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PCN Enrollees

Utah’s Primary Care Network created pool of Underinsured—
causing the cost of their care to be shifted onto the fully insured and limiting patients’ recovery.

PCN Lacked Critical Hospital Care Coverage

When Karlene came down with pneumonia a couple years ago, she got so sick that she needed to go the emergency room. She was quickly admitted to the hospital and spent the next 4 days receiving life saving treatment. Fortunately, she recovered quickly and was able to go straight back to work. However, in those entire 4 days, no one mentioned to her that her insurance coverage through Utah’s Primary Care Network (PCN) would not cover a single dime of her hospital stay. To cover the cost of her uncovered care, she had to negotiate with the hospital to donate much of the cost of her care.

Then last year, Karlene came down with pneumonia yet again. She went to the emergency room, but refused to be admitted because this time she knew PCN would not cover the cost of her care. The doctors made her stay in the ER until the oxygen levels in her blood reached 80%, but then she left as soon as she could. PCN covered her ER visit, along with her prescriptions. However, instead of recovering in 4 days, Karlene was sick for the next 3 months. “I had no energy and never felt good. It was so much harder to work,” explains Karlene. “I have fully recovered, but it took a lot longer, and I was not as productive at work as I could have been if I had been able to access in-hospital treatment,” says Karlene.

Policy Solution: The Patient Protection and Affordable Care Act Defines a Minimum Standard of Coverage

Karlene characterized her coverage through Utah’s Primary Care Network (PCN) as “better than nothing, but if you get sick it is bad.” The PCN helps individuals earning less than 100% of the poverty line and parents earning less than 150% of the poverty line access primary and wellness care. However, it does not provide adequate coverage for its enrollees. One indicator that Utah has successfully implemented health system reforms will be when the PCN is replaced with reasonable coverage.

Being underinsured—whether through a private plan or a public insurance plan like the PCN—is a growing crisis in America. The PCN is a shortsighted solution to the health care crisis because it institutionalizes the growing problem of underinsurance. It makes us feel like we’re doing something about a serious problem when all we’ve really done is shift costs to other parts of the system. Thus in turn raises premiums and other costs for all payers, further destabilizing the private market.

To end this, the Patient Protection and Affordable Care Act is designed to provide access to affordable coverage to families and individuals like Karlene who previously were in a position where very little protection was available.  In specific, the heath reform bill will increase coverage, create state-based exchanges that would offer affordable coverage, and provide subsidies to help pay for that coverage. The new bill will:

  • Expand coverage to 32 million Americans who are currently uninsured.
  • The uninsured and self-employed will be able to purchase insurance through state-based exchanges with subsidies available to individuals and families with income between the 133 percent and 400 percent of poverty level.
  • Separate exchanges will be created for small businesses to purchase coverage -- effective 2014.
  • Funding will be available to states to establish exchanges within one year of enactment and until January 1, 2015.
  • Individuals and families who make between 100 percent - 400 percent of the Federal Poverty Level (FPL) and want to purchase their own health insurance on an exchange are eligible for subsidies. They cannot be eligible for Medicare, Medicaid and cannot be covered by an employer. Eligible buyers receive premium credits and there is a cap for how much they have to contribute to their premiums on a sliding scale. (Federal Poverty Level for family of four is $22,050)