Reuters Money

The new GOP-led House of Representatives took initial steps last week to pass legislation repealing the new healthcare reform law, with one senior legislator calling it “an economic and fiscal disaster of unprecedented proportions.”

Donna Kent-Croushore is experiencing disaster of a different kind.

Kent-Croushore lost her family’s health insurance last November when her employer for the past 27 years in Plymouth Meeting, Pennsylvania, went out of business. She spent most of the holiday season scrambling to find coverage for herself and her husband, Rick Croushore.

The couple’s story illustrates how quickly people who consider themselves well-covered can face skyrocketing health insurance costs that, in turn, threaten their overall economic security. And it shows how the new Affordable Care Act (ACA) will help people like Donna and Rick — assuming that legislative and court challenges don’t eviscerate the new law.

Kent-Croushore had been a director of account management for a publishing and printing company that she joined fresh out of high school as a proofreader. The business succumbed last fall to growing offshore competition, and since the company no longer existed, COBRA health insurance wasn’t an option.

Donna is 58, and Rick is 64. They’re too young to qualify for Medicare, and Rick has a serious pre-existing condition that makes shopping in the current market for individual insurance policies a nightmare. He suffers from COPD – a common lung disease that in Rick’s case is tied to emphysema. He’s been hospitalized for the illness and has been on an expensive year-long drug treatment regimen with no end in sight.

Rick no longer works and had carried on Donna’s group policy at work. While Donna knew that Rick’s pre-existing condition would be an obstacle to getting replacement coverage, she was surprised to learn that insurers didn’t look at her much differently. “I started getting turned down because of a herniated disc in my neck ten years ago, and some arthritis in my thumbs. I take Motrin when it hurts and go on about my business. I can’t open jars any more, but according to the insurance companies, I’m too risky for them to take on,” she says.

The best coverage Donna could find was a policy for high-risk people with pre-existing conditions. It carries a sky-high monthly premium of $1,600 and an equally-high $5,000 deductible. That shaky, expensive coverage will have to carry them over until Rick turns 65 and qualifies for Medicare in November.

“Our financial adviser has been spending half of his day all this week on the phone with insurance companies for us and a few other clients, trying to find us a decent policy,” she says.

Kent-Croushore’s story underscores just how much older Americans have at stake in the new healthcare reform law. The ACA will make health insurance nearly universal across all age groups by 2014, but the law is especially helpful to older people who are more likely to suffer from chronic pre-existing conditions.

A study released last month by The Commonwealth Fund found that the number of Americans without health insurance age 50 to 64 grew by 1.1 million in 2009. The report found that 8.6 million Americans in that age group were uninsured last year — 15 percent of the total. Meanwhile, another 9.7 million in this age group had coverage with such high deductibles that they were considered “effectively underinsured.”

Commonwealth found that a whopping 6.8 million of these uncovered adults will gain subsidized coverage when the ACA becomes fully operational in 2014 – 3.3 million through the expansion of Medicaid, and 3.5 million through the new private insurance exchanges that will be created in each state.

In the meantime, pre-existing condition insurance plans (PCIP) plans have been created in every state for people like Donna who don’t have group coverage and suffer pre-existing conditions. The Pennsylvania PCIP is one of the best in the country, with a flat monthly rate of $283 per enrollee — for a person of any age — with an annual $5,000 in-network, out-of-pocket limit.

“Pennsylvania’s plan has the highest enrollment in the country because they set such a reasonable premium,” says Jean Hall, an associate research professor at the University of Kansas, and author of a report on PCIPs for the Commonwealth Fund. Hall says 1,657 residents were enrolled as of late last year — a good chunk of the 8,000 enrolled nationally. She credits Pennsylvania’s relatively quick ramp-up to the fact that the state already had an insurance program for low-income individuals — many of whom had pre-existing conditions — before ACA’s passage; that plan already had a waiting list of 400,000.

Unfortunately, the new PCIPs are available only to people who have been without coverage for six months, which means Donna will have to wait until this May to apply. Commonwealth reports that nearly 160,000 Pennsylvania residents could be eligible for the Pennsylvania PCIP.

In the meantime, Donna says the couple’s health insurance problems threaten their long-term retirement security. She plans to tap into her 401(k) savings to help pay the huge health insurance premiums and out-of-pocket costs. Rick filed for Social Security at age 64 – before his full retirement age of 66 and a year earlier than he planned. Donna currently is receiving unemployment insurance benefits, and now expects to file for Social Security as early as possible, when she turns 62.

“This runs against everything we worked hard for all our lives and saving for retirement and having good health insurance,” she says. “Now, I’m in the ranks of the unemployed and could be facing a financial disaster.”

Photo: Donna Kent-Croushore and Rick Croushore in an undated photo. REUTERS/Handout