PNHP

Sick and Broke

Sick and Broke

By Elizabeth Warren
Wednesday, February 9, 2005

Nobody’s safe. That’s the warning from the first large-scale study of medical bankruptcy.

Health insurance? That didn’t protect 1 million Americans who were financially ruined by illness or medical bills last year.

A comfortable middle-class lifestyle? Good education? Decent job? No safeguards there. Most of the medically bankrupt were middle-class homeowners who had been to college and had responsible jobs — until illness struck.

As part of a research study at Harvard University, our researchers interviewed 1,771 Americans in bankruptcy courts across the country. To our surprise, half said that illness or medical bills drove them to bankruptcy. So each year, 2 million Americans — those who file and their dependents — face the double disaster of illness and bankruptcy.

But the bigger surprise was that three-quarters of the medically bankrupt had health insurance.

How did illness bankrupt middle-class Americans with health insurance? For some, high co-payments, deductibles, exclusions from coverage and other loopholes left them holding the bag for thousands of dollars in out-of-pocket costs when serious illness struck. But even families with Cadillac coverage were often bankrupted by medical problems.

Too sick to work, they suddenly lost their jobs. With the jobs went most of their income and their health insurance — a quarter of all employers cancel coverage the day you leave work because of a disabling illness; another quarter do so in less than a year. Many of the medically bankrupt qualified for some disability payments (eventually), and had the right under the COBRA law to continue their health coverage — if they paid for it themselves. But how many families can afford a $1,000 monthly premium for coverage under COBRA, especially after the breadwinner has lost his or her job?

Often, the medical bills arrived just as the insurance and the paycheck disappeared.

Bankrupt families lost more than just assets. One out of five went without food. A third had their utilities shut off, and nearly two-thirds skipped needed doctor or dentist visits. These families struggled to stay out of bankruptcy. They arrived at the bankruptcy courthouse exhausted and emotionally spent, brought low by a health care system that could offer physical cures but that left them financially devastated.

Many in Congress have a response to the problem of the growing number of medical bankruptcies: make it harder for families to file bankruptcy regardless of the reason for their financial troubles. Bankruptcy legislation — widely known as the credit industry wish list — has been introduced yet again to increase costs and decrease protection for every family that turns to the bankruptcy system for help. With the dramatic rise in medical bankruptcies now documented, this tired approach would be no different than a congressional demand to close hospitals in response to a flu epidemic. Making bankruptcy harder puts the fallout from a broken health care system back on families, leaving them with no escape.

The problem is not in the bankruptcy laws. The problem is in the health care finance system and in chronic debates about reforming it. The Harvard study shows:

• Health insurance isn’t an on-off switch, giving full protection to everyone who has it. There is real coverage and there is faux coverage. Policies that can be canceled when you need them most are often useless. So is bare-bones coverage like the Utah Medicaid program pioneered by new Health and Human Services Secretary Mike Leavitt; it pays for primary care visits but not specialists or hospital care. We need to talk about quality, durable coverage, not just about how to get more names listed on nearly-useless insurance policies.

• The link between jobs and health insurance is strained beyond the breaking point. A harsh fact of life in America is that illness leads to job loss, and that can mean a double kick when people lose their insurance. Promising them high-priced coverage through COBRA is meaningless if they can’t afford to pay. Comprehensive health insurance is the only real solution, not just for the poor but for middle-class Americans as well.

Without better coverage, millions more Americans will be hit by medical bankruptcy over the next decade. It will not be limited to the poorly educated, the barely employed or the uninsured. The people financially devastated by a serious illness are at the heart of the middle class.

Every 30 seconds in the United States, someone files for bankruptcy in the aftermath of a serious health problem. Time is running out. A broken health care system is bankrupting families across this country.

The writer is a law professor at Harvard University.

System’s ills cost us

By Mike Sweet

Ask anyone to describe someone who files for personal bankruptcy and the description most likely fits an uncomplimentary stereotype.

It’s someone who’s maxed out their credit cards buying things they didn’t need (even though their president said it was patriotic and would rescue the economy).

It would include those who took out a second mortgage on their house to consolidate bills or redecorate, or even a third mortgage to buy a summer home that they couldn’t live without because no one can own too much stuff in an ownership society.

It also can include people with all the above over-commitments, who in addition face those numbing SUV and gasoline payments and paying heating bills that literally go up in smoke, thanks to the Enrons of this world.

Generally, the bankruptcy filer is defined and denigrated as a lowlife who knowingly lived beyond their means and then tries to get out of paying their creditors, who bear neither burden nor guilt for encouraging them to overextend. The only pity permitted is for those unfortunates whose financial crisis is due to losing their job. And then it’s slim pity.

A new Harvard University study done by its law and medical schools has identified a major cause of bankruptcy -that has not been considered previously – medical costs.

Using 2001 data involving 1,771 bankruptcy cases, researchers found that illness and medical bills were the key factor in 54 percent of those bankruptcies.

Further eviscerating the everyone’s-a-deadbeat theory, the study found that most filers were middle class. They were buying homes and had college degrees and good jobs. Three of four had health insurance when they or their family member first got sick.

But as the coverage maxed out, or the insurers dropped them, or they lost their insurance along with their jobs and the ability to pay the premiums, the medical bills piled up beyond their ability to pay.

Steffie Woolhandler, the report’s co-author, concluded “Unless you’re rich, we found you’re one serious illness away from financial ruin.”

Many millions of Americans already knew that. They can do the math for income versus outgo. But they soldier on, making their daily commutes and praying that they don’t get sick or get their job cut in one of those mergers that delight Wall Street.

After a century of progress in which government and law made life better for people, we are headed back into that pre-20th century Darwinian netherworld of dog-eat-dog where we must all walk alone and die in silence, without protestation.

Big business rules. People are just worker bees to be used up. Government is there only to help the rich.

There are skeptics who reject the Harvard conclusion as political. Woolhandler and others invite flak because they belong to the National Health Program, whose members believe that “the only solution to solving the United States’ many health care problems is a single-payer system,” an idea many doctors agree with.

