HealthCareForAmericaNow

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.

At hearing this afternoon on "Consumer Choices and Transparency in the Health Insurance Industry," the Senate Committee on Commerce heard powerful testimony from three experts on the health insurance industry: Wendell Potter, a former executive at Cigna; Nancy Metcalf of Consumer Reports; and Dr. Karen Pollitz of Georgetown University's Health Policy Center. Here I want to focus on Mr. Potter's testimony.

As a former industry insider, Potter spoke with tremendous knowledge and delivered a forceful indictment of insurers' practices:

For 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick – all so they can satisfy their Wall Street investors.

I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand—or even to obtain—information we need.

[...]

To help meet Wall Street’s relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick. Insurers have several ways to cull the sick from their rolls. One is policy rescission. They look carefully to see if a sick policyholder may have omitted a minor illness or a pre-existing condition when applying for coverage, and then they use that as justification to cancel the policy retroactively, even if the enrollee has never missed a premium payment. Asked directly about this practice just last week in the House Energy and Commerce Committee, executives of three of the nation’s largest health insurers refused to end the practice of cancelling policies for sick enrollees. Why? Because dumping a small number of enrollees can have a big effect on the bottom line. Ten percent of the population accounts for two-thirds of all health care spending. The House Energy and Commerce Committee’s investigation into three insurers found that they canceled the coverage of roughly 20,000 people in a five-year period, allowing the companies to avoid paying $300 million in claims.

As lawmakers tackle the challenge of reforming our broken health care system, Potter urged Congress not to be swayed by "charm offensives" from the industry:

We've had a few discussions here about why small business owners are increasingly supporting health reform with a public option. That's why I'd like to highlight this piece from Tim Foley on some remarks Howard Dean made recently about small businesses and health care:

At a meeting in New York City that I attended, Howard Dean talked about the problems faced by small businesses dealing with increasingly unaffordable health insurance this way:  “We really do nothing for small businesses – neither party ever does – but small businesses create 80% of the jobs in this country.”  (I’m paraphrasing from inexact notes).  That’s one of many reasons why small businesses have switched sides on the health care debate this time.  In the 1990s, they were determined to kill Clinton’s employer mandate.  Now, they’re desperate for relief from the no-win scenario of our broken health insurance system.

Next, Tim zeroes in on another compelling small business story:

Ms. [Roshanda] Young is Operations Manager for the family-owned Alpha Express, an Iowa-based transportation and contracting business. They haven’t been able to offer health insurance for years – with bids starting at 13% of payroll, health care costs would be the cost equivalent of five additional employees. That might be doable, but the insurance market for small business is only slightly less capricious than individuals. Without the bargaining clout of a large employer or the capacity to spread risk out over a large number of people, small businesses are subject to the same whims over premium increases and pre-existing conditions that so many individuals face. As ReShonda put it, “the plans we’ve looked at would mean at least a 12 percent increase in our payroll expenses. And the plan would include a waiting period of 12 to 18 months before any pre-existing conditions would be covered, so the money we put out in premiums wouldn’t even cover some of the medical expenses we would incur. We also had no guarantee the premium will remain stable from one year to the next, and in fact they could ratchet up the premium the second year and drive us out of the market again.”

If that doesn’t sound surprising, you also won’t be surprised to learn part of the reason for insurance to be so unpredictable – no one’s holding their feet to the fire. “I received eight bids for coverage for our employees – but they were all from the same insurance company, Wellmark. In Waterloo-Cedar Falls and in most of Iowa, there are one or maybe two health insurers to choose from. That’s not competition, and it’s not giving us affordable choices.” It’s the old “where else are you going to go?” conundrum. As of right now, the answer is “nowhere.”

