If you’ve been following the healthcare debate, you’ve probably heard that there are 45 million uninsured Americans in this country, and that 62 percent of bankruptcies occur due to medical expenses.
What you may not have heard is that there are 25 million Americans who pay for insurance but don’t have adequate and/or affordable coverage. And 80 percent of those medically-inspired bankruptcies are filed by people who have health insurance.
These people are known as underinsured, and were the topic of a hearing Thursday afternoon in the House Energy and Commerce’s Subcommittee on Oversight and Investigations, in its ongoing investigation of the health insurance industry.
The first underinsured witness to testify was Catherine Howard of San Francisco, CA. As a young, single professional working as a documentary filmmaker, she had to find low-cost insurance on the individual market. She found a plan that seemed “perfect for a young, healthy person.”
Then she was diagnosed with breast cancer and found herself $100,000 in debt because her low premium, high deductible plan only covered a fraction of the expensive cancer treatment. Rather than declaring medical bankruptcy, she decided to put it all on her credit cards and slowly pay it all off.
“I live like a pauper to pay for the privilege of surviving cancer,” she said, noting she pays $1,800 in medical bills each month. “I have made recovering from cancer my mission for the last five years. Now, my mission is to get out of debt. I think it will take me about seven years to pay off this debt, the same time it would take to restore my credit if I were to declare bankruptcy.”
The second witness was David Null of Garland, TX. As a self-employed, married father of two, he knew he had to get insurance coverage “for the big oh no,” as he called it. He was assured at his own dining room table by a licensed insurance agent that he made the right choice on a certain policy. It wasn’t until his seven year-old daughter Tatum slipped into a coma and was denied coverage for a life-saving liver transplant that he found out what a “worthless piece of trash” the policy was.
Thankfully the hospital waived the $200,000 deposit on the transplant, helped him and his family get on Medicaid, and Tatum’s life was saved. But the family had to cut their monthly income to $1,613. Null described the experience in his opening statement:
Interestingly, with Medicaid we never incurred any cost for her healthcare. We’re very lucky; we actually have no debt related directly to medical bills. The high cost of staying on Medicaid is on the backside, trying to survive financially on less than $20K a year. We took on tremendous debt, eliminated our savings and retirement and put our growth on hold trying to survive while she got the healthcare she needed. All because we didn’t get the insurance coverage we specifically asked to have.
Now that his daughter was blacklisted from ever receiving insurance on the private market, Null said the only way the family could get off Medicaid was for Tatum’s mother Sherry to go back to work as a teacher, qualifying them for group insurance.
“Individual policies and group policies exist in two totally different universes,” Null said. But that doesn’t mean the group insurance universe is any more equitable, as the next witness the subcommittee heard from could testify.
Nathan Wilkes of Englewood, CO tearfully told the story of when his child Thomas was diagnosed with severe hemophilia. Due to the high costs of covering Thomas, the insurance company that provided group policies to Wilkes’ employer forced the entire company to move to a more expensive, high deductible plan.
“The impact of the high cost of Thomas’ care was not just felt by me, but everyone I worked with,” Wilkes said. He told the committee about how one coworker who cut his leg had a friend stitch up the wound on a kitchen table because he couldn’t afford to go to the emergency room. Another coworker had to put $9,000 on a credit card so that his wife could get a C-section. “We were the bomb that went off, but they were all casualties.”
Still, the new lifetime limit of $1 million didn’t even come close to covering Thomas’ needs, and the family hit their so-called lifetime cap after only a year on the new plan. They then had to utilize Colorado’s high-risk pool, which had the same lifetime limit as their private plan.
Eventually Wilkes had to leave his job and open his own business to qualify yet again for group insurance. This time the cap is $6 million, which Wilkes said means that “it is only a matter of a few years before we reach the end of that road and have to change course once again.”
The subcommittee has already looked at the process of rescission, where insurance companies deny individuals coverage after they submit high-cost claims to avoid pay-out. Wilkes compared the process to the tricks of the group market trade in his testimony, noting that annual and lifetime caps are a similar method to rescissions, effectively denying care in the group market.
And of course, all three of the patients represented on the panel are unable to get insurance on an individual scale for the rest of their lives due to their now preexisting conditions, underlining that time is of the essence in the debate over healthcare reform.
“I am pleased to see that the health reform legislation being considered would eliminate several discriminatory insurance practices such as preexisting condition exclusions and annual and lifetime caps, but I am concerned that for those of us currently insured these changes will not take effect in existing plans until 2018. This is simply too long for my family to wait,” Wilkes told the subcommittee.
The heart-wrenching testimony of these patients, combined with the fact that HR 3200 — America’s Affordable Health Choices Act — is moving toward the final stage of a floor vote, created a unique problem for Republican subcommittee members. There was certainly an anticlimactic feel to the proceedings, combined with what seemed like an air of concession.
“We obviously on both sides of the aisle realize it is time for health insurance reform,” said Rep. Joe Barton (R-TX). He also urged “bipartisan consensus” be a part of the process.
Ranking member Rep. Greg Walden (R-OR) also struck a participatory tone, saying that “we can all agree that when selling something as important as health insurance, the American people should be protected.” Yet the next few sentences in his opening statement were somewhat contradictory.
After insisting that “we cannot ignore these problems,” Walden submitted a second copy of a June 12 letter he co-authored with Barton requesting that Subcommittee Chair Bart Stupak (D-MI) hold an investigative hearing on the Chrysler auto dealership closures, “including inviting the auto czar to testify.”
Rep. Michael Burgess (R-TX) also tried to have it both ways.
“People are genuinely frightened by what Congress is going to do to healthcare, and they’re probably justified in that,” Burgess said in his opening statement. However, he twice boasted of his own contribution the HR 3200, the addition of an external review board to monitor health insurance policies.
He then went on to opine that he did not support “mandates, which really have no place in a free society,” without noting that mandates really had no place in Thursday’s discussion. Rep. Phil Gingrey (R-GA) also tried to inject conservative talking points into the discussion by asking Wilkes what he thought of allowing insurance companies to cross state lines to sell policies.
“If you invite selling across state lines that way,” Wilkes said, “you create more of the problems we’re having.” He noted that without stronger regulations, out-of-state insurers would hawk their junk policies all across the nation rather than just in their own state.
In case there was any doubt that these witnesses represented a large and growing part of the population, the second panel testifying before the subcommittee brought their professional analysis to the table.
Sara Collins is vice president for the Affordable Health Insurance Program of The Commonwealth Fund. She presented findings on underinsurance from the fund’s biannual health insurance survey, which provided the oft-quoted number of 25 million underinsured Americans. Not only has the sheer number increased from 16 million in 2003, but they also found that underinsurance is moving up the income scale. Collins said that despite the shocking numbers in her report, which only collected data up to 2007, the situation is surely more dire today thanks to the economic downturn.
Stan Brock, director of the Remote Area Medical Volunteer Corps, seemed to bear this out with his testimony. Brock told the committee about his organization’s recent efforts to bring treatment to underinsured Americans. The group recruits doctors to volunteer their services in multi-day treatment camps where potential patients line up early in the morning to get free care because they have no other option. Though the group was formed to administer such help to developing nations, 62 percent of the group’s efforts now focus on the U.S.
Rep. Jan Schakowsky (D-IL) told Brock she was “ashamed” that her country couldn’t adequately care for its own sick people and vowed to pass reforms so that the Remote Area Medical Volunteer Corps would “be able to serve people in truly remote areas around the world.”
It’s not just unemployed and homeless Americans who rely on the organization’s charity, however. Shockingly, Brock revealed that 42 percent of the people his organization treats already have some sort of insurance, yet they still need to wait for hours to seek free care from the Remote Area Medical facilities.
“We are getting people just like these wonderful folks in the first panel. People who have jobs, people who have insurance,” Brock said. “The people we’re treating might as well be on the moon, might as well be in the Amazon for the opportunity that they have” to get treated.
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