Health care reform exclusions raise concerns over funding for uninsured

The Las Vegas Sun reports:

“Armando Hernandez first felt a searing headache, then his legs began to swell.

He lived with the pain for two days but finally relented and went to a hospital on day three. The Reno resident was 19 years old at the time. His kidneys were failing.

Now, Hernandez, who entered the country illegally at the age of 15 when he moved with his parents from Guadalajara, Mexico, to Oakland, Calif., is 25 years old and goes for dialysis three times a week.

When President Barack Obama announced the deferred action for childhood arrivals program in June, Hernandez was elated. Not only was this his opportunity to obtain a work permit and some semblance of permanency, he believed he would benefit from provisions in the Affordable Care Act that barred denial of health insurance based on pre-existing conditions and subsidized insurance for low-income individuals.

But Hernandez quickly found out little would change in his health care. In August, the Obama administration said deferred-action recipients would not be included in the health care act’s provisions. The move kept to a pattern in the Affordable Care Act of explicitly excluding or severely curtailing immigrants’ access to its benefits.

In its efforts to pass the Affordable Care Act, the administration excluded immigrants who were not “lawfully present” in the country from the insurance mandate, avoiding the bear trap of an immigration debate sinking its teeth into health care reform.

Even with those assurances, some lawmakers in 2009 sounded the alarm that the act would lead to misuse of taxpayer money.

“Taxpaying families, already weighed down by bailouts and massive spending bills, cannot afford to pay for health insurance for millions of illegal aliens,” Rep. Steve King, R-Iowa, said in 2009. “Hard and smart working Iowans should not be forced to pay for illegal aliens to obtain health benefits under any health care reform plan.”

Immigrants who do not have a legal residency status are excluded from the act, and are also barred from purchasing health insurance from the state. Immigrants here legally, but who have been in the country for fewer than five years, are not eligible to receive coverage under the planned Medicaid expansion.

Obama administration officials have said the health care debate was not the place to tackle immigration reform, but critics of the restrictive regulations say they run counter to the stated purpose of the law: to insure more people, thus expanding the pool of patients with coverage and lowering costs overall.

By avoiding the issue altogether, critics contend, lawmakers added to budget uncertainty for safety-net hospitals and health centers that treat a majority of the uninsured, and possibly added to the costs for taxpayers.

“Absolutely it’s counterintuitive, given the goals of reform, to exclude these people,” said Maria Fehlig, a Las Vegas emergency room nurse and representative for the California Nurses Association. “I don’t think it was well thought out.

“I honestly, in my heart of hearts, don’t think anybody who works in medicine, or very specifically on the front lines of health care, was involved in developing this. That in and of itself is a travesty. You have no idea what a nurse does and a doctor does unless you live and breathe it every day.”

A year’s worth of outpatient dialysis, as Hernandez is receiving, costs approximately $70,000. In February he will hit six years of treatment. A Washoe County health care assistance program currently covers Hernandez’s dialysis costs. The program is designed to reimburse medical facilities for patients who do not qualify for federal, state or community programs; eligibility is income-based. Yet, Hernandez says he cannot be on the list for a kidney transplant without insurance or $200,000, the quote he was given to pay for the procedure out-of-pocket.

••• A political “third-rail”

On the front lines of care for the uninsured and immigrants who are not legal residents are safety-net hospitals, such as University Medical Center.

At UMC alone, approximately 85 patients use the facility for kidney dialysis.

“By and large if you are an American citizen or are here as a legal resident alien and have end-stage renal disease and need dialysis, then you are covered by Medicare. The folks who don’t have a mechanism to pay for dialysis and are showing up in emergency rooms; you can extrapolate that they are probably undocumented,” said UMC CEO Brian Brannman.

Because federal law mandates hospitals treat and stabilize all emergency patients, public hospitals such as UMC bear the brunt of treating a majority of the uninsured.

“It was unfortunate that the political environment, when the whole national health insurance discussion was taking place, made it so that undocumented immigrants were such a third rail for everybody that it never really got serious discourse,” Brannman said. “That’s unfortunate because, particularly in the Southwest and border states; it’s an everyday problem for hospitals. And we are sort of putting blinders on and pretending it’s not there.”

Despite excluding this portion of the population, which the Pew Research Center estimates to be around 11 million people, the federal government also plans to start rolling back funds for hospitals such as UMC that deal with a disproportionate amount of the uninsured. UMC receives $75 million per year in Disproportionate Share Hospital funding, which totals $20 billion annually and is scheduled to gradually decrease by 50 percent.

UMC’s total operating budget is just under $540 million, and the hospital had a $70 million deficit in 2010-2011.

“The Affordable Care Act will strengthen safety-net hospitals that are a critical piece of our health care system. Because the number of uninsured and amount of uncompensated care is expected to decline thanks to the health care law, the law directs HHS to develop a methodology to reduce Disproportionate Share Hospital funding over time in a way that is linked to reductions in the number of uninsured. The department will propose this methodology for public comment next year,” said Fabien Levy, press secretary for U.S. Department of Health and Human Services, in an email.

The reduction in payments is scheduled to start in 2014, and some in safety -net hospital community are looking to delay the cuts.

“There is discussion among advocacy groups for safety-net hospitals like UMC that the reductions should be deferred,” Brannman said. “We are banking that it goes away, but also hoping there is a conversation of perhaps deferring that at least for a little while until you really understand what the impact is. Because if you cut that in half and all the other good things with ACA don’t happen, that burden will just move to local taxpayers. … Unless we see an overall shift in the curve and a cost drop, it’s kind of risky.”

Few in the medical industry were surprised that lawmakers installed guarantees in the law that immigrants who are not lawful residents cannot receive taxpayer-funded benefits, but there was some bewilderment in respects to other restrictions.

