This is the sixth in a series examining how the candidates’ health care proposals will affect ordinary people who live in the river town of Helena-West Helena, Arkansas, and how the press could cover that angle. The entire series is archived here.
Pam Culp and her husband Allen farm 5000 acres of corn, wheat, rice, and soybeans in the rich alluvial plain that hugs the Mississippi River. Their thirty-something sons have returned home to farm the land that has been in the family for four generations. As land owners, the Culps are near the top of the area’s socioeconomic strata; over the years they’ve acquired more land to boost their financial returns. Some years they’ve grown cotton, but the higher prices being paid for grain this year steered them away from the area’s traditional cash crop. Like farmers everywhere, they cross their fingers that hurricanes and hail don’t destroy their crops before harvest.
In some ways, Pam, 58, and Allen, 59, fit into the “consumer-directed” model for health insurance toward which the country seems to be moving: if you want insurance, take a high deductible policy and pay out-of-pocket for care until the deductible kicks in. If you postpone care until the insurance pays, well, that’s the trade-off for getting a policy with a cheaper price tag. Theory has it that if you have to pay on your own, you will think twice before seeking medical care. “If you’re paying for care, you’re not going to run to the doctor for a snotty nose, but it’s one of those two-edged swords,” Culp says. Research has begun to show that people who buy such policies often postpone medical care, and don’t fill prescriptions even when they need them.
The Culps’ policy from Assurant Health, which calls itself a leader in the individual health insurance market, is not so cheap. They pay about $6900 a year for coverage that they can’t use—not just yet, anyway. Their policy requires them to pay a $5200 yearly deductible—and another $2000 deductible for using out-of-network doctors—before the insurance kicks in. So they’ve been careful to use in-network doctors.
For the three years they’ve owned the policy, the Culps have paid out-of-pocket for medical care, amounts ranging from $1000 and $3000 each year for medicines, check-ups, and other kinds of routine care. “We said ‘yes’ we can pay for the minor things,” Culp explained. “We are blessed we don’t have to use it.” For them, the insurance equates to coverage for catastrophic illness.
The Culps are lucky that they have generally been healthy. But Allen has been postponing ear surgery—at least until the harvest is over. He has had bad ears since childhood, and about twenty years ago underwent a procedure to patch a hole in his eardrum. Doctors hoped that scar tissue would seal the hole and improve his hearing. And, for awhile, it did; but the hole has returned, and he needs another procedure to close it again. That will cost $2600, plus another $100 for a hearing test. Doctors have refused to do the procedure unless he has the hearing test.
For awhile, the Culps were resisting the test, believing that the doctor was just covering himself for liability in case the operation failed. They are wary of unnecessary tests. “We chose not to have the hearing test at this time,” Culp told me when I first met her. “We always knew his hearing had decreased. When you’re paying for it yourself, you can choose not to do it.” But now, she says, once the harvest is over, he will have the procedure done by an ear specialist in Little Rock.
How the Culps would do under John McCain’s plan
The Culps are high enough up on the income ladder that they might actually benefit from McCain’s plan, which seems geared more toward helping those already with insurance than those without. His tax credit aims to help the financially secure pay their ever-rising insurance premiums. The Culps could take the $5000 tax credit and try to buy a better policy. The credit, plus the $7000 or so they now pay in premiums, can probably buy a policy with a smaller deductible and, consequently, quicker access to insurance protection. That might be important in the years to come; health problems inevitably surface with age.
Of course, they would still have to jump through a new insurer’s underwriting hoops; that is, their health would be carefully examined before the company would issue coverage. And Allen’s ear problems might disqualify him from coverage altogether, or the carrier might refuse to cover any treatment for diseases of the ear. McCain would not require insurers to accept those with pre-existing medical conditions.
McCain also proposes letting carriers sell across state lines, in the hope that more competition would lower premiums. Experts doubt that will happen, since states tend to be dominated by single carriers; in Arkansas, that carrier is Blue Cross Blue Shield. Culp is a savvy shopper and already has begun searching the Internet for other options. They chose their current policy because it would pay $8 million in lifetime benefits, instead of the $1 million paid by their previous insurer. To the extent that any of McCain’s proposals will foster more price transparency and consumer information, the Culps might benefit.
How the Culps would do under Barack Obama’s plan
The aspect of Obama’s proposals most relevant to families like the Culps is his promise to cut the average family’s premiums by $2,500. However, as The New York Times pointed out in July, such a promise may be nothing more than pie-in-the-sky campaign propaganda. The Times reported that Obama is “offering a precise ‘chicken in every pot’ guarantee, based on numbers that are largely unknowable.” Obama’s plan might help the Culps change insurance carriers for a better plan—if, as president, he can persuade insurance companies to insure people who have health conditions. He has promised to regulate insurance more strictly, but it’s unclear if he can do that once the legislative process gets going and the lobbyists move in.
It’s also unclear whether the Culps will be able to join Obama’s so-called public plan option and obtain better, more comprehensive coverage. They already have insurance, and might not be eligible for the public plan, depending on how the legislation gets written. Lobbyists for the insurance industry will probably voice the “crowd out” argument; that is, they will argue that people should buy insurance from private carriers instead of taking a government plan that is likely to be cheaper, but will siphon business from Aetna, Blue Cross, and company. The bottom line: Because there are so many “ifs” that Obama and his surrogates have not yet answered, the Culps might not benefit much from his proposals.