A story that appeared earlier this week deserves much more attention, and discussion, than it has received so far. The healthcare-policy journal Health Affairs published a study based on a survey of bankruptcy filings in five Federal court districts.
Abstract (emphasis added):
In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them. About half cited medical causes, which indicates that 1.9–2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick.
(See also the Letters posted so far in response to this article.)
Since the vast majority of insured Americans get their medical coverage through their jobs, it can (and does) disappear if you become too sick to work and your COBRA coverage (assuming you can afford it in the first place if you're not working) runs out.
And even with insurance coverage, a serious illness can leave you thousands of dollars in the hole, from co-payments, deductibles, and non-covered expenses.
When my wife got sick several years ago (thank God, she's doing just fine now) we had several thousand dollars in bills for medically necessary treatment that the insurance companies--and we had very good insurance at the time--simply refused to cover.
My parents, God bless them, have been dealing with chronic illnesses and insurance companies for years, and I have learned a little something by watching them operate. I have never been one to take a refusal from some pissant low-level insurance company clerk as a definitive answer, and was ultimately able to cajole and browbeat the insurer into covering a not-insubstantial fraction of the unpaid amounts, but for the most part we just had to grit our teeth and cut some checks. It took some time, but everybody got paid. And we were damned lucky to be able to do that.
Article comments
1 - Aaman
Excellent post - thank you for reporting from the 'other' frontlines - the social ones.
How comparable is the 'fraternal group insurance' to corporate insurance?
2 - Barry
Aaman, in my experience, the "professional/fraternal group" insurance was the only kind we were able to afford, as a practical matter, given our health histories. The key thing is that you get access to insurance this way at a group rate, not the much higher rate you would generally have to pay if you contract with a health insurance company as an individual or couple.
The group insurance we were able to get was still expensive (roughly $400 a month for the two of us) and had a high deductible and high co-pays... much higher than the plan we had through my previous employer. Still, we had to have it, and were grateful to get it; we hung onto it until we had access to an employer-provided plan.
3 - Aaman
Wow - that's what I pay for all-inclusive, knock-yer-socks-off family insurance with my employer (total cost I guess is abt $1300) - they are exploring PSAs - have a survey up.
Something wrong with society when the middle-class (the 'have-somes') are insecure and squeezed. THat has not been without consequences historically.
4 - Roy Smith
The push for medical Personal Savings Accounts and individually purchased catastrophic coverage threatens to make this trend even worse, not better. Another example of how Bush and company have it in for the middle class. You know, in Europe they have this crazy idea that healthcare is a basic right of a citizen. Europeans are typically healthier and have longer life expectancies than Americans.
5 - SFC SKI
Your article addresses a significant problem in America, as well as the group of people most likely to be affected by it. It does seem shameful and absurd that a working family in this country really has to make serious choices and sacrifices to get health care, and still the care you get can be based purely on a financial equation. It is an issue that needs to be addressed, but I don't have too many ideas as to how.
The Europeans pay a higher tax rate for their healthcare, but it is true that getting sick, at least in Germany, will not put you in the poorhouse.
6 - Natalie Davis
Another reason to laud Canada. Its system isn't perfect, to be sure, but it is vastly superior to the unequal health coverage available in the US. My insurance -- quite literally, it appears -- may be the death of me. I am trying to recuperate from pneumonia using only half of the medication the doctor prescribed. Simply can not afford the rest, even with a prescription plan. So maybe my health will improve, and maybe it won't. Or what will happen is what happened when I had a respiratory infection last November. I will get a bit better-- or seem to -- and the illness will lie dormant until it regains strength and pushes me into a relapse (or worse, as in this case) months later. Dying would be easier. Certainly it would be cheaper.
Imagine, one can work more than full time for an employer and *still* not be able to afford to use the inadequate insurance the company provides. Something has got to be done, because the US health-care and -insurance system is clearly in critical condition.
7 - Dave Nalle
>>Another reason to laud Canada. Its system isn't perfect, to be sure, but it is vastly superior to the unequal health coverage available in the US.<<
Except for the part where you die while waiting 6 months for a basic diagnostic test.
Dave
8 - Roy Smith
Europe has a higher life expectancy, lower infant mortality, lower rates of heart disease and cancer, and health insurance that covers every person - all for about half as much per capita as the United States spends.
