Estimated 200,000 People To Lose Health Insurance Coverage After Hurricane Katrina

Main Category: Health Insurance / Medical Insurance
Article Date: 04 Jan 2006 - 13:00 PDT

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The Chicago Tribune on Thursday examined the continuing toll of Hurricane Katrina as "[t]ens of thousands of people struggling to recover ... are learning what it means to slip into the ranks of the uninsured and how hard it can be to climb out." Blue Cross and Blue Shield of Louisiana estimates that 200,000 state residents who had health insurance through an employer will lose those benefits as cash-strapped companies cut staff or go out of business. According to experts, it is one of the largest groups to lose medical coverage because of a single event. Prior to the hurricane, 866,000 of Louisiana's 4.4 million residents were uninsured, partly due to high poverty rates and lower-than-average rates of employer-sponsored coverage. The rate is expected to worsen because it is anticipated that few newly unemployed people will decide to buy their own insurance policies, while those who still have jobs might see benefit cuts. A rule imposed by state officials that insurance companies keep medical policies active even if premiums had not been paid expired in November 2005. Now, insurance companies are preparing to cancel policies if premiums are not paid. In addition, "health insurance churning" -- in which displaced workers move in and out of temporary jobs, some with health insurance benefits and some without -- is increasing, according to the Tribune. In addition, New Orleans' health care system is not prepared to take on the burden of the uninsured as eight local hospitals are closed and thousands of doctors have left the area. One of the only options state officials have is to wait for federal help, the Tribune reports. Fred Cerise, head of Louisiana's Department of Health and Hospitals, said, "What these hurricanes have demonstrated is that having insurance for most adults is only as good as having a job, ... and that relationship can be tenuous." Gery Barry, CEO of BCBS Louisiana, said, "We have exhausted what we can do to keep people's insurance in force, and we are very concerned what will happen next" (Graham, Chicago Tribune, 12/29/05).

Evacuees Add to State Health Care Costs
Officials in Texas, Georgia and other states face "daunting" questions about 2006 health care and other costs for the hundreds of thousands of individuals displaced by Hurricane Katrina, the Los Angeles Times reports. Georgia officials have said that state health care and education costs could increase by $100 million in 2006 in the event 44,000 hurricane evacuees decide to stay. In addition, Texas officials have said that state costs could increase by $550 million in 2006 in the event 400,000 hurricane evacuees decide to stay. The Federal Emergency Management Agency likely will reimburse states for many costs related to hurricane evacuees, but state officials remain unaware of the amount of funds that they will receive and when they will receive them. According to the Times, more "vexing for budget planners is uncertainty about the evacuees: How many will stay in their adoptive states, how many will find work and become self-sufficient, how many will continue to need public aid -- and for how long?" Texas Homeland Security Director Steven McCraw said, "We're not being mercenary about this, but we want to bring it to the attention of Congress and the administration." McCraw added, "We never envisioned, nor had we planned on, taking nearly half a million people into our state virtually overnight." States with fewer hurricane evacuees also face problems. About 166 hurricane evacuees were airlifted from New Orleans to Omaha, Neb., and Eastern Nebraska Office on Aging officials said that they have spent most of the office reserve fund for ongoing services to evacuees. ENOA Director Beverly Griffith said, "We don't feel it's right to bring them into our community and then not give them ongoing support." Barton Smith, director of the Institute for Regional Forecasting at the University of Houston, said, "I think it's almost guaranteed that those who stay will be those with the least economic opportunity ... the people who don't have anyplace else to go" (Simon, Los Angeles Times, 1/1).

Additional Coverage

• Contra Costa Times: Seven of 10 Hurricane Katrina fatalities in the New Orleans area were older than age 60, and almost half were older than age 75, the Contra Costa Times reports. Orleans Parish Coroner Frank Minyard said that about 20% of fatalities autopsied died from drowning and that many died for reasons related to the "stress of the storm" (Simerman, Contra Costa Times, 1/2).
  


• Wall Street Journal: Chalmette, La., a suburb of New Orleans, was covered with floodwater and a 1.1 million gallon oil spill after Hurricane Katrina, the Wall Street Journal reports. Although local officials have said that residents can return, the Environmental Protection Agency has not determined the safety of affected homes and has said that it does not have the authority to decide whether the area should be resettled (McKay, Wall Street Journal, 1/3).

Chicago Tribune

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