Under the Affordable Care Act, many states, including Nevada, are setting up insurance exchanges that will serve as a competitive marketplace for purchasing a plan. To participate in the exchange, though, the person must be “lawfully present” in the country.

“The comparison that has been made is that it’s like saying because the FDA makes food safe, you can’t go into grocery stores,” said Jennifer Ng’andu, a health policy analyst at the National Council of La Raza. “There isn’t any precedent for barring a group from a marketplace and saying they can’t buy something with their own money.”

Advocates for immigrants say the policy simply does not make sense. Excluding the population will increase administrative costs as immigration status will have to be verified, and the potential benefits of increasing the pool of insured are missed.

“In many ways undocumented immigrants are a dream for health insurance companies,” Ng’andu said, adding that approximately 500,000 immigrants without a lawful residency status pay for health insurance. “They’re often working, young adults, and new immigrants are generally healthier than their second-generation counterparts. There is not a lot of explanation as to why they are healthier, but the fact is … including undocumented immigrants makes business sense for many insurance companies.”

Research has shown that immigrants use the health care system less than U.S. citizens.

A  study by Leighton Ku, director of the Center for Health Policy Research at George Washington University, showed that per-person medical expenditures on immigrants were one half to two-thirds that of U.S. born residents.

A network of community health centers will get a boost in funding from the federal government, following the thinking that as more people are insured under the law’s mandate, fewer people will turn to emergency rooms for care and more will go to nonprofit community health centers that provide primary care to the indigent, regardless of immigration status.

“There’s a little bit more funding for health centers to try and compensate for increased demand incurring in 2014,” said Nevada Health Centers Chief Medical Officer Darren Rahaman, referring to the year when many of the act’s provisions take effect. “Is it enough? I’d say no, but we appreciate all the funding we get.”

Nevada Health Centers, which gets a third of its funding from the federal government, operates 23 medical centers, one dental center, a mobile mammography project, mobile dental program and seven clinics for women, infants and children.

As more people acquire insurance because of the law’s mandate, private medical centers will compete for the newly insured. Rahaman said they are still unsure how the changes will affect their mix of uninsured and insured patients but are watching the dynamics closely.

“The more patients covered, the better for everybody,” Rahaman said. “The more funding the not-for-profit organizations that are safety nets get, the better for that population. Increase funding for safety-net hospitals and health centers. Even though we are going to have more insured patients, there’s still that huge gap out there. They say, ‘Shhhh. Be quiet. Let’s not talk about it.’ But who is going to serve them?”

Brannman said part of the problem is the U.S. health care system’s culture of focusing on the treatment at the time of illness instead of primary care.

“While you don’t want to create something that is attractive to people to cause more to come over, the reality is we have a cost and we need to face up to it,” he said. “We have to ask ourselves what is the least cost toward the economy and society in terms of managing this. They’re here. If they get sick and then end up in the emergency system for care, we can’t deny them. We would be better off with some basic level of care and health status. It’s a lot cheaper paying for a primary care provider per person than waiting for catastrophic illness when you have $100,000 in care.”

••• Tough decisions, more waiting

Advocates for immigrants were especially surprised when deferred action recipients were denied access to the law’s benefits. The population, by definition, is young and educated and probably has the most momentum toward receiving a permanent legal status.

“It was a proactive move by the administration to exclude them, and it was disappointing for a couple of reasons,” Ng’andu said. “For all intents and purposes we’ve been fighting for Dreamers or deferred-action individuals to have the ability to fully participate in American society and they were left behind. They can work and can actively serve in the military, but they can’t take up opportunities to remain healthy?”

The administration argues that deferred action is a temporary program, and while recipients are grated a stay from deportation for two years, they are still not technically legal residents.

“It was never intended that those whose cases are deferred under the DACA process would receive federal financial assistance for health care. HHS’s actions regarding health benefits are consistent with the policy in the Dream Act,” said Levy, the U.S. Heath and Human Services press secretary.

Hernandez, despite being on his way to receiving a work permit and Social Security number, is now confronting the inertia in his health care.

His mother is willing to donate her kidney, but they cannot conduct the test needed to see if she is a match until he acquires insurance. While the cost of his nearly six years of dialysis easily totals more than double the cost of transplant surgery, dialysis is his only option for now.

A kidney transplant in Mexico would cost less, but Hernandez does not have the money to pay the $40,000 to $50,000 the procedure would cost there. He would have to start back in high school, and fears that once in Mexico he would not be able to get the care he needs and would be separated from his family.

Brannman said UMC has worked with the Mexican Consulate and a nonprofit to help willing dialysis patients return to their parent country, but few take advantage of the offer.

“Many of these folks have got other ties to the community,” Brannman said. “They’ve been here a long time, they’ve got children, or you’ve got a legal resident with parents who are undocumented. … It’s not as easy as just saying ‘You should go back.'”

Meanwhile, Hernandez tries to progress with his life goals while dealing with limitations few 20-somethings could imagine.

He receives dialysis three times a week at a Reno clinic. Tuesday, Thursday and Saturday, Hernandez gets up at 4:30 in the morning so he can arrive at the dialysis clinic for his 5:30 a.m. appointment. He spends 2 hours and 45 minutes in dialysis before going home. After lunch he is typically so exhausted that he naps for a few hours.

He is studying for the General Educational Development test, and would like to eventually attend culinary school to become a chef.

“I was so happy when I first heard of deferred action, because I thought I would be able to get insurance that would help me live,” Hernandez said. “I want to be healthy and lead a normal life, like anyone else. So, of course, I was disappointed to hear that they won’t let us get insurance. I’m still hopeful that they will talk about immigration reform and in the next year or two something will change.””