NEW PORT RICHEY
Kala and Kevin Hamilton never aspired to be wealthy, but they thought that with two jobs they could hold onto what they had: a modest house with a yard, credit cards they rarely used, the occasional luxury of going on vacation and staying in a hotel. They began losing their grip on that life five years ago, on the happiest of occasions, the birth of their third child. Willow had a disorder closely related to tuberous sclerosis complex, an incurable genetic disorder that causes benign tumors to grow on her organs, including her brain and heart. Six months in and out of the hospital, twice-weekly doctor visits and expensive medications all added up to $70,000 in medical bills — and that was with insurance. The Hamiltons lost their home and moved into a relative's place. They found themselves the beneficiaries of candy sales at school drama productions. Now, they are considering bankruptcy.
"It is a disappointing feeling, like we're giving up," said Kala Hamilton, 35, a teacher at Odessa Elementary School. "But we don't have any other option."
The success of the Affordable Care Act, better known as Obamacare, will be measured in large part by how much it helps people like the Hamiltons. The act's centerpiece, the online marketplaces where millions will seek affordable insurance, opens for business Oct. 1.
Whatever you think of the law, it's hard to disagree on its roots: Health care costs are enormous, and even downright ruinous. Numerous experts have noted that the United States is the only developed nation where citizens go bankrupt over health costs.
In addition to providing new coverage, the law also limits patients' annual out-of-pocket spending, abolishes lifetime benefit limits and ends insurance discrimination against people with pre-existing health conditions. Experts say Obamacare is a good start on medical debt, though far from a guaranteed fix.
"This really isn't changing that much for people on the one side of the aisle or the other to be so enthusiastic about, or pessimistic about," said health economist Bradley Herring, an associate professor at Johns Hopkins Bloomberg School of Public Health.
While requiring health coverage for most Americans is a historic change, the law preserves much of the current health care payment system. Most people will stay in employer plans, some more generous than others.
Despite the controversial mandate, many people still won't have insurance because they can't pay for it, and can't get help. Florida is among the states that refused billions in federal dollars to cover more low-income residents through Medicaid. A million Floridians who could have received benefits under that expansion will not.
And many of those who do get coverage may not be able to afford the out-of-pocket costs that insured Americans know all too well. While overall, out-of-pocket spending is expected to decline due to Obamacare, some people could experience sticker shock. Not counting premiums, out-of-pocket costs could run as high as $12,700 for families who purchase the lowest-coverage plans and then have more health issues than they expected. That's more than many families have socked away for emergencies.
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"It's really kind of a targeted effort to get a little over half of the uninsured covered," said Herring. "And it's doing it in a way that's not so radical."
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Nearly half of Americans ages 19 to 64 last year either did not have insurance or were underinsured, according to a survey released in April by the Commonwealth Fund. More than two in five adults reported problems paying their medical bills.
Such facts should surprise no one. The nation's hospitals report billions of dollars in uncompensated costs each year. Charity fundraisers for people with high medical bills are commonplace. A popular television series, Breaking Bad, is about a high school chemistry teacher who turns to cooking methamphetamine to pay for his lung cancer treatment — and few complain the premise is that far-fetched.
An influential 2009 Harvard study, whose authors include now-Sen. Elizabeth Warren (D-Mass.), blamed high medical bills for more than 60 percent of American bankruptcies. Other researchers say that study overstated the problem, suggesting health care bills were just part of the problem in some cases.
"I think the number of people who declare bankruptcy (solely) because of medical costs is relatively small," said Peter Cunningham, a senior researcher with the Center for Studying Health System Change. "But that doesn't mean people's finances aren't strained by medical bills."
Count credit card debt, lawsuits by hospitals and poor credit ratings among the other results of high medical bills, noted Jessica Curtis, director of the Hospital Accountability Project.
"It's something that has a residual effect for the patient," Curtis said.
So what will be the impact of Obamacare? Some 11 million people are expected to gain health insurance coverage in 2014, mostly through new state insurance marketplaces or expanded Medicaid in many states.
Out-of-pocket spending for individuals and families is projected to fall 1.5 percent in 2014 because of the new coverage and lower cost-sharing for people with improved coverage, according to an analysis of new federal figures by Health Affairs, a policy journal.
Hospitals' sticker prices have been especially burdensome to the uninsured, who get stuck with the highest bills because they don't have a government agency or insurance company negotiating on their behalf.
"That's going to be the big change and where we'll see the big decrease in debt," said Sara Collins, a vice president at the Commonwealth Fund, a private foundation that studies health care. "If you're fully exposed to health care costs, that's a big nut to crack."
As many critics note, Obamacare does not crack down on costs by, for instance, instituting price controls common in many countries. It does say not-for-profit hospitals may charge uninsured patients rates no higher than the "amounts generally billed" to those with insurance, though many experts say those regulations are too vague.
Glenn Melnick, a health care finance professor at UCLA, said California and some other states set firm limits on what hospitals can charge low-income, uninsured patients.
The Affordable Care Act is "a step in the right direction," said Melnick, "but I suspect in many parts of the country it's a baby step."
• • •
Kala and Kevin Hamilton both started working at age 15. Kala went on to teach autistic children. Kevin became a co-owner in the Hungry Howie's where he worked as a teen.
Kala had a good health plan from the Pasco School District, but the family decided it would be too costly — more than $800 a month at the time — to add Kevin and the children. He found a cheaper plan, with less coverage, for himself and the three kids.
When the insurer hiked the cost of covering Willow to $1,800 a month, the family took her off the plan and shopped around for another policy. No one would insure her. Medicaid eventually took her — but only after Kevin voluntarily took a pay cut to meet the income requirements.
During that period where Willow had no coverage, she landed in the intensive care unit. "Those months were all it took," said Kala.
Things would have been somewhat different had the Affordable Care Act been in place five years ago. The plan the Hamiltons purchased for Kevin and the kids likely wouldn't have been available since minimum coverage standards now are set for all plans. Insurers aren't allowed to discriminate against patients with pre-existing conditions, so Willow's illness wouldn't have caused premiums to spike.
The family would have owed no more than $12,700 a year under Obamacare rules — likely much less if they bought a higher-coverage plan.
Kala said she hasn't run the numbers and isn't sure whether her husband and their children may be able to get subsidized coverage on the marketplace. "We don't understand the changes," she said.
Indeed, as Obamacare gets under way, as millions of people seek better coverage, the Hamiltons are focused on another calculation. Kala recently learned that teachers are getting a small raise, so the family might earn a bit too much to keep Medicaid coverage for Willow.
"We're worried about a raise," she said, "which doesn't make sense anywhere but in our world."
Times researcher John Martin contributed to this report. Jodie Tillman can be reached at email@example.com or (813) 226-3374.