The Trials Of Paying For Health Care In A Recession
Howard County Demographics
With health care overhaul back on Washington's agenda, NPR went to one locale to see how the big national issues play out there. In Howard County, Md., near Baltimore, we spoke with patients, doctors, administrators and employers about the costs of health care and access to the health care system.
Howard County is not typical: It's rich. It's progressive. The Maryland state government sets hospital fees. The local hospital is part of the elite Johns Hopkins system. And last year, the county itself launched its own program for the uninsured. If health care reform can work anywhere, it should work here.
But like the rest the country, Howard County is facing the impact of the recession: Employers have to cut back on benefits, so employees cut back on their coverage.
The Recession
Herb Huston, 61, was in a semiprivate room at Howard County General last month. Until that week, he had seldom seen the inside of a hospital. He was in the hospital for the first time in 1956 for a tonsillectomy and again in 1973 for injuries from an auto accident.
Herb worked as a computer programmer from the late 1960s until 2005 on everything from huge mainframe computers to personal computers and "quite a few things in between," he says.
(Katie Hayes/NPR)
Huston says he always had health insurance and contributed premiums for years but hardly ever filed claims against it.
Then, in his late 50s, Huston was laid off. For 18 months, he was covered by COBRA. But then his COBRA expired. Huston knew that he needed another health insurance policy.
"I was beginning to search around for a replacement plan when the current economic crisis hit," he says. "And instead of taking on new expenses, I had to desperately trim back my already existing expenses. The luckiest item for me was that I actually paid off my mortgage in August of last year."
The unluckiest was what happened one Saturday night in May. Huston says he was home and took an after-dinner nap. He awoke at 10 p.m. with "pretty acute chest pains."
He knew it was a heart attack. He called 911 and was rushed to the hospital, where he received a cardiac catheterization. Three days later, he was in good spirits, completely satisfied with his treatment and trying not to think about the cost, which should easily exceed $50,000 — a cost he is now responsible for.
"The various insurers for my employer got a real bargain from me," Huston says.
But that doesn't matter: Huston is uninsured. He is neither old enough for Medicare nor poor enough for Medicaid.
"And the thing is, this is going to be continuing," he says. "I've gone from someone who had very little interaction with the medical profession to the complete opposite."
All Expenses Covered
On the other hand, 62-year-old Judy Weeter of Ellicott City, Md., was also treated at Howard. The divorced mother of one grown child was diagnosed with breast cancer in February.
"I pay no premium, none. I'm one of the few fortunates — that is one of the benefits of where I work," says Weeter, who is an executive assistant for a search firm that places government contractors. "I have no monthly copayments for my health insurance. That was a marvelous plus of this job I have."
At Maryland Oncology, Weeter was getting her second chemotherapy treatment. She already had a lumpectomy and she expects radiation treatments after the chemo. And the cost to her, she says, will probably be nothing other than her $20 copays.
"I'm starting to get those reports back from my health insurance and I'm seeing the many many many many thousands of dollars being spent on me and I've had one treatment and two surgeries," Weeter says. "It's incredible. I'm blessed. I know it."
Most people in Howard County are somewhere between Weeter's situation at the top of the scale with perfect insurance coverage and Huston's at the other end with no coverage at all. But because of the recession, a lot of people have reduced their coverage.
The Burden Of Costs
Linda Faggio administers the oncology practice where Weeter gets chemo. She says she is seeing an increasing number of patients who are underinsured and can't afford adequate coverage.
"The burden of the cost of that is now their own," Faggio says. "They may have a $5,000 or $10,000 deductible and that's the only way they afford coverage at all. No one anticipates that they're going to be diagnosed with cancer. It's not unusual to have a dose of chemotherapy being several thousand dollars a dose up to even $10,000 a dose."
Often those patients have reduced their coverage because their employers have reduced their contributions.
Lisa Jolles, a Howard County insurance broker, says her clients — the employers — have typically experienced huge losses of business in the recession.
"A lot of them, their thinking is, 'The employee may have to pay more for the health plan, but they still have a job,' " Jolles says.
One of her clients is Lin Eagan, who employs 15 people at Lakeview Title in Columbia, Md. They do mortgage closings. There's been a rare bright spot in the business lately — homeowners are refinancing en masse, so there are closings once again.
But when the residential real estate crashed, Eagan cut her staff, and she went from paying 100 percent of her employees' health insurance to a 50-50 split. There are also higher deductibles that are covered in part by health savings accounts.
"In 2008 we didn't know what hit us, so of course we needed to make adjustments for the economy," Eagan says. "Every business did. Obviously we needed to look at cuts in the payroll. In our whole budget, health care was a big number."
For a family of four, Eagan says she guesses it cost $1,100 a month, or about $13,000 a year. For 25 employees, paying 100 percent was a lot of money.
"That's a number that becomes unsustainable especially when the economy starts to contract," she says.
Small businesses like Eagan's have been making similar decisions in Howard County and all over the country. Workers who are laid off get COBRA and without a new job could end up uninsured. But workers who keep their jobs face steeply increased premiums as the burden shifts to them, and they take cheaper options and risk being underinsured.
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ROBERT SIEGEL, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris.
We're going to begin this hour with perspectives on health care from the White House - and from one county in Maryland.
SIEGEL: First, President Obama took his effort to sell a health care overhaul to the American Medical Association. The AMA represents about a third of practicing doctors. Mr. Obama spoke today at the group's annual meeting in Chicago.
President BARACK OBAMA: The cost of our health care is a threat to our economy. It's an escalating burden on our families and businesses. It's a ticking time bomb for the federal budget and it is unsustainable for the United States of America.
NORRIS: The president spoke out against critics who say he is advocating government-run health care. He said they are not telling the truth.
SIEGEL: And he reemphasized a guiding principle - fix what's broken and build on what works.
Pres. OBAMA: If we do that we can build a health care system that allows you to be physicians instead of administrators and accountants, a system that gives Americans…
(Soundbite of applause)
Pres. OBAMA: …a system that gives Americans the best care at the lowest cost. A system that eases up the pressure on businesses and unleashes the promise of our economy, creating hundreds of thousands of jobs, making take-home wages thousands of dollars higher and growing our economy by tens of billions of dollars more every year.
NORRIS: Mr. Obama outlined reforms that range from changing how doctors get paid, to investing more in preventive care, to computerizing medical records.
Pres. OBAMA: It simply doesn't make sense that patients in the 21st century are still filling out forms with pens on papers that have to be stored away somewhere. As Newt Gingrich has rightly pointed out, and I don't quote Newt Gingrich that often…
(Soundbite of laughter)
Pres. OBAMA: …we do a better job tracking a FedEx package in this country than we do tracking patients' health records.
(Soundbite of applause)
NORRIS: President Obama speaking today to doctors with the American Medical Association.
SIEGEL: With health care high on Washington's agenda, we went to one locale to see how the big national issues play out there - a place we'll return to as the debate progresses. In Howard County, Maryland near Baltimore, I spoke with patients, doctors, administrators and employers about the costs of health care and about access to the health care system. I also asked them: What would define success at health care reform?
Unidentified Woman #1: Clarity.
Unidentified Man #1: Offering affordable, comprehensive, quality health coverage for everyone whose…
Unidentified Man #2: Appropriate care for all Americans. That does not mean providing access to care through the emergency department for everyone.
Unidentified Woman #2: Success would be working collaboratively with the government, with payers, with physicians.
Unidentified Woman #3: We're not having to spend all of her social security check on one of her prescriptions - it's like $500 a month.
Unidentified Man #3: Having all kids be insured, and that parents have adequate financial coverage for that access.
Unidentified Woman #4: I think success would be everybody covered. But I think just kind of like auto insurance, you know, it's a pay or play.
SIEGEL: Howard County is not typical: It's rich, it's progressive, it's in Maryland, where the state government sets hospital fees. The local hospital is part of the elite Johns Hopkins system. And last year, the county itself launched its own program for the uninsured. If problems with health care can be solved anywhere, they should be solved here. But after hearing from so many of the different stakeholders, it's the magnitude of the problems I was struck by, not the obviousness of the solutions.
