Some Winners, Some Losers: The Health Insurance Gamble

The problem remains that tens of millions of us, particularly those of us in the individual market, have poor choices with very high costs—insurance plan options that do not ensure us access to needed care and protection from financial risk should we end up needing costly health care services. Beyond that, information isn't available to help us understand the health and financial risks we take by choosing one insurer over another. Insurers are able to keep confidential both the treatments they cover and the amounts they pay for care and they generally do. The marketplace is rigged against us. The insurance industry rules.

The people profiled illustrate how our private insurance system is failing too many of us. Insurance should provide security, not be a gamble.

• Jacqueline Eyler and her husband thought they had good insurance, but had to use up their savings and dip into their retirement account when both faced serious health problems.

The Eylers had chosen a health plan through their employer that limits their annual out-of-pocket costs to $5,000 per person on in-network covered services. In 2007, Jacqueline suffered a small stroke and heart failure, caused by the drug used to treat the cancer she had in 2005. To top off a bad year, her husband had to be treated for bladder cancer as well. Between the cost of out-of-network providers, co-pays on their medicines, rehabilitation services and equipment not covered by their plan, the Eylers ended up spending $22,000 out-of-pocket in just one year on top of their insurance premiums, much more than the $5,000 they thought they would be limited to by their plan.

Mr. And Mrs. Eyler are not alone. A Harvard study found that 75 percent of people who had filed for bankruptcy because of medical debt had health insurance at the time they got sick or injured.


• Chas Sforza fared well last year because he had no major health problems. However, his health history will make it nearly impossible for him to change his health insurance if it becomes too expensive or cuts benefits.

Sforza had a heart attack in 2006. A small-business owner, he had bought an individual insurance policy before he got sick. Sforza said he had no complaints with the coverage, but was worried that his heart attack meant he was stuck with his existing policy for the foreseeable future. Luckily for Sforza, he had no health problems in 2007 and is content with his insurance.

Mr. Sforza's concern is not unwarranted. Individual insurance companies often refuse to sell new coverage to anyone who has had cancer, heart attacks, asthma or diabetes. And even if they do, the cost is usually unaffordable.


• Chris Basler found out cheap policies can end up costing you a lot of money.

After graduating from college and losing his parents health insurance, Chris Basler decided to buy a bare-bones health plan until he got employer-sponsored insurance. Then he hurt his ankle and found out his new $1,000-deductible, short-term health policy only covered hospital-related care. Basler had to pay at least $400 out-of-pocket for treatment and now realizes the cheapest insurance can turn out to be very expensive.

Mr. Basler's predicament is not uncommon. A Commonwealth Fund report found that 25 million people were underinsured in 2007.

10-03-08 By Monica Sanchez | Comment (0)