Stephanie Nessmith once relied on a payday lender to get money for her daughter’s respiratory medicine.
Skylar, 3, used to have insurance from the state but lost it because Nessmith earns too much – $11.50 an hour working at a Henderson UPS Store.
“They think I make enough money to pay my rent and pay all my utilities, get to and from work, pay for her day care and provide health insurance for her,” Nessmith said.
Nessmith and Skylar are two of Nevada’s 607,000 uninsured residents, the overwhelming majority of whom use emergency rooms for primary care that they never pay for, avoid doctors and pharmacies altogether or pay for care out of pocket.
But that – and more – could change next year when the main provisions of President Barack Obama’s Affordable Care Act kick in. They have the potential to overhaul Nevada’s health care sector.
The law will essentially force almost everyone to have insurance and will require large companies to offer workers coverage. A state-run website will help Nevadans find affordable health plans, and at least 70,000 more people statewide are expected to join Medicaid. Insurance companies will be barred from denying coverage or charging higher rates to people with pre-existing conditions, and companies will be banned from imposing annual spending limits on many health plans.
Many Nevadans are expected to benefit from the expanded coverage and tighter controls on insurance companies. Hospitals also could improve their bottom line with more paying customers.
But many business executives say the law will raise costs and lead to higher insurance rates for millions of people.
What’s more, Nevada has a physician shortage, and a surge of newly insured patients might cause longer wait times at doctors’ offices.
In 2011, Nevada had the second-highest rate of uninsured residents in the nation, almost 23 percent. That was slightly below Texas’ 24 percent but well above the national rate of 16 percent, according to the U.S. Census Bureau.
Officials hope the rate drops next year when residents can shop more easily for health care plans on the Nevada Health Link website. Advocates envision insurance companies using the site to compete for new customers by offering good rates. Nevadans can start using the site in October, but coverage won’t take effect until next year.
The Affordable Care Act requires every state by 2014 to have an online insurance marketplace, such as Nevada Health Link. Insurance companies don’t have to participate, but it’s likely they will. All of the major carriers are eyeing Nevada’s system, said CJ Bawden, spokesman for the Silver State Health Insurance Exchange.
“They’re interested in tapping into a new market,” he said.
State officials want to burst out of the gate and hope that 118,000 people use the website to buy insurance by May 2014. Enrollment goals slow considerably in the following years, with an aim to have 173,000 people signed up by 2017.
As part of the law, low-income residents can get tax credits to help them buy insurance.
People without insurance will face financial penalties.
Next year, an adult without coverage will pay the federal government $95 or 1 percent of his or her income, whichever is greater. That fee will rise in 2015 to $325 or 2 percent, and by 2016, it will climb to $695 or 2.5 percent of a person’s income.
Other Nevadans will become insured another way: The law allows for expanded eligibility of Medicaid, a federally and state-funded insurance program for the poor.
Republican Gov. Brian Sandoval, though a staunch opponent of the health care law, agreed in December to expand Medicaid in Nevada. The federal government will pay all medical costs during the first three years of the expansion, and the state will help pay administrative costs.
State officials expect 70,000 previously eligible Nevadans to enroll in Medicaid because of the Affordable Care Act’s insurance mandate. Another 78,000 people will become eligible for the program.
Altogether, the expanded coverage in Nevada should lead to a drop in unnecessary emergency-room visits – or at least get more people to pay for that care, hospital executives say.
Federal law requires ERs to treat people for any ailment, regardless of whether they can pay. As a result, financially strapped Las Vegans often use the emergency room, rather than a physician or specialist, for all their health needs.
About 40 percent of ER patients at the Clark County-run University Medical Center on any given day are uninsured, CEO Brian Brannman said.
Brannman wants people to skip the ER if they don’t really need it and instead use outpatient clinics for non-emergencies.
“Hopefully that will be a viable choice,” he said.
Sunrise Hospital and Sunrise Children’s Hospital had a record 120,000 ER visits last year, up 8 percent from 2011. A good portion of those came from people who didn’t have real emergencies, CEO Todd Sklamberg said.
A Medicaid expansion will offer more access to preventive care and should lead to fewer unnecessary ER visits, he said.
But Sklamberg worries there aren’t enough primary care doctors in Southern Nevada to handle the potential influx of patients.
