This is the eighth 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.
Glenn Hall represents everything that’s wrong with American health insurance. If you’re sick, you may not be covered for the very illnesses you have. Yes, that’s counterintuitive—after all, you only need insurance during the times when you’re sick. But it makes perfect sense to insurers that profit by denying claims for medical care. So Hall and others like him have become a litmus test for reform.
Hall farms 2,200 acres of cotton, soybeans, corn, and wheat in the Mississippi Delta and can afford two policies—one for him and one for his wife. A large man with lots of health problems, he holds a Blue Cross Blue Shield major medical policy, so his coverage, at least on paper, is good. He now pays $8400 a year for the policy, with a $2500 deductible. (It used to cost $5400, but the premium jumped when he turned fifty-five last month). He pays $2400 for his wife’s policy, which comes with a $5200 deductible. Hall moved her into a high deductible plan in order to lower the premium. Still, spending almost $11,000 a year for health insurance—plus another $8000 or so in out-of-pocket costs before the policies pay a dime—takes a big chunk out of the budget.
Hall’s policy excludes diseases of the kidney and urinary tract, and Blue Cross won’t cover him for any diseases related to those parts of the body. When he bought his policy six years ago, he had had a kidney stone, so the insurer slapped a two-year exclusion on his policy for urinary and kidney problems. That means he’s on his own if he needs treatment. After the two years were up, the company asked him to have a complete physical, which he declined. “My records were available to them,” he says. But that wasn’t good enough for Blue Cross. The exclusion stayed, and he still pays for treatment.
“I’m paying for full coverage but I’m not getting full coverage,” he says. In the last few years, he has paid several thousand dollars out-of-pocket for procedures to relieve constrictions in his urinary tract. “There’s nothing I can do. I have to have relief,” Hall says. Insurance companies get their relief by placing such exclusions on policies, or charging higher premiums to compensate for the extra financial risk that people with health conditions represent. In the American insurance system, the sicker you are, the more money you may pay, if the carrier decides to issue coverage at all.
Hall has other problems; he is overweight, has diabetes, high blood pressure, high cholesterol, and bad vision. And farmers are prone to accidents, like the snake bite he got after stepping on a Copperhead, resulting in an $86,000 hospital bill for a four-day stay. That was the retail price, but since Hall had insurance, Blue Cross paid its negotiated $6500 rate with the hospital; Hall said he paid his deductible and went home.
Like most Americans, he doesn’t understand why the price of care is so high. Because he has many serious health problems, he is uninsurable and is stuck with Blue Cross. The minute he leaves to find another carrier, he has no coverage for any ailment. Meaningful reform, experts say, must address these peculiarities of American health insurance.
How Hall would do under John McCain’s proposals
McCain’s tax credit may help Hall defray a small part of his policy premium. But the $2500 is a fixed amount, and as the premium increases, the credit will be worth less and less and cover a smaller and smaller portion of the policy. So unless the price of coverage comes down (unlikely under either McCain’s or Obama’s proposals), Hall will find larger portions of his income going toward health insurance.
McCain says he wants families to make more decisions about their health insurance, availing themselves of the new competition he believes market forces will bring. But Hall is already making his own decisions. There’s nothing in that rhetoric for him. Because of his health problems, he has no choice, and that likely won’t change under McCain’s health reform solutions. Carriers would not be required to insure people with preexisting health conditions, and McCain’s fix for dealing with the so-called uninsurables probably won’t be relevant for Hall.
If McCain is elected, and if some sort of high risk pool for sick people emerges, Hall probably wouldn’t even be eligible, since he already has insurance. In sum, McCain’s proposal won’t do much for Hall. McCain’s approach to reform would let insurers like Arkansas Blue Cross Blue Shield conduct business as usual. Carriers could continue to use exclusions on policies, effectively de-insuring people, or charge them higher prices, effectively putting the policies out of reach for many. That would be especially true in the “individual” market, where self-employed people like Glenn Hall must turn to buy their coverage.
How Hall would do under Barack Obama’s proposals
It’s hard to say exactly what Obama’s plan would do for Hall, either. In his early speeches, Obama talked of regulating insurance companies, and one of those regs would affect whether insurers could exclude sick people from coverage. Companies would have to cover people like Hall with multiple pre-existing conditions. But would they actually cover those people, or would there be strings attached? Will insurance carriers, whose bottom lines depend on shielding themselves from expensive claims, really cede their ability to pick and choose the people they want to insure? That is the sine qua non of American insurance.
When health reform was debated last year in California, some insurers said they were willing to take everyone, even those in bad health. But they insisted on conditions, such as limiting someone’s ability to switch to more comprehensive plans. They also said that all citizens—sick and well—would have to be in the so-called risk pool; that is, everyone would have to be covered in order for companies to gamble on those in poor health. Covering everybody with a mandate means that the losses from sick people would be offset by the new profits from those who are well. Such a mandate doesn’t square with Obama’s statements that only children would be required to have health insurance.
Since he already has coverage, it’s also unclear whether Hall would be eligible for Obama’s proposed public plan option, which would ostensibly be cheaper and more inclusive than the private alternatives. He certainly wouldn’t be eligible for subsidies. The extent to which he would be helped by Obama’s still-vague proposal will be determined by how the preexisting conditions issue plays out. For the time being, people like Hall should hang on to any coverage they’ve got, and not count on much help from Obama.