The Under-Insured: 'Health-Care Crisis Hits Home'

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross. Today, we're talking about health insurance, how broken the current system seems to be and President Obama's attempts to reform it.

The hard truth about our country's health care system is just about anyone could be one bad diagnosis away from financial ruin. Even if you have a job that comes with insurance, coverage that may seem generous when you're healthy can prove insufficient if you find yourself really sick.

These observations come from our first guest, journalist Karen Tumulty. She writes about the health care crisis hit home in the cover story of Time magazine's current edition.

As a national political correspondent for Time, she's covered health care policy, but she was still unprepared when her brother, Pat - who lives in Texas - was diagnosed with kidney failure and learned that his health insurance wasn't going to cover him for it.

It was particularly hard for Pat to adjust to the diagnosis because he has Asperger's syndrome, a disorder which is often described as high-functioning autism.

Karen Tumulty, welcome to FRESH AIR. What was your brother's problem when he got caught in the whole health care system mess?

Ms. KAREN TUMULTY (National Political Correspondent, Time Magazine): Well, my brother's problem was something that showed up during a physical that he took in December of 2007. It was showing high concentrations of blood and protein in his urine. That turned out to be very serious kidney disease, which was confirmed and pinpointed the following August in a biopsy.

GROSS: Now, he had lost his employer-based health insurance when he lost a previous job. What kind of health insurance was he carrying when he got the diagnosis?

Ms. TUMULTY: Well, it had been six years since Pat had had a job that had genuine, you know, employer-provided health benefits. So Pat went out and did what seemed like the responsible thing at the time. He went out and bought himself, on the individual market, the best insurance policy that he could afford.

And it was a policy that was supposed to be a guarantee against catastrophe. It carried a $2,500 deductible, a 50 percent co-pay. So this was not something that he could use for day-in and day-out health care, but it was there to guard him against a disastrous health event.

GROSS: Well, he had a disastrous health event. He was diagnosed with kidney disease, and then he was denied coverage. On what grounds?

Ms. TUMULTY: Well, it turned out that the policy that Pat had bought was - it was a series of policies, all from the same company. He never missed a premium, but he had bought a series of six-month health-insurance policies.

And what he didn't understand was that each time he renewed that policy every six months, it was treated as though he were a brand-new customer. And so the reason that his coverage was denied was that the first test results that indicated he could have a problem, even though he was not aware of the implications of those results, had shown up under a previous policy. So the insurance company came back and declared it a preexisting condition that they were not going to cover.

GROSS: Even though they were covering him at the time, but it was a different six-month leg. So…

Ms. TUMULTY: Well, that's what - yeah, that didn't make any sense to me, either. So I figured it just had to be some kind of, you know, bureaucratic mix-up or something, or, you know, okay, if this policy doesn't cover him, well maybe that old one did. But I found out I was wrong.

GROSS: And so you - I mean, you know what you're doing. You've covered health insurance. You're a national correspondent for Time. You know how to work the phones, how to talk to people, how to find out information. You did your best to get them to admit that they were wrong and to cover him, and they weren't saying that at all.

They were saying no, he's not covered. And you were making no progress at all. But you finally did, through a lot of investigation, find out something that had happened to a couple of subsidiary companies of this insurance company. Tell us what the insurance regulators in Connecticut found out about this company.

Ms. TUMULTY: Well, it was after I was well into the research for this story that I discovered that the very same health insurance company had been fined $2 million last year by the Connecticut insurance commissioner for doing practices that - to my ear, at least - seemed a lot like what my brother had gone through.

It was, by the way, the highest fine the insurance commissioner of Connecticut had ever imposed on a company. But what they were doing was in many, many cases, they would go back through people's medical records and find pretexts, essentially, to deny coverage.

For instance, there was one woman who development non-Hodgkin's lymphoma, and the insurance company went back through her records and discovered that on a previous visit to the doctor, she had mentioned to her doctor that she was feeling exhausted.

And so they said bang, preexisting condition. Essentially, she was supposed to have known that feeling tired meant she had non-Hodgkin's lymphoma. And you saw that with - in Connecticut with a number of other cases, as well, you know, people who develop multiple sclerosis who should've known that that's what they had.

So what happened was after a very long process in Connecticut, the company never did acknowledge any wrongdoing, but they did agree to pay a big fine.

GROSS: How were you able to use that to help your brother's case in Texas?

Ms. TUMULTY: Well, what I did was I called the Texas Department of Insurance, and I identified myself as both a journalist and a sister of an aggrieved kidney patient. And I just was asking, you know, how does the law in Texas work?

And I was describing this whole situation, and the people from the Texas Department of Insurance, there was a long pause on the other end of the line. And they said, would you do us a favor? Would you file a complaint?

So it turned out to be really easy. It took us maybe 10 minutes, filling out a form over the Internet. And that was in January. And less than a month later, in February, just last month, we got a reply from the insurance company. And they once again said that they had done absolutely nothing wrong, that everything that they did was justified under Texas state law, but that the extraordinary circumstances under this case merited that they would go ahead and pay on his previous claims because we had subsequently canceled the insurance policy.

So what they have agreed to do is go back over the claims from last summer - which, by the way, just to find out what was wrong with my brother was $14,000 worth of medical bills. So they've agreed to pay their part of that.

So far, I believe my brother has received a check for $13.

GROSS: Okay, so this insurance company said that it was not in the wrong. However, due to the extraordinary circumstances, they were going to pay the 50 percent of the medical costs for the time your brother was insured.

