Health Care Gamble: To Pay or Not to Pay?

Unable to Afford Insurance, and Skeptical of its Benefits, Millions of Americans Take Their Chances

(AP)  Call it a health care gamble: the decision by some people to opt out of health insurance, paying cash for routine care while playing the odds that an accident or catastrophic illness won't plunge them into financial ruin.

President Barack Obama's goal of requiring everyone to carry health insurance has drawn a great deal of skepticism from this group. Many pay far less for health care than they would on premiums, and doubt that insurance would even cover them if they needed it.

It's not known how many of the nearly 50 million people in the United States voluntarily go without coverage. Researchers at the Kaiser Family Foundation, which studies the uninsured, said most are young, generally healthy adults who are self-employed or are in relatively low-wage jobs that do not offer insurance coverage and don't pay enough for workers to afford individual policies.

"Income is key and most of the uninsured have low incomes," foundation researcher Karyn Schwartz said. "If you look at your budget and think you can't afford it or can afford it if you eat only ramen noodles, you may choose not to get it."

All the health care plans that have emerged from the Democratic-controlled Congress would require everyone to have insurance, the way drivers in nearly every state must purchase auto insurance. Proponents say that by bringing everyone into the system, medical risk is spread over a broader population, bringing costs down.

Read CBSNews.com's complete coverage of the health care reform debate

Those who opt out voluntarily might have to pay a penalty. Sen. Max Baucus, D-Mont., who drafted the Senate Finance Committee's plan, set the penalty at $3,800 for a family but cut it to $1,900 amid complaints that the original level was too high.

Republicans have called the insurance mandate a new tax on the middle class. Mr. Obama disputes that, saying that whatever plan emerges from Congress must offer subsidies to lower income people that will make coverage affordable.

In exchange for the requirement that everyone buys coverage, Mr. Obama wants a guarantee from insurers that they no longer will deny coverage based on an individual's health or drop coverage when a person gets sick. The insurance industry has signaled it will accept that trade-off, but need to convince skeptical consumers that it actually means it.

Five Health Care Promises Obama Can't Keep

Doubts about what insurers will cover - coupled with the exploding costs of premiums - are what has driven some to opt out and take their chances.

Krista Neher, who's starting her own social media and marketing venture, is one.

The 30-year-old from Cincinnati recently left Proctor and Gamble, where she was covered by the company's health care plan. After researching the costs of an individual policy, she decided to remain uninsured.

"I want to have health coverage, I think it's important. It bothers me that I could be hit by a car," Neher said. "But I have really low confidence that any insurance company would even cover me in that case, even after I paid all the high premiums. It just seems like a lose-lose situation."

Many people who go without coverage have found that health care providers often will cut the price of a procedure if they know they'll be paid in cash rather than through insurance.

Jason Jepson, a self-employed communications consultant based in Southern California, decided against buying an individual policy he said would have cost twice as much as his $1,250 monthly rent. He pays out of pocket for all medical treatment, saving money even after being treated for a broken ankle and severe strep throat.

"If you pay with cash, they do give you a discount - it's the big secret of not having insurance," Jepson, 35, said.

But Jepson said his lack of insurance has meant lifestyle adjustments, such as driving less and staying off freeways to avoid accidents. He says he supports Mr. Obama's requirement that everyone carry insurance if it can be made affordable.

"I would pay for it. I'm just not sure it will really cover everything," Jepson said.

To ease fears of an unexpected medical crisis, registered nurse Mary Pitman of Vero Beach, Fla., refuses health insurance and takes the extra cash in her paycheck. Pitman, 54, puts $3,000 per year into a pretax flexible spending account for routine care and another $300 per month in an emergency fund in the event of a major illness.

"I have more control over my money this way, and there's a tax advantage," she said.

As skeptical as many are about insurers, some are equally doubtful about government's ability to do a better job managing health care.

Laura Silverthorn of Tampa, Fla., left a nursing job to start her own business designing and selling temporary tattoos. She has gone without health coverage for nearly two years for herself and her toddler son.

While Silverthorn, 36, said she wishes she could afford insurance - "Just one accident and you're done," as she put it - she's also grown disillusioned with government-run programs after working part time reviewing medical charts for Medicaid.

"I don't know if I want the government running health care when I see how they run Medicaid - there is so much fraud," she said.

The only test case for Mr. Obama's plan to bring everyone into the health insurance system is Massachusetts. In 2006, it enacted a program to cover all state residents. Those who opt out must pay a $912 annual tax penalty.

Michael Widmer, president of the nonpartisan Massachusetts Taxpayer Foundation, which has researched the effectiveness of the state's health insurance mandate, said most people had chosen to buy insurance rather than pay the penalty - even those who are "young, healthy and immortal."

"Most are saying, 'If I'm going to have to pay this much in any case, I should be covered,"' he said.

While about 65,000 people in Massachusetts were allowed for financial reasons to opt out of the mandate last year, the state now has the lowest rate of uninsured residents in the country - 4.1 percent, according to the latest census data.