Woolhandler: “Every other developed nation in the world has a single-payer health-care system. There is no reason we can’t make it work in this country.”

Actually there is. It is the view of powerful conservatives like George W.Bush that such a system is socialism, which it would not have to be to work.

The only welfare conservatives countenance is for defense contractors, and for politicians, of course. After all, those taxpayer-paid salaries, generous pensions and health care are not earned in the Darwinian corporate world they insist everyone else must compete in.

Their benefits are provided by the painful contributions of a society that not only does not get equal benefits, but also endures hypocritical lectures about how they must fend for themselves.

And who are told if they go bankrupt or die for lack of health insurance, then so be it.

An impossibly complicated system causes medical bankruptcies(Cleveland Plain Dealer)

To the editor:

Regarding the Plain Dealers Feb. 2 lead article, Medical bills blamed in half of bankruptcies, a reference is made to Physicians for a National Health Program, which advocates a single-payer system as the only solution to the United States many health care problems. The article goes on to quote Dr. Steffie Woolhandler as saying, every other developed nation in the world has a single-payer health-care system. There is no reason we cant make it work in this country.

The Single-Payer Action Network Ohio (SPAN Ohio) fully concurs with this view. That is why our coalition, which includes many physicians and health care providers, the Ohio AFL-CIO and UAW, political leaders, faith groups and community organizations is sponsoring an initiative petition to make the Health Care For All Ohioans Act (HCFAOA) the law of Ohio. If passed by the voters, this measure would guarantee all Ohio residents comprehensive medical care as a matter of right from birth to end of life. 

Single-payer means that one fund, administered by a non-profit government agency, would make payments for all medical services. Medicare is an example of a single-payer system. We would like to see Medicare broadened to include all residents, regardless of age, employment status, or pre-existing conditions.  Under HCFAOA, there would be no co-payments, no deductibles, no premiums and no limits. 

There is no prospect at present for winning adoption of single-payer on a federal level so efforts are being made to achieve it first on a state level. Some state has to be first. Why not Ohio? 

Jerry Gordon
Cleveland

Gordon is secretary of the Single-Payer Action Network Ohio.

Lawmakers eye insurance with no frills

The Journal Gazette
(FortWayne.com)
Feb. 6, 2005
Lawmakers eye insurance with no frills
By Niki Kelly

After mandating numerous health insurance benefits over the past decade,
lawmakers this year might allow small-business owners to purchase no-frills policies for their employees that don’t include those required services.

The proposal – often called “mandate-light” – is backed by Gov. Mitch Daniels and is included in House Bill 1487, which will receive a hearing Feb.17.

http://www.fortwayne.com/mld/journalgazette/10832440.htm

Indiana House Bill No. 1487

Synopsis: Health benefit mandate option. Allows, under certain circumstances, an accident and sickness insurer or a health maintenance organization to provide a policy or contract without complying with all health benefit mandates.

Sec. 5. Notwithstanding any other law, an insurer may offer to a prospective purchaser a policy of accident and sickness insurance without complying with all health benefit mandates if:

(1) when the offer is made the insurer provides a list of the health benefit mandates with which the offer does not comply; and
(2) the policy offered includes the following:
(A) Newborn coverage required under IC 27-8-5.6.
(B) Diabetes related coverage required under IC 27-8-14.5.
(C) If the prospective purchaser is described in section 4(2) of this chapter:
(i) breast cancer screening related coverage required under IC
27-8-14;
(ii) prostate cancer screening related coverage required under IC
27-8-14.7; and
(iii) colorectal cancer screening related coverage required under IC 27-8-14.8.
(D) Adopted child coverage required under IC 27-8-5-21.

http://www.in.gov/legislative/bills/2005/IN/IN1487.1.html

Comment: In order to make health insurance affordable for small businesses, Indiana’s governor is supporting a list of mandates that excludes almost all medical care. For the great majority of individuals, the mandates include only screening (but not treatment) for two malignancies (colorectal plus one other sex-specific cancer).

There is one important if unintended benefit of this proposal. It demonstrates the fallacy of targeting health care cost containment exclusively to the insurance premium, a process that is most effective when over 99% of benefits are eliminated. Of course, sponsors of this legislation would contend that that the benefits could be tailored to only those needed.

But 80% of health care services are utilized by only 20% of the population. So those of us who are healthy now, but will later become part of the 20% with greater needs, will have to buy the plan that will cover our specific needs. But which plan do we purchase? The cardiac plan? But which one? The one that covers coronary artery hospital benefits? Surgeon benefits? Or maybe the one that covers less invasive angioplasty with long term drug therapy? Or will we need the coverage that includes the implantable defibrillator? But maybe the problem will be with the aortic valve, requiring a valve replacement instead of angioplasty. Or maybe both? But then what about hypertension and stroke? Or cancer? And which type? And should coverage include surgery? Chemotherapy? Radiation? Hospice?

The obvious point is that coverage needs to be comprehensive. Even though only about one-fifth of us will have need for expensive services, all of us need to have the protection of comprehensive coverage. Since about half of the four-fifths of us who will remain healthy will have financial difficulties meeting their modest health care needs, coverage must meet that contingency as well. That leaves about 10% of health care that does not expose individuals to financial risk. But the administrative complexity of funding that individually is not worth the waste of resources. Let’s just include that 10% in with the other 90% and simply provide comprehensive coverage for everyone.

Or would you really rather have your insurance cover only your cancer screening test, and then be left on your own to figure out how you’re going to pay for treatment? And any other care you may eventually need?

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Subject: qotd: Is regulation of the individual health insurance market the answer?

The Commonwealth Fund
February 2005
Insuring The Healthy Or Insuring The Sick?
The Dilemma Of Regulating The Individual Health Insurance Market
By Nancy C. Turnbull and Nancy M. Kane

From the Executive Summary:
Federal and state policymakers are considering a variety of policy approaches—such as tax credits—to expand health insurance coverage through the individual health insurance market. For these policy approaches to succeed, there must be a well functioning individual health insurance market where reasonably comprehensive coverage is both available and affordable.