I guess I'm wondering if somebody who didn't have the sway that you did would have the same success that you had in getting the insurance company to pay.

Ms. TUMULTY: Well, I certainly got the attention, I think, of the Texas Department of Insurance. But I do think that, you know - one of my big lessons from all of this is that you've got to complain.

At the time when we were hit with this, you know, this $14,000 worth of medical bills and counting that were going to be much, much bigger as he progressed into treatment, I didn't even think to complain because we were so desperate to go out and find him the treatment that he needed.

Now I realize that you really do have to go and push. And I do think that people need - if they find themselves in this situation, need to find the regulatory authority that is over it and go right to them.

GROSS: Does it seem to you like it's part of the way some companies work that they do their best to deny you coverage, and then the way the game is played, you fight to get the coverage and sometimes they win and sometimes you win, but it's still cheaper for them than paying everything, all the submissions that come their way?

Ms. TUMULTY: Well, I do think that, you know, insurance companies do not make their money by paying claims. So yeah, I do think that's right, because my first call after the insurance company decided to deny the benefits - and I wasn't getting anywhere - was I called my brother's kidney doctor's office. And I got a hold of the woman who runs the billing office there, who's been doing this for 33 years, and she, like me, confidently said, oh, let me - this is ridiculous. Let me take a run at the insurance company.

And she called me back within an hour and said this company is never going to pay you a penny. You should cancel that insurance because the money that your brother is spending on those premiums, he's going to need it for his care.

GROSS: Now you learned a lot of things along the way in trying to get health care reimbursement for your brother. One of the things you learned was what you describe a paradox in medical costs, which is that people who can least afford to pay - the uninsured, or the under-insured - end up being charged the most. How did that play out with your brother? Was he charged more than somebody else would be?

Ms. TUMULTY: Oh, yes, a lot more. See, insurance companies and big programs like Medicare, because they have so many customers, can negotiate with the hospitals and the labs and the doctors and really negotiate down the charges.

But, for instance, my brother's kidney biopsy, which took place in a hospital last summer, he was charged $7,756 just for the hospital part of it. His insurance company would've been charged $900. So it was, you know, over seven times as much.

In a lot of his lab work, he was charged six times as much as an insured patient might have been charged, and one of those lab bills alone was $3,290.

And so I think what happens with a lot of uninsured patients is these bills are so huge that they have no choice. They just walk away from them. And that means that the hospitals and the labs and the doctors have to write them off, which means, essentially, everyone else is paying for those services.

GROSS: Another paradox that you found along the way was that if your brother got sick enough to need dialysis, the federal government would pick up the costs under the Medicare program for end-stage renal disease.

So, in other words, if your brother got so sick that he was on the verge of dying, he'd get coverage through the federal government, but nobody was going to pay to prevent him from getting to the point where he would die and require that coverage.

Ms. TUMULTY: Oh, and this I think is a, you know, the paradox of health care writ large in this country, which is that, you know, you can find help. You can find programs that will pay for really expensive things like dialysis, which is $60,000 a year. But what the system doesn't pay for as much, even for insured patients, is the kinds of stuff that will get you there - you know, preventive care.

And, you know, even in talking to my brother's primary care doctor in the program that we ultimately got him into, she said the problem with that is that by the time she sees patients, their conditions are so advanced, you know, they are diabetics whose legs are already numb. They are cancer patients whose disease is already in the advanced stages, and their treatment is much more expensive as a result.

GROSS: How is your brother now?

Ms. TUMULTY: My brother is still struggling with the kidney disease, and it does appear to be progressing. When he first saw the doctor last summer, he had something like 48 percent of kidney function. It's now between 35 percent and 40. So he is going to have to move to more aggressive and, I might add, more expensive kinds of treatment and hopefully to put off dialysis as long as we can.

GROSS: Does he have insurance now? I don't know who would insure him with such an expensive preexisting condition.

Ms. TUMULTY: Oh, boy. We went through so many paths that we went down before we got to treatment. You're right. There is absolutely no way he could now go out and buy a health-insurance policy on the open market, given how sick he is. But we were lucky.

Pat lives in Bear County, San Antonio, Texas, which since the 1990s has actually developed, through the county hospital system, a program that operates much like an HMO for people who make up to 200 percent of the poverty line, which Pat with his job does qualify for.

So we have been able to get him coverage under that. But I'm telling you, if he lived just across the county line in Atascosa County or Medina County, that program would not be available to him.

GROSS: From what you've told us, it seems that in order for your brother to be able to get decent health insurance coverage and to get what he was owed from the company that he did, for a while, have insurance with, he'd have to really read the fine print in the insurance policy, argue with them effectively, know what the state had to say about health insurance, what his county had to say about health insurance - it's an enormous amount of research to do when you're sick.

Ms. TUMULTY: You know, it really is. And, you know, and even people who get good health insurance through their employers, I don't think many people have read their health insurance policies.

I went back and re-read my brother's policy, and you know, a lot of it is jargon and technical language. And, you know, when a policy says it's non-renewable, I don't think that people understand what the implications of that are if they get sick.

GROSS: Well, Karen Tumulty, I want to thank you a lot for talking with us, and I wish your brother all the best with his health. Thank you very much.

Ms. TUMULTY: Thank you, Terry.

GROSS: Karen Tumulty is a national political correspondent for Time magazine. She writes about her brother's health insurance problems in the current edition.

Coming up: Health care economist Uwe Reinhardt diagnoses why our health care system is so frustrating. This is FRESH AIR. Transcript provided by NPR, Copyright National Public Radio.