[mypatch]

What is this Russia? We are not going to get health care for NOTHING. We are going to pay for it just like we pay for medicare and everything else the government shoves down our throat. The only good social program instituted was the Social Security act. That's the only one that has worked so far. Medicare is a far cry from even a good program if you need to buy supplemental ins to cover those greedy doctors and hospitals. Now it doesn't matter who wants this health insurance. It's long over do. and if any of you cared one I outta about the poor there wouldn't be a debate over this. But who gives a care about those that can't afford Insurance. as long as you don't have to do without. SELFISH JERKS!

[vernique]

the public option is good enough for congress but they oppose the public option for the general public. What hypocrites.85% of Canadians approve of their public option.

[kitty36605]

im a 45 yo widow with 2 kids and have been denied medicaid because i make to much money.i survive on social security denifits from my desace husband. i live in alabama i have to have car insurance if caught without it its $500 fine each time. i do pay for ins for my kids but i have to choose to do with out my meds for car ins and health care for my kids if i have to pay for a health care plan i'll have to choose to do with out power or groceries or a car all together.why punish the ones that cant afford it. i didnt vote for that losey president im very disipointed in the senate and the house of reps im not proude to be an american americans discraced us with a black press

[gboyd41]

Stuart-I think it is those darn anarchists who oppose you!

[winstrv]

I wonder if those of you on the left heard the news today about the 20 Democratic lawmakers who want to give health care to illegals. Always knew that is what they want to do and if they can't do it this way, they will pass a bill that will give amnesty to them thus making them eligible for health care.

[quapawsix]

Health care is a basic human right not a right for just the privileged. And as long as you let corporate health care run things we will never receive proper health care, even if you can afford to buy heath care see how the out of pocket expense has risen.

[franktor0]

this country has enough money to run a single payer,or govt plan.the problem is that the money is mispent with wars,and many other ways in which billions are gone to waste,not to mention the billions spent on drinking,drugs,gambling by ordinary people.have the rich people taxed, and corporations also.i can go on and on.look at all the money the politicians spend at taxpayer expence.the number one problem, in america is not national security,education,jobs, etc it is HEALTH.

[jjreding-2009]

jsd - that may be partially true about AARP, however, you seem to have forgotten that THEY were up in arms about these proposals until they heard (AND LISTENED TO) all the facts.

[jsd330]

jjreding-2009 The last I read a few weeks ago on this CBS site, was the AARP was taking a wait and see attitude, until they saw the final bill. Now if there is somthing new I haven't seen it. Also the CBO says there will be a reduction in benefits, that also was a CBS article about a week ago.

[stevador39]

WHY NOT GIVE AMERICANS WHO DON'T HAVE HEALTH CARE REFUGEE STATUS. REFUGEES ALL GET FREE HEALTH CARE IN THE U.S.

[be_nice]

Okay, so let me get this straight... We are supposed to support a plan that guarantees the government will get paid whether or not we choose their coverage with no proof that WE will get the coverage we NEED!??! I AM A DEMOCRAT AND EVEN I KNOW THIS SOUNDS RETARDED!!!!!!!!! Damn, haven't you guys ever heard of the term "getting hustled" before!??! Get a clue, people.

[velma179]

by be_nice September 28, 2009 8:05 PM EDT

No, you don't have your facts straight.

Please take some time to read up on the proposed reform. I suggest you go to sources that are not sponsored by right or left wing pundits or ideologues.
Try AARP -- they have a pretty objective approach to explaining the proposals and the intent of reform.

Then -- when YOU have a "clue", come back and we can discuss or debate the issues.

Take care

[enwr77]

The mandate is more of the same, taking from the middle class and poor and then giving to the rich. There is a mandate for the vendor to sell and the customer to buy. Who does that benefit? It would be like mandating Macy's to sell to all customers and mandating that all customers buy from Macy's. This would be a win-win for Macy's. In this case it is not Macy's but the insurance industry. The industry is being mandated to sell to us and we are being mandated to buy what they are selling. There is no mandate that the insurance companies take these mandated premiumn payments and pay the bills of the insured.

[vittoria1]

Well, Ms. Pitman, I hope to hell that you don't develop cancer, because a flexible health-spending account of $3,000 a year won't help you.

Mariatalk, your hysteria isn't helping your position. Calm down, come up with a serious, careful, well-researched alternative, and then we'll all listen to you.

People who are unwilling to do that, who merely screech, seem to have no idea how much they are harming their own cases.

[jjreding-2009]

Oh, Alan, Alan, how naive.

your ignorance is showing. Medicaid will pay for care if you are poor enough. Hospital will care for you and bankruptcy protects home car etc.
------------------------------------
I get less than $12,000 a year in disability - and that, by ANYONE's definition is poor in this economy but I get 'too much' to qualify for Medicaid. And, as I've said in an earlier post, when have you ever gone to an emergency room and gotten treatment for free? It may be at the moment of care, but then you get the bill that is considerably higher than if you had been able to see a regular doctor. And, as for bankruptcy, I ALSO mentioned in an earlier post that there are hundreds of thousands of people in this country (if not more) that have had their homes foreclosed upon because they couldn't afford the payments and bankruptcy did not help them keep a roof over their heads. Many of these people (if not almost a majority) are victims of runaway medical bills. Have you ever had to choose between your medication or medical treatment and food or rent? Didn't think so.