“With the expansion, I think this could be a challenge,” he said.
Howard Baron agrees. The pediatric gastroenterologist and immediate past president of the Clark County Medical Society said valley doctors expect more patients from the Affordable Care Act. But a flood of new customers in his industry isn’t always a good thing.
Doctors who treat a high volume of patients are more prone to mistakes, he said. But if doctors don’t increase their workloads, patients will wait longer to get appointments.
Southern Nevada has one pediatrician for every 1,800 patients, compared with the national rate of one for every 1,200, Baron said. He figures that disparity is probably the same for primary care and other doctors in Las Vegas.
“I think we’re all going to feel increased pressure for demand for services,” he said.
Obama, a Democrat, signed the Affordable Care Act on March 23, 2010.
Thirteen state attorneys general, most of them Republican, sued the federal government the same day, claiming the law was unconstitutional. Nevada joined the lawsuit a few months later.
The U.S. Supreme Court voted 5-4 in June 2012 to uphold the law. The mandate to buy insurance or pay a penalty essentially is a tax and does not violate the Constitution, the court ruled.
Some provisions already have taken effect.
Millions of seniors are saving an average of $600 a year on prescription drugs because of the law, according to the White House. Also, millions of young people have been able to stay on their parents’ health insurance plans until they reach age 26. Preventive care, such as mammograms, are covered free of charge.
“Three years ago today, I signed into law the principle that in the wealthiest nation on Earth, no one should go broke just because they get sick,” Obama said March 23.
The law faced a firestorm of opposition before its passage and still faces heavy criticism, including from many businesses.
Under the law, most large employers will be charged $63 for each worker they insure next year. The fee will drop in 2015 and 2016, but it aims to collect $25 billion to help insurance companies pay for customers’ medical bills, according to The Wall Street Journal.
The Affordable Care Act also requires companies with the equivalent of at least 50 full-time employees to offer workers health coverage next year. If they don’t, they face an annual penalty of $2,000 multiplied by the number of workers minus 30. A company with 100 full-time employees, for instance, would pay $2,000 times 70, or $140,000.
About 309,000 Nevadans, or 11 percent of the population, receive health care through Medicaid. Expanded coverage often is cited as a key benefit of the Affordable Care Act, but some people worry about it.
Clark County receives $65 million to $70 million a year in matching funds from the federal government because UMC has such a large volume of uninsured patients — about 20 percent who account for $250 million a year in uncompensated care. The matching funds are expected to drop to about $35 million by 2019 under the Affordable Care Act because, in theory, the hospital will have more insured patients.
But many of the newly insured will have low-paying Medicaid, and the new revenue they bring will not make up for the loss in matching funds, Brannman said.
“The difference between those two numbers still leaves us in a hole,” he said.
Nessmith, the single mother, works 40 hours a week at the UPS Store. She doesn’t get health insurance through her job.
In 2012, she got Skylar on Nevada Check Up, a state-run health plan for low-income children who aren’t covered by private insurance or Medicaid. Nessmith paid $80 every three months, and the plan covered everything – doctors visits, prescriptions, hospital treatment – with no co-pays.
Skylar lost the coverage Jan. 1. Nessmith was told she makes about $60 too much every two weeks to qualify, even though she earns the same amount as when she applied.
The Nevada Department of Health and Human Services oversees Nevada Check Up. Agency spokeswoman Mary Woods declined comment on Nessmith’s claim, saying she can’t discuss specific cases.
Nessmith looked into buying private insurance for herself and Skylar, but it would have cost almost $500 a month, an impossible expense. Nessmith makes about $1,600 a month in take-home pay from the UPS Store and spends half of it on rent and utilities alone.
Skylar gets congested from allergies, so she takes albuterol and budesonide to open her airways. At full price without insurance, the drugs cost $1,200 for a three-month supply.
One time, Nessmith was forced to take out a high-interest $1,000 loan from a payday lender to buy her daughter’s medication. When Skylar runs low, Nessmith worries about how she’ll afford the next round.
A new part-time job should help. The night of March 22, her 25th birthday, Nessmith started working at the sports book at South Point casino. She still puts in 40 hours a week at the UPS Store.
Nessmith can’t remember the last time she had health insurance. She figures she has gone at least four years without it, since she was pregnant with Skylar.
“It has been a while,” she said.