The individual market currently is quite small, covering approximately 17 million nonelderly Americans, or about 6.7 percent of the population. This market historically has not worked well for many people seeking coverage, in particular for those who need coverage the most. Policies frequently have been unavailable to people with existing health conditions;premiums have been expensive and usually have risen faster than group insurance rates; and benefits have generally been far more limited than those in group policies.

Key Findings:

* Stricter regulation has made an important difference, but affordability is still a major problem.

* Older or less healthy consumers face a range of problems in the weaker-regulation states.

* State high-risk pools are not an adequate alternative to stricter regulation.

* A few carriers in each state dominate the individual health insurance market, a trend that has strengthened over time. (As of 2002, loss ratios in the individual market in the study states were in the 70 percent to
85 percent range.)

http://www.cmwf.org/usr_doc/71_Turnbull_insuring_healthy_or_sick_findings.pdf

Comment: Current political trends suggest that the individual insurance market will play a much greater role in the future. This study adds to the abundance of health policy literature that confirms that the individual market is highly flawed. It is both inequitable and ineffective in ensuring affordable access to health care.

There are two options. Increase the regulatory oversight of not only the individual market but the group market as well. Regulations must ensure both equity and affordable access to care. Such a highly regulated market would dramatically increase administrative costs and increase overall health care spending in order to cover those without adequate access today.

There is another option. We can throw out the highly flawed private individual and group plans and replace them with a single, administratively efficient program that ensures both equitable funding and affordable health care access. Is there really any choice here?

Job-based health plans declining

A new study finds fewer employees receive coverage as medical costs soar
By Aurelio Rojas
Sacramento Bee Capitol Bureau

What was once a social compact – work, and chances were you would get health insurance through your employer – is fraying as medical costs soar, according to a new study.

The UCLA Center For Health Policy Research, which provides lawmakers with data to formulate policy, found that in 2003, only about half (53.8 percent) of non-elderly Californians were covered throughout the year by insurance from their employer.

That represents a drop of 2.6 percent between 2001 and 2003.

“Three-quarters of all of the uninsured in the state are in families that work,” E. Richard Brown, director of the center, said in an interview. “Sixty percent are in families headed by someone who works full time.”

As health costs rise, a growing number of policy-makers – including President Bush – are promoting personal responsibility as an alternative to the job-based system that covered most working Americans for the past half-century.

In California, Assemblymen Keith Richman, R-Northridge, and Joe Nation, D-San Rafael, plan to introduce legislation that would require all Californians to have health care. The state would subsidize low-income workers.

More than 6.5 million people in the state were without insurance at some point in 2003, including nearly 1 million children, according to the UCLA study.

The percentage of uninsured adults increased slightly from 2001. But the overall rate remained flat as enrollment of children surged in the state’s Medi-Cal and Healthy Families programs.

Brown said the overwhelming majority of the uninsured live in families whose low income puts health insurance out of financial reach.

“For workers who are trying to buy family coverage through their employer, the average increase in the share of the cost they have to pay rose 79 percent between 2001 and 2003,” Brown said. “That’s huge.”

Anthony Wright, spokesman for Health Access California, a coalition of consumer and labor groups, said the move away from employer-based health insurance has been gradual.

“It’s very rare that a business says, ‘You have health care coverage this month, but we’re going to drop it next month,’ ” he said.

“What’s more likely is that for new hires, they change the rules. The Southern California grocery strike is a classic example.”

In October 2003, 59,000 union members went on strike or were locked out. When a settlement was reached 4 1/2 months later, they retained their health benefits.

But new hires now have to wait more than a year before qualifying for coverage. The trend, repeated in other industries, has put a strain on state programs.

“The reason the costs of Medi-Cal and Healthy Families are increasing is because more people are getting on them,” Wright said. “What happens when the state begins cutting costs?”

Hospitals are bearing an added burden as emergency rooms turn into primary care providers of last resort.

Because of uncompensated care, a growing number of hospitals have shuttered their emergency units. In Sacramento, UC Davis Medical Center soon will begin turning away patients who do not need emergency care.

In the aftermath of November’s narrow defeat of Proposition 72, which would have required employers to provide insurance for workers, several proposals are taking shape in the Capitol.

Sen. Sheila Kuehl, D-Santa Monica, has introduced a “single-payer” universal health care plan designed to reduce administrative costs by squeezing out insurance companies. State Senate President Pro Tem Don Perata, D-Oakland, supports her bill.

Assembly Speaker Fabian Núñez, D-Los Angeles, said he will soon announce his support for a proposal. But he believes many employers are shirking their responsibilities.

“They ought to be ponying up and paying a bigger share of the premiums, and we need to contain health care costs,” he said. “Because if we don’t contain health care costs, the premiums are going to continue to rise.”

Gov. Arnold Schwarzenegger, however, has indicated he may be receptive to requiring individuals to have health insurance to address the issue of the uninsured.

“We have to really address this once and for all and figure out a way of how we do it, like with car insurance, where we make it law that people carry insurance, and they are really insured,” the Republican governor said last fall.

President Bush’s “ownership society” also calls for shifting the nation from an employer-based insurance system. Workers would buy higher-deductible catastrophic insurance policies to cover major medical needs.

Routine medical costs would be paid with money set aside in tax-sheltered health savings accounts. Poor families would received $3,000 annual subsidies.

Brown said most poor families still will not be able to afford coverage, because the average cost of health care purchased through an insurance pool is about $7,000 for a family of four.

The Richmond-Nation proposal, he said, likely will face the same problems.

“It’s a tough problem, and there aren’t going to be any easy answers,” he said. “But the solutions really need to match the reality.”

