September 2007
Insured but not covered
"The cost of health insurance has prevented me from giving my employees hourly raises."
Photo by Bruce ZakeRaymond Arth
Avon Lake, Ohio
Avon Lake, Ohio
Our survey found evidence of the increasing frailty of our system of health insurance almost everywhere we looked.
Dan Dixon, 41, a telecommunications manager from Phoenix, is still paying off bills that aren't covered under his $2,500-deductible policy, despite the fact that he and his wife Tarina, a schoolteacher, earn what by most standards would be considered a good family income and no one has any serious medical problems.
"We haven't put off anything for the kids. But my back has been bad for a while and I've learned to live with the pain," Dixon says. He says he was supposed to be getting physical therapy, but "I won't register for it until we've finished paying off our outstanding costs."
A growing number of Americans are feeling the Dixons' pain as they watch premiums go up and benefits go down. Between 2001 and 2005, the percentage of middle-income families--those who earn between $40,000 and $80,000 for a family of four--who had job-based health coverage dropped 4 percentage points. Half lost benefits because their employers dropped health insurance altogether or quit offering dependent coverage. But 15 percent gave up their employer-based insurance because they could no longer afford the premiums.
That's the situation facing David Niemi, an apprentice electrician from Ironwood, Mich. His small, family-owned employer doesn't offer insurance, and he can't swing the $500 per month it would cost to add himself and his son to his wife's plan through her job at a local hospital. "I would have to get a second job in order to afford it," he says.
But even those who have managed to hang on to insurance have found it more difficult to pay their medical bills.
In our survey, the median household income of respondents who were underinsured was $58,950, well above the U.S. median; 22 percent lived in households making more than $100,000 per year.
An explanation isn't difficult to find: Health plans are offloading more and more expenses onto consumers. Co-pays and deductibles have risen steadily in the past several years, In 2000, for instance, only 14 percent of workers with single PPO coverage had a deductible of more than $500; by 2006, 38 percent did. In 2006, one in five employees in HMOs and PPOs had plans that set no upper limit to the amount of co-pays and deductibles they might have to pay in a year, according to the Kaiser Family Foundation's annual insurance survey.
This combination of deductibles and co-pays can quickly add up to serious bills in the case of a major illness. A 2006 study found that 10 percent of insured patients with cancer had out-of-pocket expenses of more than $18,500.
Gary Hindman, 59, of Meeker, Colo., who retired on disability with bad knees after a 26-year teaching career, went from a plan with a $3,000 annual out-of-pocket maximum to one with a $10,000 cap when his public employees' retirement association switched carriers. "They said it was a good deal because our premiums wouldn't change," he says. "Well, I think $3,000 is reasonable, but not $10,000. As you get into your 60s you can develop prostate or heart problems and run through that amount pretty easily."
Dan Dixon, 41, a telecommunications manager from Phoenix, is still paying off bills that aren't covered under his $2,500-deductible policy, despite the fact that he and his wife Tarina, a schoolteacher, earn what by most standards would be considered a good family income and no one has any serious medical problems.
"We haven't put off anything for the kids. But my back has been bad for a while and I've learned to live with the pain," Dixon says. He says he was supposed to be getting physical therapy, but "I won't register for it until we've finished paying off our outstanding costs."
A growing number of Americans are feeling the Dixons' pain as they watch premiums go up and benefits go down. Between 2001 and 2005, the percentage of middle-income families--those who earn between $40,000 and $80,000 for a family of four--who had job-based health coverage dropped 4 percentage points. Half lost benefits because their employers dropped health insurance altogether or quit offering dependent coverage. But 15 percent gave up their employer-based insurance because they could no longer afford the premiums.
That's the situation facing David Niemi, an apprentice electrician from Ironwood, Mich. His small, family-owned employer doesn't offer insurance, and he can't swing the $500 per month it would cost to add himself and his son to his wife's plan through her job at a local hospital. "I would have to get a second job in order to afford it," he says.
But even those who have managed to hang on to insurance have found it more difficult to pay their medical bills.
In our survey, the median household income of respondents who were underinsured was $58,950, well above the U.S. median; 22 percent lived in households making more than $100,000 per year.
An explanation isn't difficult to find: Health plans are offloading more and more expenses onto consumers. Co-pays and deductibles have risen steadily in the past several years, In 2000, for instance, only 14 percent of workers with single PPO coverage had a deductible of more than $500; by 2006, 38 percent did. In 2006, one in five employees in HMOs and PPOs had plans that set no upper limit to the amount of co-pays and deductibles they might have to pay in a year, according to the Kaiser Family Foundation's annual insurance survey.
This combination of deductibles and co-pays can quickly add up to serious bills in the case of a major illness. A 2006 study found that 10 percent of insured patients with cancer had out-of-pocket expenses of more than $18,500.
Gary Hindman, 59, of Meeker, Colo., who retired on disability with bad knees after a 26-year teaching career, went from a plan with a $3,000 annual out-of-pocket maximum to one with a $10,000 cap when his public employees' retirement association switched carriers. "They said it was a good deal because our premiums wouldn't change," he says. "Well, I think $3,000 is reasonable, but not $10,000. As you get into your 60s you can develop prostate or heart problems and run through that amount pretty easily."