Canada spends less than 10% of its GDP on health care and the United States spends almost 15%. Canadians also enjoy higher life expectancy and lower infant mortality than citizens of the United States.
What are we buying with all the extra money we are putting into our health care system? Lots of extra bureaucratic healthcare overhead that doesn't exist in other industrialized countries and fat profits for the healthcare industry. We also get the fun distinction of being one of the few industrialized countries that hasn't figured out how to provide health coverage to all our citizens.
9 - Sydney
>>Another reason to laud Canada. Its system isn't perfect, to be sure, but it is vastly superior to the unequal health coverage available in the US.<<
Dave says;
"Except for the part where you die while waiting 6 months for a basic diagnostic test."
Dave, That's a problem that is being addressed in Canada as we speak. There are long wait times in some provinces but lets look at the American Alternative.
In America, for many it doesn't matter if we can afford the diagnostic tests because, effectively it's only use would be to tell us what we're going to die from.
In Canada it's free coverage for all. Even a bum on the street gets his cancer treatment and medication. Thats a principle to stand for. Some Americans hear of this and burst into laughter; "Socialism! what a joke!".
Time to acknowledge that the American health care system is in dire straits. It's not remotely equitable.
10 - Barry
Personally, as someone with basically conservative views, I'm not wild about the single-payer/National Health insurance model as a solution to U.S. healthcare problems.
But as someone who has seen the workings of the current US health insurance system up close and (entirely too) personal, I have no hesitation about calling it out as grievously broken.
To be perfectly honest, I expect that health care delivery reform, when it comes, is more likely to come from the Republicans than the Democrats, based on a sort of "only Nixon could go to China" logic.
I don't buy the notion that Bush et al "have it in for the middle class"... Newt Gingrich, of all people, has a provocative new book out about ideas for health care reform (linked above) that I'm working my way through, and it's resoundingly populist.
The Health Affairs article identified three or four major problems with the current system:
-- Gaps in healthcare coverage can be financially lethal;
-- So-called "major medical" coverage often isn't; in other words, it leaves you with thousands of dollars in uncovered expenses, so you're not getting what you think you've contracted for;
-- You can lose your health coverage when you lose the ability to continue working, and
-- Basic health insurance plans do not include private disability coverage; in other words, not even partial replacement for loss of income while unable to work. Ditto, coverage for long-term care, which can bleed you dry very quickly.
Having personally experienced several of these issues (as noted above), I have tried to arrange our affairs so that we are protected to the extent possible; e.g. we now have private disability and long-term care insurance, so we hopefully will never become dependent on the tender mercies of Social Security Disability and/or Medicaid/Medicare.
Providing cost-effective access to this kind of coverage will do a lot towards curing the inequities in the current system.
But the problems posed by coverage gaps, and with the failure of insurance companies to cover medically necessary expenses and act in good faith, are structural and deep; they have to do with the way most Americans get their insurance and how insurance companies manage their claims. They present a real policy challenge, but something that desperately needs to be addressed.
11 - Roy Smith
Barry:
Just out of curiosity, what percentage of income does it take to inoculate yourself against the shortcomings of our health insurance "system"?
This is a serious question, not a jab - I am thinking about trying to make the same sorts of arrangements for my family.
12 - Barry
Roy,
I am not an insurance expert, but this is my current experience:
If you are fortunate enough to be able to buy additional disability coverage and long-term care insurance through your employer (an incomplete "inoculation" but very much worth it IMO) the premiums may amount to no more than an additional $35-40 or so a month, depending on a host of factors ranging from your current age to where you live, etc. Check with your HR folks to find out what's available.
If you have to contract privately/individually for this coverage, I really have no idea, but I bet it costs a hell of a lot more.
13 - Diet Doc
There is absolutely, positively, emphatically got to be something done about health care in America. This from a medical doctor in the trenches of primary health care (Internal Medicine) for the past 25 years. Every day I see Medicare recipients almost cringe when they require a new drug prescription or even have to fill the ones they have. Every day I see young couples with small children calling in to see if I will "just call them something to the drug store" for a possibly serious symptom that cries out for medical evaluation to rule out serious conditions. (e.g. "I have just been coughing up blood for a few days. It's not much, just streaks. Could you call me in something for a cough?")