Medical Students Expose Differences Within U.S. And Canadian Health Care Systems

FOR IMMEDIATE RELEASE–February 7, 2005
Kim Becker, Director of Public Relations
Phone: (703) 620-6600, ext. 207
Email: prel@www.amsa.org
Web: www.amsa.org

MEDICAL STUDENTS EXPOSE DIFFERENCES WITHIN U.S. AND CANADIAN
HEALTH CARE SYSTEMS

Reston, Va. – The American Medical Student Association (AMSA), the nation’s largest, independent medical student organization, announces the second annual “Sea-Couver,” a hands-on study tour in Seattle, Wash. and Vancouver, British Columbia that provides medical students the opportunity to compare the U.S. and Canadian health care systems. Students will gain first-hand knowledge of health care delivery in the two countries by touring clinics, talking with patients, and learning from physicians, medical students and policymakers.

The students will compare the publicly-funded, privately-administered Canadian health care system to the fragmented, public-private U.S. healthcare financing system. The United States, while spending over $1.6 trillion on health care annually, remains the only industrialized nation that does not guarantee health care for all citizens. Canada spends far less on health care and guarantees coverage for all its citizens. In addition, students will discuss and compare health care quality indicators, prescription drug costs, medical education and physician satisfaction. At the end of the excursion, students will present their findings at their individual medical schools and facilitate additional education for future
healthcare providers.

As a continuation from last year, participants will videotape “man-on-the-street” interviews. Students interview citizens, policy experts, physicians and patients on their experiences within the two systems. AMSA used last year’s footage to compile a documentary on universal health care. The documentary captured real views on healthcare and is now used as an educational tool on medical school campuses nationwide.

“This generation of physicians inherits a disjointed healthcare system that leaves 45 million people without insurance and millions more without a continuous relationship with the doctor of their choice,” says Dr. Brian Palmer, AMSA national president. “As medical schools often lack adequate health policy education, AMSA offers this opportunity for students to educate themselves and their colleagues about the two health care systems, as we continue to build a better system to serve all patients.”

Filmmaker Michael Moore is working on an expose of the U.S. healthcare system for his next documentary. AMSA believes that universal health care is long overdue and commends the project, as it should bring immense public exposure to the effort of creating affordable healthcare for all.

For over 50 years, AMSA has empowered medical students to continually improve our health care system locally, statewide and nationally for the benefit of our future patients. For more information on AMSA’s universal health care strategic priority, please visit: www.amsa.org/hp/uhcinitiative.cfm.

About the American Medical Student Association
The American Medical Student Association (AMSA), with more than a half-century history of medical student activism, is the oldest and largest independent association of physicians-in-training in the United States. Founded in 1950, AMSA is a student-governed, non-profit organization committed to representing the concerns of physicians-in-training. With nearly 50,000 members, including medical and premedical students, residents and practicing physicians, AMSA is committed to improving medical training as well as advancing the profession of medicine. AMSA focuses on four strategic priorities, including universal healthcare, disparities in medicine, diversity in medicine and transforming the culture of medical education.

To learn more about AMSA, our strategic priorities, or joining the organization, please visit us online at www.amsa.org.

High-deductible plans are only part of the problem

The Commonwealth Fund
January 27, 2005
Half of Insured Adults with High-Deductible Health Plans Experience
Medical Bill or Debt Problems

About half of insured adults with a high-deductible health plan have medical bill problems or debts, compared with less than one-third (31%) of those with lower-deductible plans, according to new research from The Commonwealth Fund. Individuals with high-deductible plans are also more likely than those with lower-deductible plans to experience access problems such as not filling a prescription, or skipping a medical test, treatment, or follow-up when needed, due to cost.

“Health savings accounts coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth Fund President Karen Davis. “The evidence is that increased patient cost-sharing leads to underuse of appropriate care.”

http://www.cmwf.org/newsroom/newsroom_show.htm?doc_id=257751

Comment: Since half of individuals who have high-deductible health coverage are already experiencing medical bill or debt problems, the current policies to shift more individuals into high-deductible plans certainly should be challenged.

But the comparison group, those with lower-deductible plans, should not be ignored. 31% of this group also have medical bill problems or debts!

In their report, The Commonwealth Fund suggests several administrative measures that could be introduced to reduce the negative impact of the higher deductibles. Do not be lulled! Adding to the profound administrative inefficiency of our current system is no solution. But more importantly, since low-deductible plans already are not providing adequate financial protection, nothing short of comprehensive reform will do.

Soaring medical bills account for half of all U.S. bankruptcies

Friday, February 4th, 2005

A new study in the journal Health Affairs has found that half of all personal bankruptcies in the United States are now caused by soaring medical bills. We speak with the author of the report, Dr. Steffie Woolhandler. [includes rush transcript]

————————————————————————–
In addition to focusing on restructuring Social Security, President Bush also spoke about the rising costs of healthcare in this country.

* President Bush, State of the Union address, February 3, 2005:
To make our economy stronger and more productive, we must make health care more affordable, and give families greater access to good coverage — (applause) — and more control over their health decisions. I ask Congress to move forward on a comprehensive health care agenda with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees — (applause) — expanded health savings accounts and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need.

President Bush in his State of the Union address. His comments come as a new study has found that half of all personal bankruptcies in the United States are now caused by soaring medical bills. The Harvard University study – published in the online journal Health Affairs – estimated medical bankruptcies affect about 2 million Americans every year, including 700,000 children. Many of those filing for bankruptcy had insurance, at least at the start of their illness.

*Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard University and co-director of the Harvard Medical School General Internal Medicine Fellowship program. She is a co-founder of Physicians for a National Health Program. She co-authored the study on medical bankruptcies.
Read the report.
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RUSH TRANSCRIPT

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AMY GOODMAN: In addition to calling for tort reform, President Bush also speaks about the rising costs of health care in this country.

GEORGE W. BUSH: To make our economy stronger and more productive, we must make health care more affordable and give families greater access to good coverage, and more control over their health decisions. I ask Congress to move forward on a comprehensive health care agenda with tax credits to help low income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees, expanded health savings accounts and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need.

AMY GOODMAN: And that was President Bush. Juan.

