Your company health plan may ruin you
By Leonard Rodberg
Worthington (Minn.) Daily Globe
July 11, 2009
NEW YORK — Underinsurance — the failure of insurance plans to protect us from the cost of needed medical care — is a growing problem for millions of middle- and lower-income Americans. As the national debate over reforming our costly and inefficient health care system heats up, recent studies show that deficiencies in our private insurance system afflict many more than the millions who are uninsured.
Yes, it’s true that the majority of Americans report they are satisfied with their insurance plans, and so politicians promise “you can keep what you have.” But what is it that we have? For growing numbers of Americans, our health insurance is completely inadequate.
Unfortunately, we don’t learn this until we actually get sick. Only when a serious illness or injury hits us do we find our plans really tested. Only then do we discover that co-payments, deductibles, exclusions, and denials leave us struggling to pay for our needed medical care.
We are told that our insurance will take care of us in time of need, but increasingly we are being sold a faulty product.
In a study of health insurance claims just published in the respected policy journal Health Affairs, researchers report that between 2003 and 2007 average out-of-pocket expenses paid by adults with employer-sponsored insurance grew by more than a third, to $729 per person each year. One in 10 adults faced out-of-pocket costs that averaged $3,364. This spending that insurance didn’t cover includes deductibles (which the patient must pay before insurance starts paying anything) and co-payments (the patient’s share of the remaining bill).
The study’s authors attributed the increase in costs to the overall rise in health care costs, along with a decline in the coverage provided by employer-sponsored insurance. In fact, the researchers concluded that “in the United States, if you are sick and earn a modest income, you are probably underinsured — even if you have employer-based coverage.”
In another study just published in the American Journal of Medicine, researchers from Harvard found that in 2007 illness and medical bills contributed to nearly two-thirds of all personal bankruptcies. This is a 50 percent increase from the number of similar bankruptcies found in 2001. The majority of medically bankrupt families were middle class and owned their homes. Most surprising, more than three-quarters of them were insured at the start of their illness.
These insured individuals and families were unable to pay out-of-pocket expenses that averaged $17,749. Severe illness caused many to lose their jobs, which in turn caused them to lose their coverage. The authors conclude that “the U.S. health care financing system is broken, and not only for the poor and uninsured. Middle-class families frequently collapse under the strain of a health care system that treats physical wounds, but often inflicts fiscal ones.”
As this research reveals, the way we pay for health care is not protecting us from heavy financial burdens, nor is it assuring us access to needed medical care. In spite of this, the health reform plans currently being considered in Congress would require that we purchase the very health insurance that is failing us. They do nothing to reduce the incidence of underinsurance; in fact, they spread it. They leave health insurance just the way it is now and would require even more people to buy it.
Advocates of a single-payer national health program point out that there is an alternative. With a public insurance program like Medicare, we could have comprehensive coverage of the care we need. We would also save hundreds of billions of dollars in wasteful administrative spending and contain costs going into the future. Such a plan, as embodied in Rep. John Conyers’ U.S. National Health Care Act (H.R. 676), would create a secure financing mechanism, eliminate the burden of out-of-pocket spending, and protect those of us who become ill from financial ruin.
As Rose Ann DeMoro, executive director of the California Nurses Association, has said, “The trouble for most families is not the lack of insurance, it’s the insurance they already have.” Unless we change how the country pays for health care, we won’t have the reform we really need.
Leonard Rodberg is professor and chair of Urban Studies at Queens College, City University of New York, and research director of the N.Y. Metro Chapter of Physicians for a National Health Program. www.pnhp.org.
http://www.dglobe.com/event/article/id/24864/