From CBS MarketWatch:
One couple’s descent into health-care hell
By Sarah Baicker, Medill News Service
Last update: 4:24 p.m. EST Dec. 9, 2007
WASHINGTON (Medill News Service) — Denise and Marvin Shaw did everything right. They both had good jobs, a nice home in Virginia and excellent health insurance through Denise’s Fortune 500 employer. In the middle of a national health-care crisis, the Shaw’s were secure and unafraid.
But in just over a year, and through no fault of their own, everything changed.
Their story illustrates the pervasiveness of the health-care problem in America — even for those who have access to health insurance, the slightest wrong move not only threatens peace of mind, but a family’s economic security.
It all began in 2006 when Denise, a 37-year-old Web developer from Chantilly, Va., was laid off from her job. She and Marvin fell back on the insurance program designed to tide people over in such situations, Cobra.
Cobra, an acronym for Consolidated Omnibus Budget Reconciliation Act, the federal law authorizing the program, requires insurers to provide temporary coverage to individuals who have left group insurance plans, often after losing their jobs. Cobra always costs more for the same coverage.
In their case, Denise was stunned to learn that their costs would go from $350 to $780 per month.
“My husband and I knew that we were getting, as my doctor likes to call it, the Cadillac plan,” Shaw said. “So we said, let’s just stay with it for 18 months and then we’ll get our own plan.”
At the time, the couple could have received coverage from Marvin’s small company’s plan, Shaw said, but it was “a bare-bones HMO,” and they would have paid the same monthly fee.
Following her layoff, Shaw decided to work for herself instead of going to another large company. She did not think getting reasonably priced insurance would be a big problem. But by the time the Cobra coverage expired in September, she had spent months desperately searching for a replacement.
The Shaws decided to apply to Aetna because that’s what they had when she worked for the Fortune 500 company. “They had all our medical records — it should be easy, no problem,” Denise said.
No coverage to be found
But no problem soon became no insurance as Aetna, and then company after company, refused to cover Shaw because she had two preexisting conditions: allergy-induced asthma and a benign pituitary tumor. Treatment for both conditions had been covered, without exception, under her previous plan.
As a last resort, the couple tried to get insured through Marvin’s HMO plan. But they were told they couldn’t enroll until February, then five months away. They were stuck, uninsured and uninsurable.
Shaw felt punished simply for receiving necessary health care. Had she not gotten treatment for her asthma, for instance, future insurance companies wouldn’t have labeled it a “preexisting condition.” She would have been considered lower-risk and her premiums likely would have been lower.
Relatively speaking, Shaw is healthy. She has never been hospitalized for her asthma, a condition shared by 22.2 million Americans, according to the American Lung Association. The tumor on her pituitary glad disappeared with medication, which Shaw continues to take daily to prevent its return.
“That’s what really bugs me,” she said. “This isn’t like lung cancer. It never even occurred to me that (the tumor) could be an issue because it was benign.”
Once Shaw’s Cobra coverage expired, there was one hope: Under federal law, for 63 days after a person’s health insurance benefits expire, any insurance company they apply to must agree to offer coverage.
The price, however, is left up to the individual health insurance providers.
The companies that eventually offered the Shaws coverage did so at devastatingly high rates. Aetna, for example, gave them two options: a $2,400 per month premium with a $1,000 deductible, or a $2,500 deductible for $1,800 a month.
“I said, unless you’re going to turn around and send that money to BBT Mortgage, no, sorry,” she said.
After those 63 days, Shaw would have become uninsurable. Because of her status as a provider “risk,” unless she got another full-time job with a company that provided group benefits, she was unfit to be insured.
A costly solution
After a scary six-week period during which they were uninsured, the Shaws eventually did find coverage. Mega Life and Health Insurance Co., a provider Shaw found through a networking group, offered them coverage for just under $800 a month — with a $10,000 deductible. The original deductible on their Aetna plan was $500 a month.
Over 18 months, then, the Shaws’ health insurance costs increased by more than $5,000 per year, over $100,000 over 20 years.
And if a medical emergency arises?
“I’m still trying to figure that out,” Shaw said. “Basically, we’ll have to depend on the hospital taking a payment plan, at this point. I don’t know how we’ll do it.”
Their struggles with health insurance changed their lives forever. After the new year, Shaw said, she’ll consider taking on a second job, in case she ever needs to foot a $10,000 health care bill.
“It’s funny,” Shaw said. “I think if I knew then what I know now, would I do things differently (and forego treatment)? I don’t really know the answer.”
“That’s pretty much how I feel: stuck. I never want to be in the same boat again.”
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