JUAN GONZALEZ: Yes, his comments come as a new study has found that half of all personal bankruptcies in the United States are now caused by soaring medical bills. The Harvard University study published in the online journal, Health Affairs, estimated medical bankruptcies affect about 2 million Americans every year, including some 700,000 children. Many of those filing for bankruptcy had insurance at least at the start of their illness.

AMY GOODMAN: Today we’re joined by Dr. Stephie Woolhandler, Associate Professor of Medicine at Harvard University, Co-Director of the Harvard Medical School General Internal Medicine Fellowship program and one of the co-founders of the Physicians for a National Health program. She joins us in the studio in Boston. Welcome, Dr. Stephie Woolhandler.

DR. STEPHIE WOOLHANDLER: Nice to be here.

AMY GOODMAN: Well, can you talk about the study that has just come out?

DR. STEPHIE WOOLHANDLER: Well, this is the first study to collect detailed financial and medical information from a large cross-section of people filing for bankruptcy in bankruptcy courts. As Juan indicated, we found that fully half of all bankruptcies in the United States are caused by medical illness and medical bills. We’re talking about three-quarters of a million American families pulled through the bankruptcy courts every year by medical illnesses and medical bills. When you count the debtors and their dependents and their children, we’re talking about 2 million Americans every year in bankruptcy due to medical illness and medical bills.

JUAN GONZALEZ: I think most of us would assume that these were folks that did not perhaps have insurance before, but your study found that most of them had insurance when they began, so what happened in the process? Did their insurance stop paying, or what were you able to tell from you study of those bankruptcy files?

DR. STEPHIE WOOLHANDLER: We most certainly were. Surprisingly, we found that 76%, more than three-quarters of all people in medical bankruptcy had health insurance at the onset of the illness that bankrupted their family. So, when the illness started, more than three-quarters of the people had health insurance. Many of them had private health insurance through their jobs. But about one-third of people with private health insurance lost their coverage during the course of the illness. Most often because a breadwinner became too sick to work, and when they couldn’t work, they lost their job-related health insurance. But another very common scenario was people hanging on — hung onto their health insurance throughout the illness, but over the course of two or three years of illness, they accumulated so much out of pocket payments, co-payments, deductibles, and especially excluded items like physical therapy, home care, drugs. Over a period of years, they accumulated so much in out of pocket expenses that they were bankrupted despite having health insurance throughout the illness.

AMY GOODMAN: Can you give us some examples, a particular personal example of someone who has gone bankrupt because of their soaring medical costs?

DR. STEPHIE WOOLHANDLER: Oh, absolutely. One woman was a school teacher. She suffered a major heart attack. She was out of work for many months, lost her health insurance because she was unable to work. She had a hospital bill of $20,000, which was not covered by any insurance. She went to the hospital, and talked to them, and got them to write off the hospital bill. But she was bankrupted nonetheless by doctors’ bills and by the costs of her medications. Eventually, she went back to work and was able to gain insurance again, but she had already been through bankruptcy because of the initial illness. That’s actually fairly typical story of how people ended up in bankruptcy.

JUAN GONZALEZ: But now, normally, wouldn’t someone — let’s say who is working and becomes sick and can no longer work, so they lose their private health insurance, wouldn’t they then fall into the category of a disabled worker who would not only get disability payments but possibly Medicaid coverage as well? In other words, what’s happening to the safety net that should be existing in these kinds of cases?

DR. STEPHIE WOOLHANDLER: Well, most of these people were — had too much money to qualify for Medicaid, but not enough money to pay for private health insurance, if they weren’t working. The average income of these families in the year they filed for bankruptcy was about $25,000 a year. So, they would not qualify for Medicaid, nonetheless, they’re not in a position to be paying $10,000 a year, which is the average cost of family coverage in this country, if you have to pay for it yourself.

AMY GOODMAN: In the piece, the study that came out, illness and injury, as contributors to bankruptcy, you say even universal coverage could leave many Americans vulnerable to bankruptcy unless such coverage is more comprehensive than many current policies. Talk about what you mean.

DR. STEPHIE WOOLHANDLER: Well, many people think they have good insurance. They think they have good insurance, until they get one of these major illnesses that goes on for months or years at a time. And then those co-payments and deductibles and uncovered services start to add up. In our study, the typical person who went into bankruptcy had accumulated about $4,000 a year in out of pocket expenses over a period of two or three years. So that they had about $12,000 in out of pocket medical expenses by the time they went into bankruptcy. But $4,000 in medical costs out of pocket is very easy to accumulate, even with the very best private policy. I happen to know because my own insurance policy through Harvard Medical School is absolutely the Cadillac plan. We get the best plan with the best coverage for our family, and when my daughter had a series of serious orthopedic injuries, two sports injuries in a row one year after another, we accumulated $5,000 in out of pocket costs between the co-payments, deductibles and particularly physical therapy, which her plan only covered two months of, and she needed seven months. We were $5,000 out of pocket a couple years in a row. Now, both her father and I were able to work. We weren’t disabled. It didn’t bankrupt us, but in the situation where a breadwinner is sick, and income falls, $4,000 or $5,000 a year in medical expenses will bankrupt you, and in fact that is what happened to the people in our study, and that’s with the Cadillac plan. That’s with the best of the private health insurance plans. So, what we really need is the kind of national health insurance that they have in much of Western Europe and in Canada where it’s not only universal, that is everyone has it, but it’s comprehensive. Anything that’s medically necessary is covered. Without limits, and artificial limitations that the insurance companies put on the care that people need.

JUAN GONZALEZ: But given the enormous problems that individuals are having with soaring medical costs and even health insurance costs at the same time that many, many large companies and certainly small businesses are also being tremendously squeezed by rising health costs, how is it that the public movement for national health insurance has not solidified in a more systematic or vocal way?

