When Health Care Becomes A Hazard

When CBS News caught up with Lisa Kelly, she was nearing the end of an almost 100-day treatment which included taking 21 pills a day, an intravenous drip in the afternoon, and multiple trips to the hospital every week. It was a life I couldn't imagine, and one that all sorts of cancer survivors could probably relate to. The reason we profiled her is because she is at the confluence of some significant shifts in American healthcare.

First, she is part of a population of 25 million who are underinsured. According to the Commonwealth Fund, that number is up a staggering 60 percent since 2003. These are people who have "health coverage" but still pay more than 10 percent for their income for medical expenses. It isn't just the poor we're talking about; the middle class is hit especially hard. For adults with incomes above 200 percent of the federal poverty level (about $40,000 per year for a family), the underinsured rates nearly tripled since 2003.

Watch the full CBS Evening News story here:

When Lisa was healthy and purchased the most affordable plan to her at the time, like most of us, she didn't think she was going to be diagnosed with cancer. She knew she had purchased a limited benefit liability plan and has always admitted that she had no false hopes that this would be "Cadillac coverage". However when she was told by M.D. Anderson Cancer Center in Houston that her coverage was unacceptable even to get her an appointment, she was shocked.

Read M.D. Anderson's response.
Lisa Kelly had purchased a plan marketed by the AARP, an organization which has a tremendous amount of credibility with Senior Citizens, and a brand those consumers have come to trust. The plan was far below any expectation she had. When she had to cash in part of her husband's inheritance to get an appointment at M.D. Anderson, and was asked for even more money to be admitted, it got the attention of Sen. Chuck Grassley, R-Iowa. As soon as there was an investigation and a hearing on Capitol Hill, the AARP stopped marketing the plan.

Read Grassley's letter to AARP.
The AARP's response?
Ensuring the protection and keeping the trust of our members and people 50 and over drives all that we do at AARP. In addition to continuing to produce documents and answer questions in response to Grassley's letter, we also launched a comprehensive independent review of the issues he raised, and AARP and UnitedHealthcare agreed that the marketing and sales of these fixed-benefit indemnity products would be voluntarily suspended as soon as possible, pending conclusion of our review.
Also, a UnitedHealthcare spokesperson said:
A month ago, AARP agreed to a review of its AARP-branded fixed-cash benefit indemnity products, in response to a letter from Grassley. While the review is taking place AARP and UnitedHealthcare have voluntarily decided to suspend marketing and sale of these non-Medicare plans as soon as possible. We are proud of the products we bring to members on behalf of AARP, and are committed to serving the nine million seniors nationwide who place their trust in us each year.
Lisa did what an increasing number of Americans do with health care which is to shop by price. Insurance companies say health care policies come in a variety of flavors because it is all about consumer choice, but often times people are unaware of the distinctions inside the plans. Grassley's aides found during their investigation that salespeople on the phone were selling products or services that clearly went beyond what was actually in the policies. He has sent a letter to 29 state insurance commissioners to look into how these plans are being marketed state by state and has not heard back from most of them.

Read Grassley's letter to state insurance commissioners.
If there is significant health care reform, perhaps a mandate for individuals to purchase a policy, there are likely to be several more people who fall through the cracks, who think they are paying for a fail-safe and are failed by it when the time comes. It is easy to say – read the fine print – but even a well educated individual can get lost in the labyrinthine distinctions that insurance companies write into their policies. There are policies that you can buy if you just want coverage for preventive care, and separate ones just for hospitalizations, but neither may cover catastrophic situations like being diagnosed with a terminal illness. The price you pay per month will likely fluctuate based on your pre-existing conditions, and the type of deductibles you are willing to pay out of pocket.

There was an individual we interviewed for the piece that we did not get to include in the Evening News version of the story in the interests of time. Holly Wallack is a medical billing advocate. She seems to be part forensic analyst, part accountant, part advocate who sleuths through reams of medical bills and paperwork on behalf of her clients. She has been working with Lisa and already reduced her bills a significant amount. Wallack says there is usually a huge disconnect between what people think they are buying and what they get, partly because they have no idea how expensive healthcare is today. She also say people also assume the bills are always correct. Watch some of the interview with her here:

Her analogy was: "imagine going into a grocery store, buying 100 different items and at the end getting a receipt that says food, paper goods, other". Buried in the billing codes is where she says she finds most of her errors.

The fact that more hospitals are requiring proof of payment upfront is the other reality Lisa and the rest of the underinsured are facing. When you hear the hospitals tell it, they are stuck between a rock and a hard place. The number of uninsured that walk through their doors, and the amount of care they are providing without seeing any money in return, combined with the proliferation of these "skinny plans" like Lisa's is forcing them to check the ability to pay at the door for non-emergent care (care that can be scheduled). They also see an increasing number of employers shifting more of the health care costs onto employees. Worst of all, as times get tough, they say ERs become the first point of entry into the health care system for millions of people who decide to skip visits to their doctors due to the high cost of co-pays or deductibles that they need for other basics in their lives. This new shift is not going away.

Lisa has paid $100,000 already and is on the hook for $137,000 more. To be clear, she is incredibly satisfied with how she has been treated by the doctors and the medical care she has received, it is just the reality of the costs and billing side of her care that have been a shock and a source of dismay to her. She has been able to get catastrophic insurance now at a very high premium but says she has learned her lesson, and if people see or hear her story, perhaps they'll re-read their policies and make the necessary adjustments so they don't end up like her.

In many ways she knows she is lucky. She is lucky to be alive, she is lucky that there was a source of money to cash in, but she wonders about the plight of people who are also in this giant gap of the underinsured – what they'll do – whether they'll bankrupt the rest of their future and the financial future of their children to have a few more years or whether they'll just give up.