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.
Right now, he says, he owes the local hospital $500 or $600 and the collection agents are getting nasty, as they normally do. He owes the family doctor $150 and the dentist $200. “What do you do when your daughter loses a filling and her tooth hurts?” he asks. He has dental coverage, but when his wife fell and broke a front tooth, the dentists who could restore her tooth were not nearby in the plan’s network. An out-of-network dentist who fixed the tooth was an hour and a half away. He paid the several thousand dollars in out-of-network expenses with last year’s tax refund. In a couple of days, the money was gone, he says.
For awhile he was hopeful that health reform might help him out. That’s unlikely. Because he has insurance, he’s not eligible for Medicaid or a public plan if one were part of the final health care bill. And he’s not eligible for subsidies unless his employer makes him pay a very large portion of the premium. That’s not the case now, although it could be later on.
Currently the Senate bill says that anyone spending more than eight percent of total income on insurance won’t be penalized if they fail to get coverage. So Devor could drop his policy and pay for all his medical bills out-of-pocket—not exactly something he’s eager to do. It’s an unappealing alternative for someone struggling to pay the deductibles and coinsurance for the coverage he has now. Nor would he fit the income guidelines of Oregon Sen. Ron Wyden’s proposal that would allow some people with job- related coverage to take the money the employer contributes toward the total premium and shop in the government’s brokerage service, the Exchange.
So where does that leave him—one of several million Americans who will be over the line and perhaps facing another medical bankruptcy down the road, the kind of thing Obama said reform would prevent. “The single biggest issue in my household is health care,” Devor told me. “I wouldn’t mind paying the same amount in taxes that I am paying for health care today. I already don’t have that money for our family. And still I have the stress and anxiety of dealing with doctors.”