DR. STEPHIE WOOLHANDLER: Well, we do have a lack of political leadership out of both parties, an unwillingness to talk about national health insurance that we were very pleased to hear that Senator Kennedy recently made a major speech advocating what he calls Medicare for all, which would be a form of national health insurance. That would certainly be a good step on the road to covering everyone and giving them comprehensive coverage. I think many Americans are fooled, and they have that private insurance policy, and they think they’re covered. But for so many Americans, private insurance policy is like an umbrella made out of tissue paper. You know, it may look good. It may even help you out in the sprinkle, but it’s totally useless in a downpour. People have umbrellas that literally melt in the rain. When they get so sick that they can’t work, their private health insurance is gone or fails them.

AMY GOODMAN: We’re talking to Dr. Stephie Woolhandler, one of the people who did the study showing that more than half of the personal bankruptcies in the country are due to soaring medical costs. Also one of the leaders of the universal health care movement. What do you think it would take right now, Dr. Woolhandler, for this national movement to solidify? I mean, businesses, as you say, have an interest in this because they’re crushed by the cost. Certainly individuals who have no health insurance, those who have partial health insurance. The sense is that this would cost the country a tremendous amount. The Canadian system has been vilified. What do you think it would take?

DR. STEPHIE WOOLHANDLER: Well, first of all, people need to know that national health insurance would not cost a tremendous amount. For the money we’re now spending we could provide universal coverage, that is cover everyone. We could provide comprehensive coverage, that is, improve the coverage that middle class and insured people now have. Part of why you can do that is by going to national health insurance you generate tremendous savings on administration and paperwork. We have estimated that if the United States health care system were as administratively simple as Canada, we could save $300 billion a year just in paperwork and bureaucracy costs. That $300 billion is plenty of money to cover all of our 45 million uninsured and close the loopholes in the policies of people who now have insurance to make sure that everyone is insured for all medically necessary care and that no one would ever again have to go into bankruptcy because of medical bills.

JUAN GONZALEZ: And in terms of the Bush administration now, in the President’s words this week in his state of the union, what are going to be the initiatives over the next year or two by the Bush administration as you understand them in this arena, and what should people be looking for?

DR. STEPHIE WOOLHANDLER: Okay. Well, Bush left a lot unsaid, including a lot unsaid about what his big initiatives are going to be in health policy. One thing that he is pushing for is what we call nanoinsurance. Insurance policies that are so tiny you cannot see them. Insurance policies that amount to your name on a piece of paper and little else. His new Secretary of Health and Human Services, Mike Leavitt pioneered nanoinsurance when he was Governor of Utah, when he offered Medicaid enrollees an insurance policy that covered $1,000 in primary care, but had no coverage for specialty care, no coverage for hospitalization. He claimed that was insurance. That’s why we call it nanocoverage. Now Secretary Leavitt is saying we’re going to allow any state that wants to do whatever they want and call it health insurance. So, we’re going to be seeing much more of these state policies to shrink down Medicaid, to give people these tiny little policies that are really not protective, and certainly here within our own state, our Governor Romney has been saying, Oh we need to have affordable policies, by which he means these skimpy, nanocoverage policies. Unfortunately, many employers are going the same route. They use a different terminology. They call it consumer driven health care. But what they’re really talking about is saying to workers, You have to have skimpy coverage, stripped down coverage with huge deductibles, and we forget to tell you the fact that in fact if you get sick, you’re going to be bankrupted because the coverage is so skimpy. Similarly with the health savings accounts, the health savings accounts are typically, say, $1,000 in your health savings account, but coupled with a high deductible policy with a $5,000 or $10,000 deductible, meaning that a family could easily accumulate $4,000 to $9,000 in health insurance expenses if someone got seriously ill. What we found from our study is that $4,000 to $9,000 of health expenses particularly if you have it several years in a row, particularly if the breadwinner cannot work, is enough to bankrupt American families.

JUAN GONZALEZ: You mentioned also the states in this — and initiatives to get new state programs to reduce the Medicaid load, now, isn’t it a reality that states themselves should be another constituency in this battle because all of the states are being hit by soaring Medicaid costs. A big part of many state budgets now are just being able to pay for Medicaid, so you would think that they would be another constituent group that should seek some sort of a national comprehensive solution.

DR. STEPHIE WOOLHANDLER: Well, unfortunately many state governments are in the hands of conservative allies of the Bush administration. Even though the Bush cuts in Medicaid will be disastrous for their states, they are not being very vocal and speaking out about that. I mean the real constituency for national health insurance is the American people. Its not just poor people, its not just the 45 million uninsured people, but it’s solidly middle class American families who think they have good insurance until they get sick. The families bankrupted in our study were middle class. 56% of people in bankruptcy had gone to college. 56% owned their home. When we looked at their occupational status, they were in the middle range of occupations, secretaries, schoolteachers, nurses. These were not the poorest of the poor. These were families literally ripped out of the heart of the American middle class when they had the double disasters of getting sick, and often losing their jobs.

AMY GOODMAN: Finally, Dr. Woolhandler, we have a Democratic Party — you mentioned that Kennedy was talking about universal health care, but overall, the Democratic Party has not called for universal health care. Hillary Clinton in the ascendancy, she did not propose it when she had the ability to propose it, in fact was taken down in a very big way, even preserving the insurance companies. So, who will represent this alternative, this block for universal health care?

DR. STEPHIE WOOLHANDLER: Well, what we need to do is organize a movement to hold the politicians’ feet to the fire and say to them, Unless you support universal health care you will not get re-elected. That was something that was going on in the early nineties and late eighties, congressmen and senators who were being elected at least partially because they said they supported universal health care. So thats what its going to take. Its going to take a movement to raise the issue, to pressure our politicians to listen to their constituents rather than listening to the drug industry and insurance industry that now just about the only people benefiting from the current health care finance system.

AMY GOODMAN: Dr. Stephie Woolhandler, thank you very much for being with us, one of the people that did the study on the personal bankruptcies.

JUAN GONZALEZ: If people want to copy of the study —

AMY GOODMAN: If people want to get a copy, where can they go on the web?

DR. STEPHIE WOOLHANDLER: It’s on the website on healthaffairs. Its called a web exclusive but the journals name is Health Affairs. You can find them on the web. It will be on the web for a couple of weeks, and probably for a couple of months.

