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Jennifer Anderson, a former high school track star, worked hard to take care of her body. She'd accepted an administrative position at Spalding University in Louisville, Kentucky, partially for its good healthcare plan -- not because she needed it, but because it was important to her. She thought it was a smart choice.
Soon after she started her job, her hands began to hurt, followed by her wrists and many of her joints. In 2002, when Jennifer was just 21, doctors diagnosed her with degenerative rheumatoid arthritis, a disease that threatened to leave her crippled in several years. A few months later, surgeons replaced one of her hips.
By that point the soreness was so extreme that she struggled to pick up her toddler son. Still, she vowed to do whatever it took to get better. Then, in the spring of 2003, Jennifer's determination was derailed for the most frustrating of reasons: Her insurance company denied her full coverage for Enbrel, the one drug her doctor said could stop the pain and slow the disease. As a working single mom earning $20,000 a year, Jennifer could not afford the $350 per month co-pay that her insurer told her she'd have to foot for the "specialty drug."
"I was shocked," she says. "This medicine was going to help me. How could they not cover it? Isn't that why I had insurance to begin with?"
As it turns out, simply having health insurance is not the safety net you think it is. Most plans, even the ones many Americans get through their employer, are limiting their policies to offset the ever-rising cost of medical procedures. Approximately one in seven American adults with insurance was "underinsured" in 2007, according to a survey by the Commonwealth Fund, an independent health-research organization. Translation: Twenty-five million people spent 5 percent to 10 percent of their income on out-of-pocket health costs, up from 16 million in 2003. The consequences are staggering: Since 2000, five million families have filed for bankruptcy after incurring medical debt, according to Elizabeth Warren, a Harvard Law School professor. And 76 percent of them had health insurance.
It's no surprise, then, that the underinsured are becoming increasingly unhealthy. More than half report skipping doctor's visits because they can't afford them or because they must spend the money on food, gas, rent, and mortgages. That means missing annual ob-gyn exams, mammograms, and general checkups -- the kinds of preventive care that help you catch a serious ailment before it becomes untreatable. Once sick, the underinsured often fall into a gap: They have too much coverage to qualify for Medicaid or free drug programs run by pharmaceutical companies but too little to cover the expense of treatment. Some women would actually be better off if they let themselves go broke. "To qualify for Medicaid, you can't have assets of more than $2,000," says Nancy Davenport-Ennis of the National Patient Advocate Foundation. "There is no safety net if you are diagnosed with a serious illness and have inadequate insurance."
Even the healthy are at risk. Last year the percentage of workers with annual deductibles greater than $1,000 (for single coverage) rose from 12 percent to 18 percent, a trend that experts anticipate will continue as employers try to cut costs. That means an unexpected injury, such as a broken foot or sprained ankle, could cause you to rack up significant medical debt before your coverage kicks in. The average cost to set a broken arm is $6,700 (according to a government survey of U.S. hospitals); even with insurance, a woman could be on the hook for $1,000, plus co-pays of $35 for follow-up visits. And that doesn't include treatments that some policies don't cover at all, like physical therapy.
Mollie Michie-Lepp, 34, a former college swimmer who hits the gym five days a week, never thought she'd be faced with medical debt. She received health insurance through her employer, a small business-management firm; like Jennifer, Mollie assumed she was well covered. Two years ago she got pregnant -- and found herself on the hook for $400 in doctor co-pays and ultrasounds plus another $1,700 because her insurance wouldn't fully pay for her routine delivery. Although Mollie's debt was small compared with some insurance horror stories, it still left its mark. "It took almost two years to pay it off," she says. "I thought I'd covered myself, given the amount deducted every two weeks from my paycheck. Now I realize it's a lot more complicated than that."
Mollie is still rolling the dice with her healthcare. One of her employer's plans has a $1,500 deductible she'd have to reach before her insurance picks up the tab; another has no deductible, but charges $35 co-pays per visit and limits coverage of prescription meds. Mollie opted for the second plan. "At least I know how much I'm paying up front," she says. To save money, she declined her company's offer to set up a Section 125 plan, which takes pretax money out of a monthly paycheck to offset unexpected costs. "I know I'm gambling that I won't get sick," Mollie says. "But I'm healthy, and I take care of myself. I don't want to give money away that I won't use."
It's a risk that leaves her vulnerable. In 2007 some 72 million Americans had ongoing medical debt -- fending off collection agencies or using their savings to cover outstanding payments. Leigh Borland, 46, a Realtor in the Chicago area, knows the horrors of medical debt. In early 2006, she was diagnosed with a rare sarcoma on her colon. Her private insurance plan covered thousands of dollars for surgery, the hospital stay, and follow-up visits to the oncologist. It was only when Leigh went to buy her first month's supply of Gleevec, the pill form of chemotherapy, that she discovered a problem. As she pulled out her wallet to hand over her $25 co-pay, the pharmacist passed her a bill for $2,715.80. Her insurance, she was told, did not cover the medication.
"I went to my car and cried," Leigh says. "I needed this drug. But who on earth can pay $2,700 every month?"
It turned out that Gleevec's manufacturer, Novartis, had a fund providing direct payment assistance for patients -- but only for those with no insurance at all. (It has since begun to cover certain underinsured cases.) Reluctantly, Leigh put the pills on her credit card, knowing she could afford only a month or two despite her doctor's advice that she take it for the foreseeable future. "I thought, Will I have to file for bankruptcy?" she says.
Luckily for Leigh, a social worker she consulted told her about Patient Services Incorporated, a nonprofit charity that helps underinsured Americans pay for medical expenses. The good news: Patient Services offered to cover her nearly $33,000-a-year prescription. The bad news: Her insurance company raised its premium from $3,000 in 2005 to $9,900 in 2008.
Between 1999 and 2008, insurance premiums rose 119 percent while the average salary increased 34 percent. "Employers [who provide monthly coverage for 159 million Americans] have to make tough choices," says Kim Bailey, a senior health-policy analyst with Families USA. "Limiting coverage keeps costs down, but people are paying a lot more out-of-pocket."
In 2008, America's Health Insurance Plans (AHIP), an industry association, published its recommendations for fixing the system, including a long-term goal of instituting a best-practice model, whereby doctors use the same proven procedures and treatments for each ailment, eliminating the potential cost of extra doctor visits and tests.
Meanwhile, the country is watching to see if President Obama will make good on his campaign promise to enact a healthcare plan that increases affordability and extends coverage to all Americans by the end of his first term.
For now, however, the responsibility for having enough insurance rests with the individual. "People have to educate themselves about what their plan covers," says David Knowlton, president and CEO of New Jersey Health Care Quality Institute. That means reading the fine print to understand the limits of coverage: knowing how the deductibles work, what services and medications are included and where you might be left short. Knowlton also recommends opening a "cafeteria" account, in which pretax money is taken out of each paycheck to be used for unexpected medical problems. Some companies offer to match these funds. Otherwise, even young, healthy women should set aside at least the amount of their annual deductible as a safety net for any catastrophic event. "It's not money wasted," Knowlton says. "The bottom line is, you want to be protected."
If you have insurance but still can't pay your medical bills, one of the following organizations may be able to assist with some of the costs.
The HealthWell Foundation, healthwellfoundation.org, 800-675-8416
Patient Access Network Foundation, patientaccessnetwork.org, 866-316-7263
Patient Services Incorporated, uneedpsi.org, 800-366-7741
CancerCare, cancercare.org, 800-813-4673
Co-Pay Relief, copays.org, 866-512-3861
Originally published in FITNESS magazine, February 2009.