I read with great sympathy danceattakjg's recommended diary about his wife's situation--uninsured and with a newly discovered chronic medical condition. I was especially sympathetic because my husband and I are currently facing massive medical bills due to a medical condition.
And we have insurance. In fact, we have the kind of health insurance plan that many, especially conservatives, have pushed as a solution to the health care problem--a high-deductible medical plan with a health savings account. I don't believe these plans do what their proponents claim, and they can land middle class families in loads of debt.
First of all, a bit of history. I work for a small business; our Atlanta office has about 40 employees. It is a great company, and they are doing their best to take care of their employees and offer good benefits. However, the premiums for health insurance for skyrocketing, even more for us than for other companies, because we employ mostly senior-level employees and have a large proportion of people in ill health. The company was at the point of no longer being able to provide benefits.
They shopped around, dumped our old insurance (which was horrible at paying claims, anyway), and were sold on high-deductible plans by one of the country's major insurers. Claims would go down, they were told, and so the premiums could be lower. And, they were convinced, the HSA's functioned as back-up IRA's, so it was liked they were offering a new benefit. We had a glowing meeting in which they told us how great this new insurance was going to be. And I believed it.
"We're going to see claims go down," puffed the one conservative partner, who was very pleased we were trying out this plan. "People are going to like having that money in the account."
And now, staring at $5000 of debt with no money in the HSA and still paying $300 a month for my family's health insurance, I feel differently. Where did it all go wrong?
First of all, a bit on how high-deductible plans work. Basically, you have to pay all costs up to your deductible (not the originally billed costs, but the negotiated insurance price). To qualify as 'high-deductible', the deductible must be at least $2200 for a family, but our plan's deductible was $3500. Once you go over the deductible, you only have to pay 10% of all costs.
To help meet these costs, you are allowed to put money into a health savings account, pre-tax. Because my employer was trying to be awesome, they also put $1750 into the account at the beginning of each year to help people cover costs, and then it's up to you how much additional money you put into the account. I was trying to be conscientious and responsible, so I matched that amount over the course of the year (i.e., I put about $140 a month into the account).
However, even though these plans are sold as being inexpensive, they typically don't cost any less than normal insurance. The premium is $500 a month for family coverage for our plan; my employer covers 40% of that, but we still pay $300 month. Meaning that, in toto, I was out $440 a month for health care. But I thought I was covered.
It begin to go wrong after my first baby. It was an uncomplicated birth, and I was only in the hospital for 2 days. Total hospital bill (NEGOTIATED price) was $10,000. It was the beginning of the year, and we only had about $2000 in the account. We were responsible, however, for $4200 in bills. Add to that the fact that I only got 60% of my pay during my maternity leave. At that point, we did have money in our regular savings account to help cover the difference, but we drained it, and I ended up having to go back to work sooner than planned. And for the rest of the year, I learned that 10% can still seem like a lot, as we had the routine well baby checks and the periodic very sick baby doctor visits.
So the next calendar year, when baby no. 1 was about 15 months old, I got pregnant again. We knew what was coming and were planning on putting extra in our HSA that year so we would have extra to cover the birth costs. Unfortunately, I start having very scary heart palpitations (Resting heart rate of 150-160, several times throughout the day). So, goodbye to that plan, while they put me on a heart monitor under the care of a cardiologist, and do a bunch of tests to make sure I don't have a condition that could threaten me or the baby. Fortunately, I'm clean; pregnancy was just having a stronger than usual affect on my heart. So, we take a big sigh of relief--and mourn for that $1200 or so we had to spend (since for that year we had not yet met the deductible) on the tests.
So, baby no. 2 came early in the next calendar year. Slightly cheaper, since I forego the epidural, but it still ends up costing close to $4000, and once again we only have about $2500 in the account, but not as much in savings. So I go on a payment plan, which is harder that I expected to keep up with since now we two, we CONSTANTLY have $20 here or $40 there, even though we're only paying 10%.
So, New Years 2009. The 1750 from my employer goes into the account, and I pay off the medical bill from the birth. We're free and clear, and are going to start getting ahead with the HSA, right?
The first week of January, my husband starts having abdominal pain. BAD abdominal pain. We made an appointment with the doctor, but it's not for a week, and they tell us that we need to go to the emergency room if it becomes severe. After groaning through it for three days he finally says he needs to go to the emergency room. And I take him seriously, because my husband is the kind of man who will give himself stitches (yes, he has done it before).
He had a perforated bowel. He was in the hospital for five days. And then more bad news. Even though he's WAY too young for it, he has severe diverticulosis, and part of his colon needs to be removed or he will suffer more perforations.
The bill for the hospital stay? About $10,000 (Is this just the going rate for having to be in the hospital?). So we're already in way over our head, with less than $1000 in our HSA.
But we went ahead with the surgery, anyway. Don't want to risk his life, right, just to stay out of debt?
And it didn't go as planned. After the surgery, which was supposed to be routine (though major), his lungs didn't kick back in after the anesthesia. The doctor walks into the waiting room and I think she's about to tell me that I can go back and see him. Instead, she tells me that he went into severe bronchospasms, had to be intubated, and they were taking him to the ICU.
So I spent the next 36 hours at the hospital whenever babysitters were available, calling every hour when they weren't. They did extra procedures that I had to give consent for that I didn't understand (what the hell is a bronchoscopy, really?) Fortunately, they were finally able to take the tube out, the rest of his recovery went ok, and he is now back home.
In the end, our hospital + doctor bill, NEGOTIATED price, was $51,000. Makes me miss those $10,000 hospital bills...
Now, to the people who push these plans as a way to keep costs down: did the high deductible plan really make me behave differently? Of course not. Should it have? Should we have not had children? Should I have decided to risk it, and not had any tests when my heart was behaving strangely? Should my husbad have not had the surgery, even though the doctor told us it could be life-threatening and possibly a MORE difficult and expensive surgery if we waited? When the doctor said he was going to the ICU, should I have said, 'don't bother, just take the tube out, I'm sure he'll be fine, we can't afford the ICU?'
I am not looking for sympathy. Our situation is not horrible. We're in debt, we're on a big payment plan, but we're not dealing with anything chronic and with some belt-tightening we are going to get through it.
I tell my story because I want to show how far from ideal high-deductible plans really are. And also because I want to illustrate the fallacy of the idea that making consumers share in medical costs will reduce their use of services. Many ideas for health care reform, mainly those put forth by the right, but many that are considered reasonable solutions by the left, involve some level of cost-sharing.
The fact is, as the Kaiser Foundation has found, cost-sharing does reduce utilization of services, but not necessarily in a good way. Fact is, non-doctors aren't always the best at discerning what is necessary and what isn't, and people with high-deductible plans are just as likely to opt out of surgery for diverticulosis as they are to opt out of care they don't need.
Our company's token conservative was right. Yes, I would like having money in that account. Unfortunately, medical necessity has dictated otherwise. As our country (hopefully) moves toward a saner and juster health care system, we should steer clear from schemes that try to encourage people to say, "No, no ICU for us!"