AMY GOODMAN: We’ll also link to it at democracynow.org.

DR. STEPHIE WOOLHANDLER: Thank you.

AMY GOODMAN: Dr. Stephie Woolhandler, Associate Professor of Medicine at Harvard University, Co-Director of the Harvard Medical School General Internal Medicine Fellowship and one of the co-founders of the Physicians for a National Health program.
http://www.democracynow.org/article.pl?sid=05/02/04/1537243
www.democracynow.org

Employers and millionaires recognize the adverse consequences of today's health plans

California HealthCare Foundation
February 2, 2005

California Employers View Health Care Cost-Sharing as Double-Edged Sword
Employers believe cost sharing encourages workers to spend wisely, but may
result in foregoing needed care

Increasing employee cost-sharing is now the most common strategy used by
California employers for reining in health care costs. But even as they shift costs, employers are concerned about the effects, according to recent surveys commissioned by the California HealthCare Foundation (CHCF) and conducted by Harris Interactive of California employers, residents, and adults who are chronically ill.

While the strategy has led a majority of employers to feel that their health care costs are more under control today than they were a couple of years ago, more than 75 percent of them now say cost-sharing causes consumers to forgo needed medical care and has a negative impact on individuals with chronic conditions. Over 40 percent of employers also believe that cost sharing reduces the productivity of workers.

Consumers confirmed employer concerns. The survey of the general population of adults in California found that one in seven adults had a medical condition but did not obtain care due to cost in the past year. Non-compliance with recommended medical treatment is particularly common among those with low incomes and those in fair or poor health, according to the survey.

http://www.chcf.org/press/view.cfm?itemID=108787

And…

kaisernetwork.org
Daily Health Policy Report
February 03, 2005
Survey Indicates Millionaires Not Insulated From Rising Health Costs

A new survey (by North Trust) of 1,312 people with “at least $1 million to invest, not including the value of their residences” indicates that significant assets do not “eliminate worries over increasing health care costs,” Dow Jones/Wall Street Journal reports.

North Trust Senior Vice President Thomas Hines said, “What happens is that when you’re no longer part of a larger group, health care plans have restrictions. If you have a catastrophic illness over a significant period of time, this can quickly” deplete benefits (Chu, Dow Jones/Wall Street Journal, 2/3).

http://www.kaisernetwork.org/daily_reports/rep_hpolicy.cfm

Comment: These two reports make it much easier to understand yesterday’s
Health Affairs article confirming that 76% of individuals with medical bills filing for bankruptcy had insurance coverage at the start of their illness. The CHCF/Harris Interactive survey confirms that three-fourths of employers now recognize that current employer-sponsored plans are no longer providing enough protection to ensure financial security in the face of medical debt.

But when millionaire investors are worried about the personal financial impact of health plan restrictions, we know that we’ve got a problem! (For those who are new to this list, I’ll say once again that we can remove all financial barriers to care and provide comprehensive coverage for everyone, without spending any more than the $1.8 trillion that we already spend, merely by adopting a universal single payer system.)

A Healthy Choice(In These Times)

A Healthy Choice
A movement builds to take on Wal-Mart
By Hans Johnson January 25, 2005
In These Times
 
Until last year, Wal-Mart, the global retail chain known for undercutting local competitors by curbing wages and benefits, enjoyed so much clout that it placed its sprawling warehouse stores practically at will. But grassroots challenges to the healthcare practices of Americas largest employer have stalled its expansion bids, exposing a bullying streak beneath its homey veneer of red, white and blue.
 
The skirmishes feature charges that Wal-Mart racks up huge profits while covering health care for just 45 percent of its workers and freeloading on taxpayers, who are stuck with the tab for the uninsured and their family members. The conflict pits a wide alliance of interfaith, labor and community groups against a retail chain whose profits topped $9 billion in 2003, with 3,200 outlets and 1.2 million employees in the United States alone.
 
In defending the very premise of the New Deal and reasserting the notion of a social contract, the campaign to rein in Wal-Mart could define the next decade of progressive organizing, policy and politics.
 
The platform that Wal-Mart keeps advocating is bringing in jobs to low-income communities? says Rev. Michael Pfleger of St. Sabinas Catholic Church in Chicago. But low-wage jobs, often without health care, keep families in poverty and keep people in shackles.
 
Pfleger marshaled a diverse coalition of ministers, small business owners and union activists that in May headed off Wal-Marts drive to change zoning laws and open a mega-market on his citys South Side. A Wal-Mart spokesman even had to refute charges that the companys wage and health policies are exploitative. We are not the evil empire he told USA Today. A majority of the aldermen were poised to block the proposal, and the bid was withdrawn.
 
At Wal-Mart, full-time workers have to endure six months ”and part-timers, two years” before applying for health coverage through the company. Wal-Mart told the New York Times in November that about 77 percent of its employees are eligible for health coverage through the company plan. But since Wal-Mart saddles its staff with 33 percent premiums, the coverage often costs more than $200 a month per worker to maintain”a steep price for workers making between $8 and $10 per hour. As a result, just 58 percent of those eligible, less than half of all workers, or about 537,000 people, actually have the insurance.
 
This compares with the complete coverage that became common for workers and their dependents after World War II. The rise of collectively bargained union contracts in the era of Franklin Roosevelt and Harry Truman gave rise to the notion of a so-called social contract. It stipulated that a worker receive livable wages and health benefits in return for loyal hard work.
 
Not all companies have torn up the social contract. Costco, a competitor in the large-scale retail business, provides insurance to more than 19 out of every 20 of its workers and pays more than 90 percent of the premium.
 
When Wal-Mart bows out on covering the healthcare costs of staff members, the public often picks up the tab. More than 10,000 Georgia children whose parents work at Wal-Mart are on a state health program, thus neatly passing on the $10 million yearly expense to state residents. And in California, taxpayers are footing the bill for about $32 million in healthcare costs from Wal-Mart workers that the employer would typically cover.
 