You hear a lot about how small businesses would get crushed by raising taxes on the wealthiest 1%, or how small business will be crushed by excessive regulations, or how small business would be crushed by a carbon tax or cap & trade. But those same people who claim to stand up for small businesses disappear when we’re dealing with something that does crush small businesses – the no-win scenario of either letting the employees who feel like your family go without benefits, opting for the “split the baby” solution of getting a high-deductible or high cost-sharing plan that you know will be insufficient, or subjecting to yourself to the slings and arrows of outrageous insurance monopolies, where the only safe prediction is that your costs will go up.

The anecdotal evidence as well as the survey and polling data is adding up: much of the small business community backs strong health care reform. It's time for our elected representatives to do something real for the small entrepreneurs who power our economy.

Conservatives claim health reform will hurt small business owners, but it's not true: it's the current system that has small businessmen and womens' backs against the wall.

Reader LB shares her experience with running a small business and dealing with exorbitant health care costs from private insurers:

My husband was a member of UFCW when employed by a local grocery store between the mid 60's to mid 90's. During that time his employer provided wonderful health care including eye and dental and even though our annual income was not great, the health care made up for it. Since that time, and now that the health care industry realizes the cash cow they have, we have seen the demise of good insurance and the ever increasing rise in our health care premiums. I am a small business owner and independent contractor. I have only a few employees but because of the nature of our business and the expense, we are unable to provide health care to our staff. I purchase private insurance which has increased each year that I've had it. One year alone, before my husband was eligible for Medicare, we had an insurance bill for two people that was just under $20,000. for the year. Since that time, due to the economic downturn, I have been forced to trim my coverage to a minimum catastropic plan which provides no coverage for annual screening or routine tests (all of which now must come out of pocket). It's time we join the rest of the industrialized countries and provide care for our citizens. Health care should not be a privilege of wealth but a right of every citizen in this country. Let's flood DC phone lines on the 25th of June during the national rally and every day until the hearings produce a Public Option. Let's take back our country from the greedy companies that reward profit over people. IT'S LONG PAST TIME!

Stories like this emphasize how brutally the health crisis is affecting hard-working, entrepreneurial, middle-class Americans. This story also reminds us of an important point: with the flexibility offered by a public health insurance option, more Americans would be able to start and succeed in their own small businesses. As it is, people who have health insurance and have employment are struggling to stay ahead of, in LB's words, "the ever increasing rise in our health care premiums."

This is a clear call to action. We hope you'll join in on the 25th!

Republican opponents of serious health reform like Senator Mitch McConnell love to claim that a public option would hurt small business owners. On the ground, though, the picture is more complex and, if anything, the opposite. Small business owners are suffering under the current system, and many of them strongly support health reform that includes a public option. That's because enacting real health reform would be a boost - not a blow - to America's economy.

Looking at the status quo, we find "health care costs choking small businesses." Listen to the story of this businessman:

Maryland auto shop owner Brian England offers health care coverage to his 18 employees, including part-time staff. He calls it "the right thing to do," and besides, he knows taking care of his employees makes good business sense.

But every year his insurance premium costs rise another 10 or 20 percent, and England worries about the day when the fees will overwhelm him. After payroll and rent, health care is his largest business expense.

"A business down the road could have their labor rate $5 cheaper than us because that's how much it costs for us to provide health care," England said, referring to the hourly rates his business and competitors might offer customers.

[snip]

For England, shopping for policies and finding a way to afford to offer the benefits has become a yearly headache.

"I'm in the business to do auto repair," England said. "I'm not in the business of trying to find out how to provide health coverage and how to get the right sort of plan…. And it's not easy."

Brian England goes on to say that he supports a public option.

But anecdotes don't tell us everything we need to know. In the same story, one of Brian's peers (albeit someone who employs over nine times as many people) expresses some skepticism about the public option. Turning to quantitative data, then, we get another perspective on small business owners and health care.

Last week, New York Small Business United for Health Care released the results of its statewide survey of 202 small businesses in New York (.pdf). 73% of respondents favored the public option.

