Health Care For America Now

The New York Times writes on the tragic level of bankruptcies related to high medical costs. And they're not talking about people who lack insurance - they're talking about people who find out their insurance doesn't protect them:

Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.

[...]

One of them is Lawrence Yurdin, a 64-year-old computer security specialist. Although the brochure on his Aetna policy seemed to indicate it covered up to $150,000 a year in hospital care, the fine print excluded nearly all of the treatment he received at an Austin, Tex., hospital.

He and his wife, Claire, filed for bankruptcy last December, as his unpaid medical bills approached $200,000.

[...]

“Underinsurance is the great hidden risk of the American health care system,” said Elizabeth Warren, a Harvard law professor who has analyzed medical bankruptcies. “People do not realize they are one diagnosis away from financial collapse.”

Last week, a former Cigna executive warned at a Senate hearing on health insurance that lawmakers should be careful about the role they gave private insurers in any new system, saying the companies were too prone to “confuse their customers and dump the sick.”

“The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance,” Wendell Potter, the former Cigna executive, testified.

Mr. Yurdin learned the hard way.

At St. David’s Medical Center in Austin, where he went for two separate heart procedures last year, the hospital’s admitting office looked at Mr. Yurdin’s coverage and talked to Aetna. St. David’s estimated that his share of the payments would be only a few thousand dollars per procedure.

He and the hospital say they were surprised to eventually learn that the $150,000 hospital coverage in the Aetna policy was mainly for room and board. Coverage was capped at $10,000 for “other hospital services,” which turned out to include nearly all routine hospital care — the expenses incurred in the operating room, for example, and the cost of any medication he received.

In other words, Aetna would have paid for Mr. Yurdin to stay in the hospital for more than five months — as long as he did not need an operation or any lab tests or drugs while he was there.

Aetna contends that it repeatedly informed Mr. Yurdin and the hospital of the restrictions in policy, which is known in the industry as a limited-benefit plan.

The company says such policies offer value by covering some hospital expenses, like surgeons’ fees or a stay in the intensive care unit. Aetna also says all of its policyholders receive significant discounts on the overall cost of hospital care. But Aetna also acknowledges that a limited-benefit plan was inappropriate in Mr. Yurdin’s case because his age and condition — an irregular heartbeat — made him likely to require more comprehensive coverage.

“Limited benefits aren’t right for everyone, and it clearly wasn’t right for Mr. Yurdin,” said Cynthia B. Michener, an Aetna spokeswoman.

Read more about Wendell Potter's testimony here and here.

As statistics show, stories like Larry Yurdin's are frighteningly common. Health Care for America Now discussed rates of medical-related bankruptcies in its report on the increasing unaffordability of health care, along with many other alarming numbers concerning exploding medical costs and stagnant wages.

Moreover, without serious health reform - including a public option - people like Larry will not find real protection against exorbitant medical costs. We need a public option to control costs and keep insurers honest. And we need a public option if we are to avoid the bleak future Jacob Hacker forecasts:

Look a little further down the road. It's been three years since the president signed [a bill without a public option]. Despite high hopes, the patchwork of federal and state insurance regulations created by the legislation isn't working. The worst abuses–such as revoking policies of people who thought they were covered after they've run up big medical bills–have largely ended. But private insurers continue to ration care in arbitrary ways that put their profits before patients, and many Americans still can't obtain or afford private insurance that promises them health security. The basic problem is that the regulations stand alone, without the auxiliary precaution of a public health plan whose mission is to improve the quality and cost-effectiveness of care.

Those with chronic conditions or nearing retirement age who are self-employed or work for small businesses are hit hardest. A 59-year-old self-employed man with diabetes, or a 48-year-old single mother with breast cancer who works at a small retailer–these are the sort of people who will fall through the cracks without a public plan available in all parts of the nation. They may qualify for a "hardship exemption" so that they are not compelled to buy insurance under the reform legislation's "individual mandate." But not being forced to buy insurance they can't afford is a poor substitute for having access to a public plan they can afford.

Hardworking Americans facing financial and personal ruin over high medical costs deserve a better future than that. And they deserve a better deal than the one Larry Yurdin got from his insurer and from his society. We need a public option to help turn our current system - a nightmare for so many - into a system that provides people with real choices.