Meet Jeremy Devor, a technician with an associate degree in engineering, who lives in Salem, Illinois, a town of about 8,000 people 254 miles south of Chicago. It’s a land of corn fields, few jobs, and an unemployment rate of twelve percent. In a good year, Devor’s job at a ten-person engineering firm gives him an income of about $46,000. This year, though, he figures he will pull in about $44,000, what with the recession taking its toll on overtime pay. That’s 32 percent above the poverty line for his family of seven.
Devor is the kind of person reformers must have had in mind as they’ve pushed toward changing the health system—a middle class, middle American. But if the bills were to take effect now, Devor wouldn’t get much help. “I already had doubts the legislation would do anything,” he said. “The legislation, it seems, is not going to help me. It’s more of the same.”
Devor and his family, including his five kids, have health insurance from his employer, a branch of a Fortune 500 engineering consulting company which provides coverage—good coverage—for its employees. It was the kind of coverage the president told the electorate they could keep if they were happy with it. In his speech to the nation in September, Obama reassured millions of Americans with employer-provided coverage that reform would “make the insurance you have work better for you,” and drove home the point they would not have to change coverage or doctors.
But changing coverage or doctors isn’t Devor’s problem. By today’s standards, his insurance is generous and more or less comprehensive—unless his carrier, Blue Cross Blue Shield, decides to reject one of the family’s claims. “They reject everything the first time around,” he says. The deductible is $500 for each family member and $1,000 for the family—low compared to the enormous deductibles of $3000, $5000, and even $10,000 families face today as employers shift costs to their workers. Copays are light, too—$15 for doctor visits; $30 for specialists; $75 for the ER, and only ten percent of any doctor or hospital bill if he stays in network. The out-of-pocket maximum is $2,000, and he always tops out on it.
For this coverage, his share of the premium is $5,443 a year—more than 12 percent of his income—or $209 every two weeks, deducted before he gets his take-home pay of about $1300. Last week, his monthly premium increased $60; without overtime or any raises this year, that’s effectively a cut in his income. Devor sometimes works a second job shoveling manure, and his wife doubles as a bartender, earning four dollars an hour, plus tips. He could lower the premium by upping the deductible to $1000 per person, but says he can’t swing the out-of-pocket expenses a higher deductible would require. In fact, he adds, “I don’t make enough money now to cover the deductibles, and we don’t always have the money for the copayments.”
Nobody in his family has had any serious illnesses, but they have plenty of everyday medical expenses that are the result of common accidents and ailments that need medical attention. “The regular stuff kids get,” he says. “One or two go to the emergency room every year.” His daughter fell and needed stitches in her lip; his son had a high fever and couldn’t stop vomiting; another daughter stepped on some broken glass that wedged between her toes. When Devor couldn’t pull it out with a pliers, he realized she needed immediate care to stop the bleeding.
You go because the doctor isn’t available for two or three days, or it’s the weekend, he says. Once his face swelled up on a Saturday morning—an allergic reaction—and he couldn’t breathe. If the ER visit is $3000, as it was when the hospital did lab tests and imaging procedures on his son who was vomiting, the ten percent coinsurance—$300—quickly becomes unaffordable. A couple of visits like that one, and bingo: Devor has $600 of debt that he can’t pay off.
Six years ago, hospital and doctor bills reached $12,000, and Devor declared medical bankruptcy. Sixty-two percent of bankruptcies in 2007 were related to medical problems. Most of the debtors had middle-class occupations, and three-quarters had health insurance. For Devor, medical debt has mounted again, and he has zero savings to pay it down.