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First of a two-day series

NAU freshman Janice Bacigalupo, 18, is considering dropping out of college to pay for surgery.

The nursing student lost state-provided insurance formerly provided to her family after her father died recently.

She has unexpectedly remained uninsured due to a mistaken rule interpretation by a health benefits worker, and her mother has no insurance coverage to offer.

Bacigalupo began having pain in her joints a couple years ago that moved to her abdomen, her kidneys and her gallbladder.

Doctors now agree she is having kidney problems and needs the gallbladder removed. But after a battery of expensive tests and hospitalization, Bacigalupo now has a hospital bill in excess of $20,000, and no way to pay for surgery.

"I'm an 18-year-old student. I don't have $10,000, let alone $20,000," she said.

Bacigalupo applied for Arizona's version of Medicaid, AHCCCS, before the major problems began but was declined.

The person at North Country HealthCare who told her she was ineligible might have made an error, but she also might be stuck with the bill.

Things would be different for Bacigalupo under the federal legislation passed in March.

If her mother had insurance to offer, Bacigalupo could be on it today and through age 26.

And if this were the year 2014, Bacigalupo would be required to buy insurance individually, or pay a fine. Discounts based on income would be available.

Under health care reform, she would likely have been covered by AHCCCS long before landing in the hospital.

It seems today, too, that Bacigalupo would fit the criteria for the state's Medicaid program, which provides health insurance for low-income residents.

She has scholarships that cover her tuition, food and housing, but no job.

"They told me that I was denied for income, and that confused me because I don't have any income. The lady told me I was denied for having scholarships," Bacigalupo said.

An AHCCCS spokeswoman said that Bacigalupo was not denied by their agency, but that if she failed to submit the right paperwork because she was given bad information, the bill is likely hers to pay.

Billing staff at Flagstaff Medical Center have sent Bacigalupo's account to collections.

For Medicare patients, broader coverage

--Name: Beverly MacAllister

--Age: 81

--Occupation/work situation: retired

--Health situation(s): healthy until this year, no chronic conditions

--Family situation (kids, marital status): single

--Insurance situation: Medicare

--Insurance/health costs today: estimated at $5,000 to $6,000 this year, or about half MacAllister's annual income.

--Insurance/health costs would be: typically lower in the future if these levels of problems repeat, particularly if MacAllister qualifies for Medicaid

* * *

Beverly MacAllister, 81, was completely healthy until this year, when she developed a rare infection in the bones near her right ear. Her eardrum ruptured suddenly one day, and this left her dizzy, nauseated and in pain.

"It's been devastating. My eardrum ruptured in the middle of the night, and I've been sick ever since," she said.

Four types of antibiotics didn't defeat the infection, so now she's receiving intravenous antibiotics daily for a month during visits to Flagstaff Medical Center, and expecting to pay $100 daily for those hospital visits.

That doesn't include some costs to see specialists who are out of her insurance network.

MacAllister lives on Social Security.

"I just told the hospital, 'when we're finished, bill me and I'll pay it.' I don't know exactly how," she said.

Caseworkers with Medicare called MacAllister and combed through her bills to find an emergency room charge that was hundreds of dollars more than what her insurance contract allows.

Next it's up to MacAllister to negotiate with the hospital's billing department.

Seniors here are sometimes surprised to find that Medicare doesn't cover all they thought it would and that there are a lot of out-of-pocket expenses, said Raena Honan, who helps Coconino County seniors.

One analysis from a few years ago found seniors were spending 16 percent of their income on health care, and that the figure was growing.

Under the legislation approved in March, Medicare is changing in providing more preventive care at no charge to patients. But that wouldn't likely help MacAllister, who sees a non-covered naturopath for annual checkups.

One option for MacAllister is to apply for both Medicare and Medicaid, or AHCCCS.

Medicare covers retirees.

Medicaid can cover what Medicare doesn't pay, for people with little income.

Though it still wouldn't likely cover visits to her naturopath, individuals now making $14,404 or less this year (133 percent of the federal poverty level) would be in the ballpark to qualify for Medicaid in the years to come under the new legislation.

Under the newly expanded income limit, MacAllister would likely qualify.

For self-employed, lower premiums

--Names: Michael P. Ghiglieri and Susan Ash-Ghiglieri

--Age: he's 63, she's 61

--Occupation/work situation: working, self-employed

--Health situation(s): both healthy

--Family situation (kids, marital status): married

--Insurance situation: high-deductible plan covers medical costs after they pay $7,500 apiece in a year

Insurance/health costs today: $15,600 last year, with one health incident that resulted in a large bill. That figure includes $8,817 spent on health insurance premiums.

--Insurance/health care costs would be: closer to $9,500 for insurance premiums under the new legislation, if government subsidies are considered, with a higher percent of his health care costs covered by insurance and likely a lower deductible. But his deductible and maximum annual medical costs are not known.

* * *

The Ghiglieris are healthy, except for an emergency room visit to Flagstaff Medical Center for Michael that resulted in a bill in excess of $7,500 last year. He's disputing that bill.

Likely because of their ages, they each pay more than $500 monthly in insurance premiums for a policy where insurance doesn't begin paying until they pay a $7,500 deductible.

He gets some assistance covering that cost from a seasonal employer, however.

By 2014, when the bulk of the new insurance provisions begin, this pair will become eligible for Medicare.

If that were not the case, they would qualify for federal subsidies covering part of their insurance premiums.

One physician's view

Mark Rader was a practicing obstetrician and gynecologist in Arizona until recently. He and his wife plan to move back to Pennsylvania.

His views on the health care legislation are nuanced -- he's been a caregiver for someone who needed medical care but couldn't get it, and also a physician sued by patients.

"The medical care system of this country is broken. It's broken. And it falls back on the responsibility of every citizen of this country," he said.

Rader took a pay cut when he moved from Pennsylvania to a mission hospital in Ganado, then later to Flagstaff, but his malpractice insurance was covered by his employers here, so it was almost a wash.

The insurance that covers doctors in case a patient sues comes to a cost of $60,000 a year here and sometimes $100,000 or more.

In all, Rader said he wanted better funding for family physicians, more limits on lawsuits, and some mechanism to give patients a better understanding that it is sometimes up to them to participate in fixing what's wrong with their health, when it's fixable.

He's been a physician since 1975, and he says that in that time he's had to fight harder with non-medical staff at insurance companies. He's also seen his colleagues in private practice squeezed financially.

"And part of that business outlook has to do with the fact that the monies were not forthcoming as well from insurance companies, and it was harder to get payment for the work that you did," he said.

Rader went to bat for one patient not long ago who had fibroids in her uterus, which are common, and typically not dangerous.

But in some cases, like hers, they could lead to severe bleeding, anemia, and disability that would leave a woman unable to work.

The woman needed a hysterectomy, but her insurance would not agree to cover it.

Rader wrote a letter to the insurance company explaining her case.

The insurance company denied her again.

As he left his Flagstaff practice, she was trying to figure how to pay for it on her own.

"It never came home so personally to me before that patient," he said.

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