Revisiting the Man in the Middle

Health reform won’t help him

As the Great Health Care Debate wound down, we visited Jeremy Devor, an engineering assistant in Salem, Illinois, a town of about 11,000, 254 miles south of Chicago, smack in the middle of corn country. The unemployment rate there is nearly thirteen percent, and job growth is down by nearly five percent. By Salem standards, Devor has a good job. He works at a small civil engineering firm with thirty-five employees that provides health insurance for its workers and their families. When we first talked to Devor, he worked for a Fortune 500 engineering consulting firm that closed its doors in Salem about a year and a half ago. Devor quickly found new employment, which gives him an annual income of between $47,000 and $50,000, depending on overtime, which has not been plentiful lately. Devor’s income puts in squarely in the middle. The median U.S. income is around $49,000.

That middling income must stretch to cover necessities, including health care, for his wife and five kids, ranging in age from seventeen to nine. All are healthy but have routine illnesses like strep throats, appendicitis, broken bones, sprained ankles—all the stuff kids usually get. When he switched jobs, he moved from one Blue Cross Blue Shield plan to another. The old one came with a $500 deductible for each family member and small copayments like $15 for doctor visits and $30 for specialists, plus he had to pay ten percent of any doctor or hospital bill if he stayed in the Blue Cross provider network. Even with those relatively low cost-sharing requirements, Devor had run up bills for visits to the doctor and the emergency room that he was having trouble paying off. He finally cleaned them up with severance money from his old employer.

Things aren’t much better today. “I went from one Blue Cross plan to
another,” he told me. “This new insurance is costing me more money and covers less than I had before.” The new Blue Cross plan has a smaller deductible, only $250 for each family member, but he has to pay twenty percent of the bill for all medical services his family needs. There are no more small copays, he said. The new Blue Cross plan follows the trend in health insurance with employers shifting more and more of the costs to their workers through higher coinsurance. That cost shift left Devor with a $263 bill for a doctor’s visit for one child and a $713 hospital bill for another.

Trying to save money, he first took his daughter with a sore throat to a rural health clinic that was part of the local hospital. But the nurse practitioner referred her the ER to treat what was strep throat. That meant a bigger bill to swallow. The coinsurance became so crushing that he questioned the benefits of having insurance at all, since he struggled to pay the $690 monthly premium to cover his wife and kids on top of the cost-sharing the policy required. (His employer covers his premium, but he pays $91 a month for vision and dental care.) Hospital bill collectors hound him every day. “The hospital calls me so much,” he said. “The $713 isn’t a lot to many people, but it’s a lot to me.”

When we first wrote about Devor, a commenter on the CJR site asked why he did not enroll his kids in the Illinois state insurance program for children. Devor followed up and after a few tries got them enrolled in All Kids. He dropped his family coverage, leaving only his wife without insurance. That brought up another problem—doctors in Salem don’t want to see children who are insured under the state program, and Devor’s children are unable to get back-to-school appointments with their pediatrician. It seems, Devor said, they don’t get paid enough from All Kids. “We had a doctor for nine years, and he won’t see us,” Devor told me. Three weeks ago his ten-year-old daughter needed an emergency appendectomy and was taken by ambulance to St. Louis Children’s Hospital. All Kids covered the bills, and everything was fine until she needed a follow-up appointment and couldn’t get one in Salem. The one doctor who would treat All Kids patients was too busy. So Devor’s wife drove their daughter two hours to St. Louis to a doctor who would do the check-up, an expensive proposition considering the high gasoline prices and a paycheck stretched thin.

When Campaign Desk chatted with Devor before the health reform law passed, it was unlikely reform would help him much, because he had coverage from an employer. Now it’s clear health reform won’t help at all. “Health reform made an effort to preserve the status quo for employer coverage,” explained Larry Levitt, a senior vice president at the Kaiser Family Foundation. “The upside is that people didn’t have to change their coverage. The downside is that families who can’t afford employer coverage or the coverage is inadequate will not be helped by the new law. They will be people in the lower-to-middle income range who will be affected.”

Devor will be barred from buying insurance in the new state shopping services, called exchanges, and from receiving a government subsidy to pay the cost, because the premium from his employer for him is less than 9.5 percent of his gross income. A recent proposed Treasury Department ruling also means that his wife and children will not be able to buy a policy either. Their eligibility for a subsidy is based on the premium that Devor would pay from his employer. “Even if they gave me a subsidy to buy insurance,” Devor said, “it would have such big deductibles and coinsurance, I couldn’t even use it. That’s what happened before when I had insurance. Theoretically, Devor is better off than most in this predicament because his employer pays the full cost for him.

Nevertheless, Levitt says Devor’s assessment is correct. He works for a firm employing fewer than fifty workers. Policies sold to workers in these small groups can carry deductibles as large as $4000 for a family and as large as $2000 for an individual. Small businesses can offer a policy that—while providing the essential benefits the law calls for—will, on average, cover only sixty percent of someone’s medical expenses. These so-called bronze policies will likely be popular because they are cheaper than those covering more of a worker’s expenses.

Devor hopes his kids can stay on the state program, but that depends on his income. The more he makes, the more likely it is his children will no longer qualify, and he will once again have to pay for family coverage, and cope with the ever-increasing out-of-pocket expenses that overwhelm his budget. He may be one of thousands or perhaps one of millions of Americans who will still be uninsured—those in a no-man’s land forgotten about in the sales job for reform.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , ,