But in fact, almost anyone’s personal coverage could be changed or snatched away at any time. Even in good years like these, more families are falling through the cracks. How can the warm and the comfortable be medically insecure? Consider this:
Your insurer might fail or stop writing policies in your state. We’re seeing more of this turmoil, which has orphaned tens of thousands of policyholders. Since the start of 1999, 29 health insurers have collapsed, 11 have dissolved voluntarily and 30 have merged into another company, according to Weiss Ratings in Palm Beach Gardens, Fla. Unknown numbers have quit doing business in certain states.
Most people find new coverage, after the worry and stress that we’ve somehow accepted as the price of access to care. But what of the others? After every cancellation, some portion of the abandonees have to pay more for insurance, can’t get any coverage for pre-existing medical conditions or fall into the slough of the uninsured. Maybe it’s just a few thousand people, or a few hundred, from every failed plan. Hardly worth mentioning (unless it’s you).
If you’re insured through your job, as is 65 percent of the non-Medicare population, your employer will almost always find you replacement coverage. You might have to change doctors. Sometimes the benefits aren’t as good. Often, your share of the cost will rise. In North Carolina, eight HMOs dropped out of the state-employee plan this year. Workers may have to pay 30 or 40 percent more to cover their spouses and children. But at least employees are offered new insurance, even if they have an expensive illness.
You won’t be so lucky if you’re among the 4 percent (around 9.5 million people) who have individual coverage–that is, a policy you buy yourself. The healthiest among you will be OK. But affordable policies may not exist for those with a current or prior illness, including the illness of a spouse or kid.
Sometimes states help you find replacement policies. When HIP Health Plans of New Jersey failed last December, the state insurance department told other insurers to accept any stranded HIP policyholders who applied. But it never tracked the actual results. In February Florida ordered all insurers in the state to take refugees from the defunct SunStar Health Plan. The sign-up period was extended when it turned out that some of the insurers were fending off calls.
States generally have high-risk pools or similar arrangements if you have a health problem and can’t find private coverage. But, oh, do you pay. So far, the risk pool in Texas has enrolled 284 of the people marooned by the death of the Harris Methodist Health Plan. Premiums start at 50 percent above the normal market price.
You might lose coverage if you leave a group-health plan. Insurers, by law, are required to offer you individual coverage after your benefits run out. But the law won’t do you any good if you or one of your kids has had a noticeable illness. The insurer can avoid taking you by quoting a prohibitive price.
Your Medicare HMO might walk away. These HMOs are squabbling with Congress over how much they should be paid. In the past they’ve received enough to offer you extra benefits, including prescription drugs. That helped them attract 16 percent of the Medicare population.
But the 1997 Balanced Budget Act reduced the generous reimbursement to Medicare HMOs. Now, insurers are dropping plans that don’t yield the profits they want. About 934,000 people–most of them elderly, some disabled–will be abandoned by their HMOs this year. That’s on top of 327,000 people cut in 1999 and 407,000 in 1998. (If you’re in a Medicare HMO, you can check its status at insure.com.)
Seniors who can’t find, or don’t want, another HMO will automatically be re-enrolled in traditional Medicare. So you don’t risk being kicked out of the system, as some younger people are. You’ll also have a limited time to buy a private Medigap plan to help cover extra charges, regardless of your health. But you generally won’t have access to a plan that includes prescription drugs. Outside an HMO, seniors get more medical choice–but they also pay more out of pocket for their care, says Michelle Kitchman, a senior policy analyst for the Kaiser Family Foundation in Washington, D.C.
Most likely, the rising complaints from seniors–backed by industry lobbying–will lead Congress to raise reimbursements for at least some Medicare HMOs. So fewer may drop out next year. Nevertheless, the plans will keep trimming the extra benefits they provide. You’ll hear about your Medicare choices for 2001 soon after Sept. 15 (by mail, at medicare.gov or from 800-medicare).
The move from welfare to work is taking a toll. A 15-state study by Families USA, a consumer group, found that 945,000 low-income parents had lost Medicaid coverage. Typically, their new jobs offered no health-care benefits, or offered a plan they couldn’t afford. Some of the parents still qualified for Medicaid but hadn’t been told. In most states, their children were eligible for low-income insurance plans, but the parents didn’t always know that, either.
Health-policy expert Uwe Reinhardt of Princeton University thinks that America will never solve the problem of its uninsured. Darkly, not cynically, he calls them “expendable people–mostly low-income, hard-working stiffs, socially and politically marginal.” There aren’t enough middle-class people there to swing the vote.
It would take public subsidies of some sort to bring the uninsured into the system. But we the majority go quiet if someone suggests we pay. Individually, our coverage may be insecure–as a few of us have unhappy occasion to learn. Collectively, we possess enough good health insurance to stay wedded to the status quo.