(Soundbite of hospital)
Unidentified Man #4: Back in the (unintelligible).
SIEGEL: The problem we'll hear about today: the recession. Take Herb Huston, who's 61. He was in a semiprivate room at Howard County General last month. Until that week, he had seldom seen the inside of a hospital.
Mr. HERB HUSTON: First time was in 1956 for a tonsillectomy. Second time was in 1973 for injuries in an auto accident.
SIEGEL: Herb worked as a computer programmer from the late 1960s until 2005.
Mr. HUSTON: I worked on everything from huge mainframe computers down to personal computers and quite a few things in between.
SIEGEL: He says he always had health insurance, insurance that he very seldom claimed against. Then in his late 50s, Herb was laid off. For 18 months he was covered by COBRA. Then COBRA ran out and he didn't have a job. Herb knew that he needed another health insurance policy.
Mr. HUSTON: I was beginning to search around for a replacement plan when the current economic crisis hit. And instead of taking on new expenses, I had to desperately trim back my already existing expenses. The luckiest item for me was that I actually paid off my mortgage in August of last year.
SIEGEL: The unluckiest was what happened one Saturday night in May.
Mr. HUSTON: I was at home about 10 p.m. when I woke from an after-dinner nap with pretty acute chest pains.
SIEGEL: Herb Huston knew it was a heart attack. He called 9-1-1 and by the time I met him, three days later, he had received a cardiac catheterization. He was in good spirits, completely satisfied with his treatment and trying not to think about the cost, which should easily exceed $50,000.
Now, thinking about your situation, with so few hospitalizations in your life…
Mr. HUSTON: Yes.
SIEGEL: …all those years you were contributing premiums.
Mr. HUSTON: Exactly.
SIEGEL: Putting money in.
Mr. HUSTON: The various insurers for my employer got a real bargain from me 'cause I hardly ever made claims.
SIEGEL: But now Herb is uninsured. He is neither old enough for Medicare, nor poor enough for Medicaid.
Mr. HUSTON: And the thing is this is going to be continuing. I've gone from someone who had had very little interaction with the medical profession to the complete opposite.
SIEGEL: And the cost of it all is on him.
Unidentified Woman #5: I'm just going to do your vital signs. I know that Dr. Minford(ph) added some new…
SIEGEL: On the other hand, there is Judy Weeter, who was also treated at Howard County General. She is 62. She lives in Ellicott City, Maryland. She's divorced, the mother of one grown child.
Ms. JUDY WEETER: And I was diagnosed with breast cancer in February 2009. And I pay no premium, none. I'm one of the, I think, probably few fortunates that -that is one of the benefits at where I work.
SIEGEL: Your employer.
Ms. WEETER: My employer. And I have no monthly co-payments for my health insurance. That was a marvelous plus with this job I have.
What was in my drugs that is changing taste - do you know?
Unidentified Woman #5: The chemotherapy will change your taste.
Ms. WEETER: Oh, it's the chemo that's doing that.
Unidentified Woman #5: Yes, and you may feel that…
SIEGEL: It's a private sector job. She's an executive assistant with a search firm. I was with Judy Weeter at Maryland Oncology. She was getting her second chemotherapy treatment that day. She has already had a lumpectomy, and she expects radiation treatments after the chemo. The cost to you will be…
Ms. WEETER: Probably zero.
SIEGEL: Zero.
Ms. WEETER: Other than my co-pays, that's $20. It's my entire health cost.
SIEGEL: A $20 co-pay.
Ms. WEETER: Co-pay. Knock on…
(Soundbite of knocking)
SIEGEL: The…
Ms. WEETER: So far. I'm starting to get those reports back for my health insurance. And I'm seeing the many, many, many, many thousands of dollars being spent on me. And I've only had one treatment and two surgeries - and that's incredible. I'm blessed, I know it.
