Without Health Benefits, a Good Life Turns Fragile

NY Times

March 5, 2007

By ROBERT PEAR
SALISBURY, N.C. Vicki H. Readling vividly remembers the start of 2006.

"Everybody was saying, ŒHappy new year,"² Ms. Readling recalled. "But I remember going straight to bed and lying down scared to death because I knew that at that very minute, after midnight, I was without insurance. I was kissing away a bad year of cancer. But I was getting ready to open up to a door of hell."

Ms. Readling, a 50-year-old real estate agent, is one of nearly 47 million people in America with no health insurance.

Increasingly, the problem affects middle-class people like Ms. Readling, who said she made about $60,000 last year. As an independent contractor, like many real estate agents, Ms. Readling does not receive health benefits from an employer. She tried to buy a policy in the individual insurance market, but having had cancer ‹ could not obtain coverage, except at a price exceeding $27,000 a year, which was more than she could pay.

"I don¹t know which was worse, being told that I had cancer or finding that I could not get insurance," Ms. Readling (pronounced RED-ling) said in an interview in her office, near the tree-lined streets and stately old homes of this city in the Piedmont region of North Carolina.

It is well known that the ranks of the uninsured have been swelling; federal figures show an increase of 6.8 million since 2000.

But the surprise is that the uninsured are not necessarily the poor, the unemployed and the undocumented. Solidly middle-class people like Ms. Readling are one of the fastest growing subgroups.

And that is one reason, according to a recent New York Times/CBS News poll, that the problems of the uninsured have jumped to the top of the domestic political agenda in Washington and on the campaign trail.

Today, more than one-third of the uninsured 17 million of the nearly 47 million have family incomes of $40,000 or more, according to the Employee Benefit Research Institute, a nonpartisan organization. More than two-thirds of the uninsured are in households with at least one full-time worker.

Ms. Readling's experience is typical; people who have had serious illnesses often have difficulty obtaining insurance. If coverage is available, the premiums are often more than they can afford.

While the government does not have an official definition of 'middle class,' one commonly used point of reference is the median household income, which was $46,326 in 2005.

Katherine Swartz, a professor of health policy and economics at Harvard, said the soaring cost of health care was a major reason for the increase in the number of uninsured. She said it also reflected long-term changes in the economy, like the decline in manufacturing jobs and the growth in the share
of workers in service industries and small businesses, which are less likely to provide health benefits.

Moreover, Ms. Swartz said, "Companies have become more aggressive in hiring people as temporary or contract workers with no fringe benefits."

The National Association of Realtors says 28 percent of its 1.3 million members are without health insurance.

"Because real estate agents are independent contractors, they are forced into the individual insurance market, where there is no negotiating or leverage," said Pat V. Combs, president of the association.

As an independent contractor with a Century 21 real estate brokerage, Ms. Readling had bought insurance on her own, a temporary extension of coverage from a prior job. But she was unable to renew it after she had surgery for breast cancer in 2005. Most insurers would not offer her coverage, she said, and one carrier quoted a price of $2,300 a month for coverage with a
deductible of $5,000 a year.

Concerns about health insurance permeate her life.

To save money, Ms. Readling said, she defers visits to the doctor and stretches out her cancer medication, which costs her about $300 a month. She takes the tiny pills three or four times a week, rather than seven days a week as prescribed.

"I really try to stay away from the doctor because I am so scared of what everything will cost," said Ms. Readling, who is divorced and has twin 18-year-old sons. Before every doctor's visit and test, she asks, "How much are you going to charge me?" She says she tries to arrange 'the best deals I
can." But in many cases, the price is still unaffordable, and I have to do without."

Even those with insurance have reason to be concerned, economists say, because they end up paying for the uninsured in various ways. Some of the costs are also passed on to taxpayers and employers. To help cover the cost of treating the uninsured, hospitals often increase charges to other
patients. Insurers then increase premiums for companies that provide health benefits, and they in turn shift some costs to employees.

Ms. Readling is engaged to be married in June, to another real estate agent. But she said she may postpone the wedding because she would not want her husband to be legally responsible for her medical bills.