[jjreding-2009]

Um, Alan. Do you consider yourself a devout Christian? Must I remind you of the 'mandate' by the church to tithe 1/3 of your pay to the church? This is not a 'voluntary' donation, although I would be hard pressed to believe that the majority of 'devout' Christians follow this mandate.

[jjreding-2009]

alanrobisch - the world happiness index is supplied by the Erasmus University Rotterdam:

AVERAGE HAPPINESS IN 144 NATIONS 2000-2008
How much people enjoy their life-as-a-whole on scale 0 to 10



Top range: >7.9


Middle range: ± 6.0


Bottom range: <4.3

Iceland 8.5
Denmark 8.4
Colombia 8.1
Switzerland 8.1
Mexico 8.0
Philippines 6.3
China 6.3
Iran 6.0
India 5.9
South Korea 5.9
Chad 4.2
Togo 4.1
Angola 4.0
Zimbabwe 3.3
Tanzania 3.2

For the full list: http://www1.eur.nl/fsw/happiness/hap_nat/nat_fp.php

University of Michigan had this:

The 2007 wave of the surveys also provides a ranking of 97 nations containing 90 percent of the world's population. The results indicate that Denmark is the happiest nation in the world and Zimbabwe the unhappiest. The United States ranks 16th on the list, immediately after New Zealand.

During the past 26 years, the World Values Surveys have asked more than 350,000 people how happy they are, using the same two questions.

"Taking all things together, would you say you are very happy, rather happy, not very happy, not at all happy?" And, "All things considered, how satisfied are you with your life as a whole these days?"

From Business Week:

he World Values Survey, which has compiled data from 350,000 people in 97 countries since 1981, found Denmark to be home to the planet's most contented citizens (again) with Zimbabwe as the most miserable (again). Classic Scandinavian front-runners like Sweden and Finland were nudged out of the top 10 by Puerto Rico and Colombia. El Salvador placed a surprising 11th, beating out Malta and Luxembourg. Further down the list came the U.S., ranked in 16th place.

Directed by University of Michigan political scientist Ronald Inglehart and administered from Stockholm, the survey found that freedom of choice, gender equality, and increased tolerance are responsible for a considerable rise in overall world happiness. The results shatter the more simplistic and traditionally accepted notion that wealth is the determining factor, says Inglehart.

Once again, the right wing canard that the mainstream media is 'cooking the books' has been slashed and proven wrong.

[jjreding-2009]

spillover -

Contrary to right wing beliefs, it is NOT the media who is supplying these figures, they are just reporting it:

How Many Americans Are Uninsured?

* Several studies estimate the number of uninsured Americans. According to the U.S. Census Bureau, nearly 46 million Americans, or 18 percent of the population under the age of 65, were without health insurance in 2007, their latest data available.1
* The Agency for Healthcare Research and Quality, using the Medical Expenditure Panel Survey (MEPS) estimated that the percentage of uninsured Americans under age 65 represented 27 percent of the population. According to the MEPS data, nearly 54 million Americans under the age of 65 were uninsured in the first-half of 2007. 2
* A recent study shows that based on the effects of the recession alone (not job loss), it is projected that nearly seven (7) million Americans will lose their health insurance coverage between 2008 and 2010. 3 Urban Institute researchers estimate that if unemployment reaches 10 percent, another six (6) million Americans will lose their health insurance coverage. Taking these numbers together, it is conceivable that by next year, 57 to 60 million Americans will be uninsured.
* The Urban Institute estimates that under a worse case scenario, 66 million Americans will be uninsured by 2019. 4
* Nearly 90 million people ? about one-third of the population below the age of 65 spent a portion of either 2007 or 2008 without health coverage.5

[Void_Master]

Bankruptcy protects car and home but specifically divests you of intellectual property. As I am an author, that pretty much makes bankruptcy out of the question.

[alanrobisch]

I suspect the plan may go down in flames altogether. This may be only wishful thinking but its my hope. If it passes despite public support it may mean a large turnover in the house and senate leaving the republicans with power to affect legislation

[Void_Master]

And actually, it may all be a moot point. I seriously doubt that a health insurance mandate will pass constitutional muster.

Obama and others have used the excuse that many states already require people to have auto insurance. That does not apply here. Auto insurance is for driving, which is generally considered a privilege -- not a right. To avoid having to get auto insurance, you simply don't drive.

So given how this mandate is supposed to work, how do you avoid getting health insurance; die? Yeah, should it even pass, first time it reaches a federal court, it will likely get overturned. And if not there then certainly once it reaches the SCOTUS.

[Void_Master]

by stuart-johns September 28, 2009 5:11 PM EDT

So you are a criminal or is that a threat?

***

I would call it more of a prognostication. Like I said, the government is going to have a *lot* of people doing the same. One entire group you can count on, just for example, is the homeless.

As far as the label "criminal," there was a time in Germany when befriending Jews would get you that label.