SIEGEL: Most people in Howard County, Maryland are somewhere between Judy Weeter's situation at the top of the scale with perfect insurance coverage and Herb Huston's at the other end with no coverage at all. But because of the recession, a lot of people have reduced their coverage. Linda Faggio administers the oncology practice where Judy gets chemo.
Ms. LINDA FAGGIO (Oncology Practitioner): We're seeing many patients that are uninsured, but also increasing number of patients who are underinsured and are simply not able to carry that adequate coverage or afford the adequate coverage - and the burden of the cost of that is now their own.
SIEGEL: Out of pocket they're paying for their own chemotherapy (unintelligible).
Ms. FAGGIO: Absolutely. And, you know, they may have a 5,000 or a $10,000 deductable, and that's the only way they can afford coverage at all. No one anticipates that they're going to be diagnosed with cancer. And it's not unusual to have a dose of chemotherapy be multiple several thousand dollars a dose, up to even $10,000 a dose.
SIEGEL: Often those patients have reduced their coverage because their employers have their reduced their contributions. Lisa Jolles is a Howard County insurance broker. Her clients, the employers, have typically experienced huge losses of business in the recession.
Ms. LISA JOLLES (Insurance Broker): A lot of them, their thinking is the employee may have to pay more for the health plan, but they still have a job.
SIEGEL: In hard times - save the jobs, trim the benefits.
Ms. JOLLES: That's what I'm seeing.
SIEGEL: Yeah.
Ms. JOLLES: I mean, I'm seeing employers who'd paid 100 percent of everything -cutting back to we're paying 25 percent of everything, but you still have a job.
Ms. LIN EAGAN (Lakeview Title): Well, before we start, let's just check a couple of…
SIEGEL: One of her clients is Lin Eagan, who employs 15 people at Lakeview Title in Columbia, Maryland. They do mortgage closings.
Ms. EAGAN: Property address is correct.
SIEGEL: There's been a rare bright spot to the business lately. Homeowners are refinancing en masse, so that there are closings once again.
Ms. EAGAN: Interest rate: 4.75 percent.
SIEGEL: But when the residential real estate market crashed, Lin Eagan cut her staff and she went from paying 100 percent of her employees' health insurance to a 50/50 split. There are also higher deductibles that are covered, in part, by health savings accounts.
Ms. EAGAN: Of course, 2008, we didn't know what hit us. So, of course, we needed to make adjustments for the economy - every business did. Obviously we needed to look at cuts in the payroll. And our whole budget health care was a big number.
SIEGEL: How big? For a family of four, how much does health insurance cost?
Ms. EAGAN: Oh, I would guess probably about 1,100 a month.
SIEGEL: 1,100 a month or $13,000 a year, something (unintelligible).
Ms. EAGAN: Right, right, yeah.
SIEGEL: What you used to do is cover that 100 percent.
Ms. EAGAN: Mm-hmm. Mm-hmm.
SIEGEL: Fifty percent would be 6,500 bucks that you pay for, 6,500 bucks that the employee pays for families.
Ms. EAGAN: Right, right, mm-hmm.
SIEGEL: Multiplied by 15 people adds up.
Ms. EAGAN: Right, and, actually, when we were doing that, we had probably 25 people, so it really added up.
SIEGEL: We're talking about a couple hundred thousand dollars that's…
Ms. EAGAN: Exactly. Exactly.
SIEGEL: That's the difference here between which way you go.
Ms. EAGAN: Mm-hmm, exactly. And that's certainly a number that becomes unsustainable, especially when the economy starts to contract.
SIEGEL: Small businesses like Lin Eagan's have been making similar decisions in Howard County and all over the country. Workers who are laid off get COBRA, and without a new job they could end up uninsured. But workers who keep their jobs face steeply increased premiums as the burden shifts to them, and as they take cheaper options and risk being underinsured.
Tomorrow we'll hear about Howard County's unusual program for working people with low incomes and no insurance and what that program may tell us about more ambitious plans for the entire country. Transcript provided by NPR, Copyright National Public Radio.