"I am scared to get married because I don¹t have insurance," Ms. Readling said. "If I have to go to the hospital and I can't pay my hospital bills, what happens? Do they go after him? Can they take your home?"

To collect unpaid medical bills, health care providers often obtain judgments against a patient¹s spouse, as well as the patient, and file liens against their homes. Ms. Readling says she does not own a house, but her fiancé does.

The idea of universal coverage, in the form proposed by President Bill Clinton, proved politically untenable. Since the Clinton plan collapsed in 1994, the politics of health care have changed because of the steady rise in health costs, the increase in the number of uninsured and the erosion of
employer-sponsored insurance. Politicians are once again speaking about universal coverage as a goal, though opinion polls show that many voters still oppose the idea of a government-run health care system.

Ms. Readling said it was stressful enough visiting doctors every few months for her cancer follow-ups. Without coverage, she said, the experience is even more stressful.

"When you go to any medical person and they ask for your insurance card, you are so ashamed because you have to say, "I don¹t have insurance," Ms. Readling said. "You just feel like you are dirt."

Ms. Readling said she often woke up at night, terrified of the cost of getting sick without insurance.

"Anything that goes wrong with my health could destroy me financially," Ms. Readling said. "I could be ruined."

She said she had never voluntarily allowed her insurance to lapse and could not understand why she was being blackballed.

"What did I do wrong?" Ms. Read-ling asked. ³Why am I being punished? I just don¹t understand how I could have fallen through this horrible, horrible crack."

Knowing her health benefits from her prior job would expire in January 2006, she began shopping for a new policy in May 2005. But in June 2005, she learned she had cancer.

"At that point,

" Ms. Readling said, "I called everybody I could think of, begging for help. But no insurer would touch me."

Barbara Morales Burke, the chief deputy insurance commissioner of North Carolina, said state law did not guarantee the availability of health insurance for individuals. ³Most insurers decline to issue policies to those individuals whom they deem to be too risky because of their medical history,² Ms. Morales Burke said.

Blue Cross and Blue Shield of North Carolina will sell to anyone, regardless of the person¹s medical condition, she added, but the premiums may be very high for people who have had serious illnesses.

Heidi Deja, a spokeswoman for Blue Cross and Blue Shield of North Carolina, said, ³Rates are based on the anticipated cost of providing care.² For people who have had serious illnesses, she said, monthly premiums ³can run into the thousands of dollars.²

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people because of pre-existing conditions. But consumer protections are much more extensive in the group health insurance market.

³In the individual market, the federal protections provide precious little help to people seeking coverage,² said Karen L. Pollitz, a research professor at the Georgetown University Health Policy Institute.

When Ms. Readling was shopping for insurance, she found two responses particularly galling. One insurer, she said, suggested she return to her prior job, at a furniture company, so she could participate in its group health plan, though she loved her work as a real estate agent. Another
insurer suggested she remarry her former husband to get back on his insurance plan.

Working with her doctors, Ms. Readling raced to get as many tests as possible before her coverage expired. She recalled her anxiety in the final months: ³It¹s like a freight train coming at you, and it¹s going to get you. And there was nothing I could do.²

Ms. Readling said she was mystified by the inability of real estate agents to band together and buy health insurance as a group.

³Why can¹t Realtors in North Carolina, or a few counties, have coverage under one umbrella?² she asked. ³You would think that some insurance company
would want our business.²

Janet S. Trautwein, executive vice president of the National Association of Health Underwriters, which represents insurance agents and brokers, said employee groups were more attractive to insurers for several reasons.

³In a group health plan,² Ms. Trautwein said, ³the employer typically pays a large share of the premium, so most employees sign up as soon as they are eligible, regardless of their health status.²

³The health plan covers a mix of sick and healthy workers,² she said. ³By contrast, individuals and independent contractors are more likely to defer coverage until they need it, so the pool of people insured is, over all, less healthy. Sick people consume more health care. As a result, the cost to
insure them is higher.²

Though satisfied with her care, Ms. Readling continually wonders if doctors and nurses treat her differently because she is uninsured.

³Are they going to turn their nose up at you because you don¹t have insurance?² Ms. Readling asked. ³Will they take care of other people first? They can make more money on patients with insurance. What am I? I am just a financial loss to them.²

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