marketplace. Four months later, the story behind the numbers isn't as rosy for the county healthcare program he helps oversee.

Harris Health System—like other programs across the state—hasn't enjoyed the expected savings from the Affordable Care Act because most of its 48,000 patients eligible for subsidized insurance instead chose to remain enrolled in the county's cheaper taxpayer-funded medical care.Now, public entities from Houston to El Paso are scrambling to tweak rules to make those who qualify for subsidized insurance ineligible for the local programs.

"We're not seeing much impact at all," said Norby, the chief financial officer for the Harris County system, which spends more than $500 million a year caring for the uninsured.

Texas, which has the nation's highest uninsured rate at about a quarter of the population, far exceeded expectations in the first enrollment drive that ended in mid-April, with more than 733,000 people signing up. Local officials and nonprofits toiled for months to reach the uninsured, investing financial and personnel resources.

Harris Health System trained hundreds of employees to assist with enrollment after identifying that about 15% of the approximately 300,000 enrolled in the county's subsidized medical program qualified for subsidized insurance, Norby said.

"In theory, that would have made a dent in the amount of taxpayer money going toward this," Norby said.

While exact statistics won't be compiled until later this year, Norby said not many people who were eligible for subsidized insurance appear to have dropped out of the county program.

He said those who decided against insurance evaluated the monthly premiums and balanced them against the $10 copay typically required for county services. In addition, the penalty in 2014 for not purchasing insurance will be either 1% of income or $95, whichever is greater — a lower annual cost than the monthly premium.

That penalty will rise in subsequent years, but not fast enough. So Harris County wants to change the rules to force those eligible for a marketplace subsidy to enroll, and make them ineligible for the county program. But because changes can only occur once a year, and must go through a public comment period, they won't be ready by November when the next round of open enrollment in the federal marketplace begins.

The situation in El Paso is similar. Of the 644 patients that received enrollment assistance from the University Medical Center of El Paso, 101 selected an insurance plan. Another 188 qualified for subsidies but didn't enroll, said Henry Garcia, the hospital's managed care contracting manager.

More than half the patients didn't qualify for subsidies at all, falling into a "Medicaid gap" created by Texas' decision not to expand the program — another strain on local resources.

Not reaching more people is a loss for the district, which paid $222.8 million in fiscal year 2013 to care for the uninsured, Garcia said in an email.

In Dallas, the Parkland Health and Hospital System invested more than $760 million in the 2013 fiscal year to care for the uninsured. About 16% — or just over 22,000 — of the 140,000 patients in charity programs qualified for a marketplace subsidy. The hospital helped some 14,000 enroll, said Bob Reed, Parkland's vice president of patient services.

"With the greatest number of our population falling into that Medicaid gap or not qualifying for that subsidy we weren't expecting a big rush of people," Reed said. And yet, "I would have hoped for more. I would have really hoped for more."

The hospital district in Travis County, which serves Austin, also wants to change its requirements for local assistance to force anyone eligible for a subsidy to buy insurance, said Ginette Magaņa, a Central Health program specialist. In 2012, hospital district taxes increased to help cover the more than $100 million a year it costs to care for the uninsured.

San Antonio appears to be one of the few success stories, possibly because it requires users to pay a monthly fee of $20 to $300 depending on income, said Virginia Mika, executive director of the CareLink program. CareLink had estimated a drop of between 20% and 25% in membership due to the Affordable Care Act, and expectations have been met, she said.

"They were already familiar with paying a monthly obligation to us and that would be the premium, so it wasn't a big change," Mika said.
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