Underinsured face higher bills, bankruptcy

In Time, Karen Tumulty used the story of her brother’s kidney problems and resulting medical bills to look into the plight of the nation’s underinsured, who she said may be even more vulnerable than the uninsured because, “until a health catastrophe hits, they’re often blind to the danger they’re in.”

In a 2005 Harvard University study of more than 1,700 bankruptcies across the country, researchers found that medical problems were behind half of them — and three-quarters of those bankrupt people actually had health insurance.

Tumulty’s brother, Patrick Tumulty, renewed a short-term private policy for about six years. When his kidneys failed, his insurance company refused coverage because his problems were, in terms of his latest six-month short-term plan, a pre-existing condition. Even with the help of a country program for the uninsured, Patrick struggled to pay the resulting bills.

A paradox of medical costs is that people who can least afford them — the uninsured — end up being charged the most. Insurance companies, with large numbers of customers, have the financial muscle to negotiate low rates from health-care providers; individuals do not. Whereas insured patients would have been charged about $900 by the hospital that performed Pat’s biopsy (and pay only a small fraction of that out of their own pocket), Pat’s bill was $7,756. For lab work — and there was a lot of it — he was being charged as much as six times the price an insurance company would pay.


Talking Health: Covering the Underinsured – This webcast explores the growing problem of the underinsured.

The program, moderated by AHCJ board president Trudy Lieberman, features

Sara R. Collins, Ph.D., an assistant vice president at the Commonwealth Fund; Helen Darling, president of the National Business Group on Health, and Mila Kofman, Maine’s superintendent of insurance. Two journalists, AHCJ board member Julie Appleby of USA Today and Reed Abelson from The New York Times, offer suggestions and ideas for journalists based on the information discussed by the panelists.

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