Yesterday, the Wall Street Journal attacked President Obama's plans for health care reform on the grounds that only the private sector and an environment where Americans are "exposed to the true cost of their care" can effectively regulate the cost of health care.

The White House has argued that regional variations in health care quality and cost show that health care reform can improve efficiency and quality in the health care system while cutting waste. Attempting to cast doubt on this claim, the WSJ suggests that variations in cost among regions are due to needed experimentation, not waste or greed:

The new revelation about fake letters to the editor from a public relations firm hired by America’s Health Insurance Plans (AHIP) is nothing new in the world of health insurance. In fact, when it comes to Medicare Advantage, the insurers have engaged in much more devious schemes to take advantage of elderly people to increase their bottom line.

This profile in the Huffington Post shows how one man in Washington, DC was deceived into signing up for a plan that was more expensive than his regular Medicare plan, and didn’t cover all his medical needs:

The next time Smith went to his pharmacy, he was told he was no longer covered. When he went to Howard University Hospital for a colon cancer procedure, he was told the same thing. His wife sent him to the local Legal Aid Society of the District of Columbia.

The woman who'd knocked was a sales rep from EverCare ("We care about healthcare"), a company that sells Medicare Advantage plans, which are privately run and can be more expansive - with vision and dental coverage - but have a smaller network of providers that participate. In practice, the extra vision and dental coverage is often of negligible benefit and doesn't outweigh what's lost by leaving traditional Medicare - but it looks good at first.

This was not an isolated incident. It turns out that there was a plague of deception on the part of the Medicare Advantage sales representatives with a variety of companies. In an series of stories, Avram Goldstein of Bloomberg News, reported that many incidents were uncovered in Congressional hearing last year:

June 26, 2008 (Bloomberg) Residents of Judiciary House, a residence for the elderly in Washington, testified today that Coventry agents misled them in a February sales briefing at their building. Mentally disabled residents were signed up improperly, and some are still trapped in plans that won't pay for visits to their regular doctors, they said.

. . .

Edith Williams, a multiple sclerosis patient, broke down in tears during the hearing as she described life-threatening problems after she was enrolled without her knowledge in Coventry's Advantage plan. She couldn't fill her regular prescriptions, she said.

August 9, 2008 (Bloomberg) The Centers for Medicare and Medicaid Services received 2,700 complaints between December and May 1 from among more than 8 million Medicare Advantage members.

[Avram Goldstein is currently heading the research department for Health Care for America Now.]

It’s not surprising that they would go to such great lengths to fool people into signing up for these plans. As the Dallas Morning News explains, “the government pays the plans an average of $1,000, or 14 percent, more per beneficiary a year than it would for someone in traditional Medicare.” Medicare Advantage is a huge source of profit for the insurers, but not necessarily a better product for the consumers. The benefits to the companies for the Medicare Advantage programs are significant. Avram Goldstein:

August 27, 2008 (Bloomberg) Medicare, the government health program for the elderly and disabled, will pay Humana and the other Advantage providers $76.3 billion this fiscal year, about $9.2 billion more than traditional coverage would cost, government figures show. . . .

Pete Stark, the California Democrat who chairs the House Ways and Means health subcommittee, last month said Humana was making "huge profits at taxpayers' expense."

While some customers are happy with their plans, there are many who are surprised by how little they cover. Dallas Morning News:

Virginia Leconti of Grand Prairie, Texas, on the other hand, joined a Medicare Advantage plan only to discover that her home health care agency wouldn't accept it. To keep her in-home care, she switched back to traditional Medicare.

"When the plan's salesman visited me, he played up the fact that the policy came with dental and vision benefits at no extra cost," she said. "I just assumed that my home health care was part of the package."

Warner says some health care providers don't take Advantage plans because they don't want to deal with more insurers.

In the end the companies were fined for their deceptive practices. Avram Goldstein:

August 27, 2008 (Bloomberg) — Humana Inc., the second-largest provider of U.S. government-sponsored health plans for the elderly, paid a record fine after Oklahoma regulators said the company used unlicensed agents to sell coverage.