Now, I am in the primary care business, specifically meaning, I am not one of those ubiquitous "rich" doctors. I kinda like it. Having "grown up" practising socialized health care in the U.S. Army for 12 years, I honestly never had aspirations to "get rich." I'm totally fine with it. I was born middle class and will contently die middle class. I love what I do.
However, there are three segments of medical care that need to be addressed, as I see it.
First, hospitals need to be reeled in. There is much too much duplication of services (every hospital does not need an MRI, or laser coronary surgery, etc.). Duplication of services leads to higher hospital charges to support the expense of these facilities. the $5 bandaid and the $15 dose of Tylenol has to be controlled.
Second, subspecialist need to be reeled in. Yes, I know, I am pointing to another segment of physicians and away from myself. But, clearly, the "cataract mills" that crank out 10 cataract extractions per day (30 minutes per procedure, tops) that charge $2500 per procedure is just too much. Yes, subspecialist need to be adequately for the expertise and skill but there have to be limits.
Thirdly, pharmaceutical companies need to be capped in some form or fashion. Perhaps one way to start is to limit patents on new drugs to 2 years instead of seven. Right now, when a company releases a drug, they have 7 years to charge whatever they like before generics can enter the marketplace. I remember well when Prozac (fluoxetine) came out. It was $2-3 per capsule, $60-90 per month for its minimal dose. Now, with generics, I can buy 100 fluoxetine 20mg capsules for 7 dollars. I know pharmaceutical companies have huge developmental costs for drugs and one one per [fill in the drug company industry number here] actually make it to market, but profit gouging has to be stopped or cut back.
OK, I have ranted enough. This has been a "hot button" issue for me for some time. I see the profession I truly love becoming something entirely flawed. I think the health of America's citizens is much more important that having a new Mercedes (I drive a Honda Accord, BTW) to drive every year. HMOs did not work. If you want to do something about "Tort Reform," cut back costs of health care and rid the public mind of the idea that "all doctors are rich." All doctors are not counting their stacks of gold bullion before going to be. It's time to try something else.
Cheers,
Ron
14 - Roy Smith
Why didn't we hear about the President's plan to fix healthcare (a crisis the country is undergoing now) in the SOTU address, rather than the President's plan to fix Social Security, which is over 30 years from even approaching a crisis? Some kind of ideogically axe to grind, maybe?
15 - Eric Berlin
Barry - Great, timely, scary post. All I can add to the discussion is the agreement that "something needs to be done" and share my own experiences.
My wife is a full-time per diem RN at our local hospital's ICU. She gets no benefits. Over the last four years, I've had lengthy periods of unemployment, though with periods of part-time, contract, and freelance work. I just completed a two-year run in graduate school. Thanks to the Gods that neither of us had any major medical expenses during that time. We pay out over $300 / month for catastrophic coverage, yet still must pass $2,000 in medical expenses to meet a premium. The result? The only time we've needed health care in the last year came over the holidays when my wife got a terrible case of food poisoning. The upshot was over $600 in charges for a brief visit to the ER.
Thankfully, I just landed a good, stable position that will allow both of us to receive better coverage. I feel that we've managed to weather the storm and are now somewhat protected. But for how long?
My parents had foresight and began paying out $5000 + annually for long-term health coverage some years back. Over a year ago, my father became extremely ill and now requires full-time in-house medical care. Without this coverage and his VA eligibility, my mother would have likely lost the family home and be forced into bankruptcy.
Nearly everyone agrees that something has to be done.
Bill and Hillary Clinton were nearly universally derided for trying to enact large-scale changes to the health care system.
Who's laughing now?
Eric Berlin
Dumpster Bust: Miracles from Mind Trash
16 - Roy Smith
Since somebody is sure to raise the issue, I would like to make it go away before it gets started:
MEDICAL MALPRACTICE INSURANCE COSTS ARE NOT THE REASON THAT HEALTHCARE COSTS IN THE UNITED STATES ARE EXPANDING OUT OF CONTROL.
Hard to find exact percentages in a brief internet search, but these make the point:
Total malpractice insurance premiums in the United States annually: somewhere around $7-8 billion dollars.
Total costs of "defensive medicine": maybe $20 billion dollars, but depends a lot on how it is counted.
Total Americans spend on our health care system annually: $1.4 trillion dollars (or $1,400 billion)
Malpractice insurance costs are less than 0.5% (i.e., 1/200) of the total cost of health care.
The most important thing President Bush has been able to come up with in health care policy is to cap liability awards for malpractice suits in the hopes that it will lower premiums. It looks to me as though that will do about nothing to make health care more affordable, will do nothing to increase availability to non-insured individuals, and will do nothing to improve quality of care.
P.S. If somebody can provide some better figures on the costs of healthcare and of malpractice insurance nationwide, I would love to see it. The ratio seems low even to me, but maybe that is just because of the amount of output the Republican Noise Machine has produced on this issue.
17 - Eric Berlin
Roy - I thought John Kerry actually made your point fairly well during the debates and generally throughout the '04 presidential campaign (when he wasn't drowned out by circumstances, national security talk, Swift Boat ads, and on and on).
But people seemed to be happy with Bush (a small majority, anyway) and thus we're left with the status quo.
Oh, and of course the big insurance companies will have an even easier time denying claims when they know there is a firm cap on liability awards.
18 - Diet Doc
Roy Smith writes:
"MEDICAL MALPRACTICE INSURANCE COSTS ARE NOT THE REASON THAT HEALTHCARE COSTS IN THE UNITED STATES ARE EXPANDING OUT OF CONTROL"
Reply:
All I can say is that, for the first time in 25 years of practice, my malpractive premiums went up 33% this year. And this from a physician that really does nothing "invasive" and practices primary care (Internal Medicine) health delivery. I do know, personally, that premiums for obstetricians ("baby catchers," as we call them) and invasive surgery subspecialties (e.g. neurosurgery) are skyrocketing.
I also must state that a cap on ridiculous claims ($100 million for a botched delivery) are excessive. I also clearly understand that a lot of these claims are from a small percentage of the medical profession; repeat offenders, if you will. Malpractive premiums, liability awards, and judgement/procedural errors will continue in my profession until the medical boards, themselves, do something to clamp down on this small percentage of physicians.
The medical board in each state needs to identify "repeat offender" physicians that are clearly (being P.C. here) "procedurally or judgementally challenged" and revoke more licenses that they do. But I digress.
I am, likewise, sadly aware that leaving medical boards in charge of physician licensing is...well, the fox in the henhouse story.
Cheers,
Ron
19 - Donnie Marler
The large insurance companies spend millions on lobbyists in Washington to prevent or limit reform.
When I was a union officer negotiating contracts one of our major sticking points each time was the cost of insurance. Our men had worked safer, we had far fewer on-the-job incidents, we had even won a prestigious safety award for going over one million safe man hours underground, a nearly unheard of safety standard. Our reward? The insurance company wanted to raise premiums over 35%. The Union and Company together decided there was no way. We agreed to drop the provider and become self insured. It cost us a bit more out of pocket, but we had control over a large portion of our costs and could control increases. The bottom line? We provided 90/10 family coverage at a cost of $22.75 a week with a $500.00 deductible.
20 - STM
These kinds of horror stories are one of the things that frighten me about the US.
For those of you who have never lived in a country with universal free quality medical care, let me tell you: it means absolute peace of mind.
At the end of the year, on top of my taxes, it costs a couple of grand (I am in the top tax bracket and it goes down accordingly depending on what you earn). I also pay $25 a week health insurance of top of that (covering my whole family), which gives me private hospital care and doctor/doctors of my choice.
With a serious illness a few years ago requiring three lots of surgery in a private hospital, my out-of-pocket costs were about $100.
I also had extensive paid sick leave (thrashed out over a century of collective bargaining under both state and federal industrial awards), along with seven-weeks-a year paid leave that I could use if I ran out of sick leave, plus long-service leave of about 12 weeks.
And if the worst came to the worst and I was suddenly unable to pay my health cover, I would receive pretty much the same quality health care.
While my taxes are higher than they would be in the US on the same wage, they do a bit more for me (and my countrymen and women).
All of it adds up to a fantastic safety net.
Consider this: if the US reduced its defence budget by 5 per cent, it would have the best universal free health care system in the world.
Worth thinking about. After all, it should be up to us - the people, of whatever country - who decide to what use our tax dollars should be put.
Some of these things are at risk under our current government, and they are now looking a big chance to go at the next election.
The two things most Aussies expect from a government are free medical care and arbitrated industrial awards that take power out the hands of employers who might misuse it.
The two things ARE connected. You can't be sacked here for being sick.