Such revelations are the latest black eye in a string of high-profile setbacks. In August, community activists along with union members involved in the Metropolitan Washington Council of the AFL-CIO discouraged Wal-Mart from plunking down a mammoth store in the citys northeast quadrant. Facing rising community hostility and the threat of bad publicity, Wal-Mart backed down.
 
The triumphs in Chicago and Washington follow an April victory near Los Angeles. By a two-to-one margin, voters in Inglewood rejected the retailers bid to circumvent a zoning board and approve a superstore widely seen as disruptive to local businesses, traffic patterns, and the quality of life.
 
Wal-Mart has fought back, joining with California Gov. Arnold Schwarzenegger in attacking a state ballot measure that would have mandated either corporate coverage for workers or payments into a state plan. Opposed by half a million Wal-Mart dollars, Proposition 72 very narrowly failed on November 2.
 
Local coalitions and policy-makers remain keen to put some checks on the retail giant. Wal-Mart executives chose to remove the responsibility from themselves. Mike Kreidler, former congressman and current state insurance commissioner for Washington state told the New York Times. He is working with state lawmakers to pass a measure similar to the California proposition.
 
Having succeeded in moving the debate about Wal-Mart beyond the publics almost religious fixation on low prices and into the realm of healthcare, activists are adhering to theologian Reinhold Niebuhrs encouragement to be wiser than our creed. Niebuhr, a mentor of Martin Luther King Jr., understood the danger of Americans being seduced into undermining their own way of life. Faced with a grave threat to healthcare, labor and community leaders are reasserting Kings vision of a beloved community and rising to the occasion to create it.
 
Hans Johnson, a board member of the BISC Foundation, writes about labor, religion and politics from Washington, D.C

Group pushes for national health insurance (Pittsburgh Post-Gazette)

Thursday, February 03, 2005
By Christopher Snowbeck

If you think government bureaucracy is bad, Mike Stout thinks you should look at the current state of private health insurance.

Stout, who owns a small printing business in Homestead, recently underwent treatment for a kidney stone at a local hospital. Since then, he’s received 56 separate documents from both his health plan and the hospital detailing his benefits and the various charges for his care.

When he underwent the same procedure at the same hospital seven years ago, Stout received just one statement of his benefits.

“My own insurance company can’t even explain all this,” Stout said. The flood of paperwork is indicative of a broader problem with administrative waste, Stout said yesterday at a Downtown news conference, where he joined union leaders and a physician in calling for a government-run national health insurance plan.

The group took as its point of departure a study released yesterday showing that about half of all personal bankruptcies in the United States strike people in the wake of a family illness or injury. The study found that many of those bankrupt households were led by middle-class workers who had health insurance at some point in their illness.

Using the study, researchers estimate that about 29,000 people in Pennsylvania were caught up in medically related bankruptcies last year, said Dr. William Wood, a Pittsburgh physician and member of Physicians for a National Health Program.

While some attorneys who handle personal bankruptcy cases in the Pittsburgh area questioned the study, at least one longtime practitioner said the findings matched her experience.

“I would say that about one-third of the bankruptcies are people who do have illnesses going on, or are elderly with medical issues,” said Carlota Bohm, a Downtown attorney who deals with personal bankruptcies.

Many households’ credit card debts are driven by medical bills, Bohm said, adding that she’d seen a significant increase in such cases in recent years.

————————————————————————
(Christopher Snowbeck can be reached at csnowbeck@post-gazette.com or 412 263-2625.)
 

Employers and millionaires recognize the adverse consequences of today’s health plans

California HealthCare Foundation
February 2, 2005

California Employers View Health Care Cost-Sharing as Double-Edged Sword
Employers believe cost sharing encourages workers to spend wisely, but may
result in foregoing needed care

Increasing employee cost-sharing is now the most common strategy used by
California employers for reining in health care costs. But even as they shift costs, employers are concerned about the effects, according to recent surveys commissioned by the California HealthCare Foundation (CHCF) and conducted by Harris Interactive of California employers, residents, and adults who are chronically ill.

While the strategy has led a majority of employers to feel that their health care costs are more under control today than they were a couple of years ago, more than 75 percent of them now say cost-sharing causes consumers to forgo needed medical care and has a negative impact on individuals with chronic conditions. Over 40 percent of employers also believe that cost sharing reduces the productivity of workers.

Consumers confirmed employer concerns. The survey of the general population of adults in California found that one in seven adults had a medical condition but did not obtain care due to cost in the past year. Non-compliance with recommended medical treatment is particularly common among those with low incomes and those in fair or poor health, according to the survey.

http://www.chcf.org/press/view.cfm?itemID=108787

And…

kaisernetwork.org
Daily Health Policy Report
February 03, 2005
Survey Indicates Millionaires Not Insulated From Rising Health Costs

A new survey (by North Trust) of 1,312 people with “at least $1 million to invest, not including the value of their residences” indicates that significant assets do not “eliminate worries over increasing health care costs,” Dow Jones/Wall Street Journal reports.

North Trust Senior Vice President Thomas Hines said, “What happens is that when you’re no longer part of a larger group, health care plans have restrictions. If you have a catastrophic illness over a significant period of time, this can quickly” deplete benefits (Chu, Dow Jones/Wall Street Journal, 2/3).

http://www.kaisernetwork.org/daily_reports/rep_hpolicy.cfm

Comment: These two reports make it much easier to understand yesterday’s
Health Affairs article confirming that 76% of individuals with medical bills filing for bankruptcy had insurance coverage at the start of their illness. The CHCF/Harris Interactive survey confirms that three-fourths of employers now recognize that current employer-sponsored plans are no longer providing enough protection to ensure financial security in the face of medical debt.

But when millionaire investors are worried about the personal financial impact of health plan restrictions, we know that we’ve got a problem! (For those who are new to this list, I’ll say once again that we can remove all financial barriers to care and provide comprehensive coverage for everyone, without spending any more than the $1.8 trillion that we already spend, merely by adopting a universal single payer system.)