At least 68 unauthorized sales people employed by the Louisville, Kentucky-based company sold Medicare plans to Oklahomans, said Marc Young, a spokesman for the state's Insurance Department. Humana paid a $500,000 fine, the state's largest for an insurance company.

With evidence like this, it is hard to believe that AHIP has the gall to say on their web site, “Join us in working toward an uniquely American solution - Affordable, high quality health care for every American.” With friends like these in health care, who needs enemies?

On Monday, America's Health Insurance Plans held an online forum as part of their sham "listening tour." They asked for questions to be submitted to them via email, easily allowing them to pick and choose what they answered. They controlled the medium - with a moderator choosing questions for CEO Karen Ignagni to answer - and that allowed them to control the message. Judging from what actually went on during the forum, with softball questions and no followups, the insurance industry was allowed to spin their position on health care. You can watch the forum here.

Of course, if AHIP had really wanted to talk with the public, they would have been faced with a very different situation. A full 82% of America believes we need a big change in our health care system, with large margins supporting the kinds of health care plans - with quality, affordable health care for all - that the industry opposes. (Karen Ignagni makes clear the industry's position on "reform," a pitiful tax credit that even if it would cover the full cost of health care, would still leave working families paying out of pocket costs for a year until the IRS sent them their end-of-the-year check.)

But it's clear AHIP doesn't actually want to listen to the public, even though they claim they want input. Because if they really wanted to listen to the public, they would have been asked real questions.

On Monday, we asked our members to write America's Health Insurance Plans with questions. The response was overwhelming. In under three hours, over 1,700 questions were sent to AHIP. The full list is here, but I've pulled out some of the best ones - ones AHIP would have had to answer if it were really listening.

When comparisons are made between American private-insurance health plans and the national health care plans provided in all other western democracies (e.g. Canada, Europe), one of the glaring differences is the hugely larger percent of healthcare dollars spent on administrative costs in the US. Would the US healthcare industry ever commit to making the radical changes necessary to get administrative costs more in line with what such costs amount to (percentage wise) in the rest of the western world?

–John Valiulis

Would you consider changing your business model to put people's health decisions back in the hands of their doctors rather than an insurance clerk?

–Ann Barnes

Via NBC:

More than 45 million people in the U.S. have no health insurance. So, where do they go when they're sick or hurt?

Many leave and head out of the country where they can afford to pay for the care they need on a trip becoming known as medical tourism.

A torn bicep caused searing pain, and a dilemma for Stephen Hoyle. He could not afford the surgery to fix it.

"We are one of America's 20 million uninsured families, and started looking at costs approaching $20,000," Hoyle said.

Hoyle was priced out of the U.S. Health Care System, so he flew to Costa Rica, where medical costs are dramatically lower.

Hoyle joined an estimated 500,000 Americans traveling out of the U.S. every year for some type of medical care. Care they can't afford here.

It's simply amazing that it is cheaper to fly thousands of miles to a foreign country than to have a medical procedure here at home. It speaks to the incredible amount of waste and bloat in the private health care system that sick Americans routinely subject themselves to long trips in foreign lands because their country couldn't provide them quality, affordable coverage. And it's more than just health tourism. As Holly from Aurora, IL told us, the health care crisis in America is forcing hard working people to contemplate leaving the country they love:

$217 million per hour.

That's how much Americans spend on health care according to testimony in front of Congress' Joint Economic Committee by experts from the American Human Development Project.

24 hours a day. 365 days a year. For a total of almost $2 trillion spent every year, 16% of our GDP - more than any other nation on earth. And for what?

According to the World Health Organization, America ranks 37th in the world for best health care systems, behind countries we'd expect like France, Japan, and Norway, and also countries that might surprise you, like Colombia, Saudi Arabia, and Chile. And it's not just our health care. According to the American Human Development Project: