Social Contracts, American-Style I

The last time I looked at the phenomenon of bankruptcy in the States—and, yes, it appears that Americans lead the world in this category too, inasmuch as comparitive date are available—as they do in public indebtedness, private indebetedness, military spending, the number of concurrent wars of foreign aggression, the percentage of their own population they lock up behind bars, the number of foreign nationals they ship around the world to find somebody else to torture them, and above all the self-righteous smugness without which these other world-class achievements would prove unsustainable past the noon-time hour—two things had occurred: A very important study of the role that medical debt plays in the filing of personal bankruptcy had just been published; and the Bunko Artist-in-Chief had just delivered his State of the Union Address.

Among the allegations made during the latter of these (Feb. 2):

To make our economy stronger and more productive, we must make health care more affordable, and give families greater access to good coverage — (applause) — and more control over their health decisions. (Applause.) I ask Congress to move forward on a comprehensive health care agenda with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees — (applause) — expanded health savings accounts — (applause) — and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need. (Applause.)

(Incidentally: Why on earth do you suppose the February 3 issue of the New Zealand Herald decided to publish the prepared text of the wretched State of the Union address—in its entirety, no less?)

But instead of recognition of the devastating impact that the costliest and least-accessible health-care system in the world exacts on tens-of-millions of Americans every day, the Bunko Artist-in-Chief turned to a topic of far greater concern to his administration: Social Security—a “great moral success of the 20th century,” his speechwriters conceded (my guess is that they smell blood and don’t want to overplay their hand—otherwise, it’s a Commie Conspiracy), but now inexorably “headed toward bankruptcy” and “in need of wise and effective reform.”

Health care and Social Security are two of the major components of the shared lives we lead in the United States of America. The one exacts an enormous cost on a great many of us, financially destroying some of us along the way. The other is among the most successful—and perhaps the most successful—state-managed, peace-oriented, non-smash-them-in-the-face programs in U.S. history. And yet the government wouldn’t dream of changing the current health care system—except, perhaps, to exacerbate its worst tendencies. Social Security, on the other hand, a large segment of the government is convinced is in some kind of long-term financial predicament (it is not—unless they cause one), while a smaller though nonetheless incredibly committed segment of the government and private sector would like to “fix” it. No matter what.

(Quick aside. It’s almost too embarrassing to touch these lies about the long-term “insolvency” (etc.) of Social Security, and the desire of certain parties to “fix” it—namely, to take it out and shoot it. Nevertheless. Imagine what these bullshiters are trying to get people to swallow. The government either appropriates the funds for an item in its budget, or it does not. This is a choice. Period. But if the goverment chooses not to fund an item, that is to say, if the government chooses to cut this item’s funding, this particular choice does not mean that the item or the program that it represents is “insolvent” or “bankrupt” (quote-unquote). Quite the contrary. What this choice means, simply, is that the government has not funded the item. Nothing more. Likewise, there is nobody walking around Washington or New York City today who would ever dream of saying something to the effect that the long-term prospects of the Department of Defense don’t look so good, because by 2018, its expenditures will begin to exceed its revenues, leaving it bankrupt by 2042. Nobody in their right mind would talk like this; and if somebody did, everyone else would recognize it to be a fraud. The government either funds a program, or it does not. But when it doesn’t, this program does not mysteriously disappear because it faces some long-term insolvency crisis. So then why talk about Social Security as if it faces precisely such a long-term crisis? You tell me. Like I said above: It’s almost too embarrassing to touch bullshit that smells as bad as this.—The Bunko Artist-in-Chief indeed. Somebody ought to give Tex a shovel to carry around with him. Because this is what the guy’s role within the presidential administration that bears his name has come down to.)

In 2001 (i.e., the year from which the study of what the authors call “medical bankruptcy” was drawn), medical debt contributed heavily to 46.2 of the bankruptcies filed. Indeed. In a total of 54.5 percent of the bankruptcies filed that year, medical debt played at least some contributory role.

The authors write:

[M]edical bankruptcies are clearly increasing. In 1981 the best evidence available suggests that about 25,000 families filed for bankruptcy in the aftermath of a serious medical problem (8 percent of the 312,000 bankruptcy filings that year). Our findings suggest that the number of medical bankruptcies had increased twenty-threefold by 2001. Since the number of bankruptcy filings rose 11 percent in the eighteen months after the completion of our data collection, the absolute number of medical bankruptcies almost surely continues to increase.

What prompted such a dramatic increase? Their paper suggests several major causes for these results. The opposition to any comprehensive, universal system for the provision of health care in this country on the part of the corporate and a large part of the state sectors is one of them—a phenomenon unique among the world’s rich countries. Another major factor is the upward-spiraling costs of the vastly inefficient, for-profit medical-industrial complex. This leaves most Americans either uninsured, underinsured, or at the mercy of gaps and disruptions in what medical insurance they do enjoy. Much of which is tied to their employment, and leaving them to face high out-of-pocket expenses, high co-payments, criminally-overpriced prescription drugs, and the like.

In some of the promotional literature for this study (widely quoted in news reports at the time), lead author Dr. David Himmelstein remarked that “Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy.”

But there is another one, attributed to Dr. Quentin Young, the longtime national coordinator of the Physicians for a National Health Program (#312-782-6006):

The paradox is that the costliest health system in the world performs so poorly. We waste one-third of every health care dollar on insurance bureaucracy and profits while two million people go bankrupt annually and we leave 45 million uninsured. With national health insurance (“Medicare for All”), we could provide comprehensive, lifelong coverage to all Americans for the same amount we are spending now and end the cruelty of ruining families financially when they get sick.

As the Bunko Artist-in-Chief continues his Social Security tour, remember the never-ending—and real—crisis in American health care.

More important, remember the crisis in how we, as Americans, live.

State of the Union Address, White House Office of the Press Secretary, February 2, 2005
Fact Sheet: The State of the Union,” White House Office of the Press Secretary, February 2, 2005
Strengthening Social Security for Future Generations,” White House Office of the Press Secretary (Homepage)

Illness And Injury As Contributors To Bankruptcy,” David U. Himmelstein et al., Health Affairs, posted February 2, 2005. (For the PDF version of the same article.)

Medical bills to blame for half of all family bankruptcies,” Lee Bowman, Scripps Howard News Service, February 1, 2005
“Insured go broke, study says,” Jennifer Heldt Powell, Boston Herald, February 2, 2005
Medical Bills Cause about Half of Bankruptcies, Study Finds,” Liz Kowalczyk, Boston Globe, February 2, 2005
Illness triggers half of bankruptcies,” Lori Rackl, Chicago Sun-Times, February 2, 2005
“Medical Bills Pave Way to Poorhouse, Study Says,” Bonnie Miller Rubin, Chicago Tribune, February 2, 2005
Medical bills blamed in half of bankruptcies,” Diana Keough, Cleveland Plain Dealer, February 2, 2005
“Study links illnesses to bankruptcy jump,” Todd Ackerman, Houston Chronicle, February 2, 2005
“Medical Bills Induce Many Bankruptcies,” Justin Dickerson, Los Angeles Times, February 2, 2005
Study Ties Bankruptcy to Medical Bills,” Reed Abelson, New York Times, February 2, 2005
“Bankrupted by illness,” Kathleen Kerr, Newsday, February 2, 2005
“More in 20s Risk Medical Bills,” Don Colburn, The Oregonian, February 2, 2005 [see below]
“Study: Medical Debt, Bankruptcies Often Tied,” Christopher Snowbeck, Pittsburgh Post-Gazette, February 2, 2005
Bankruptcy May Be One Illness Away,” Rachel Brand, Rocky Mountain News, February 2, 2005
“Illness can kill financial health,” Lisa Rapaport, Sacramento Bee, February 2, 2005

Health Economics 101,” Paul Krugman, New York Times, November 14, 2005 (as posted to Truthout)
Bad for the Country,” Paul Krugman, New York Times, November 25, 2005 (as posted to Truthout)

FYA (“For your archives”):

The Oregonian (Portland, Oregon)
February 2, 2005 Wednesday
Correction Appended

Sometimes by choice — but mostly for lack of a job with built-in benefits — Oregonians in their 20s are twice as likely as other adults to go without health insurance.

More than one in three adults ages 20 to 29 lack insurance, the most recent statewide data show. The uninsured rate for that group jumped to 38 percent last year, from 31 percent in 2002.

The main reason: Young people are more likely than older adults to be unemployed, or self-employed, or employed part time, or employed by small businesses that don’t offer company-paid health benefits.

As a group, young people need less medical care than adults. But by going uninsured, they often play a risky game of roulette, quickly racking up high, out-of-pocket medical bills when an accident or illness occurs.

Phil Kelley, 24, was employed full time but uninsured at Chez Jose restaurant in October when he felt a painful lump under his left armpit. A battery of blood tests, CT images and MRI scans helped doctors diagnose lymphoma, a cancer of the lymphatic system, a key part of the body’s immune defense.

Kelley’s medical outlook is favorable, with treatment including twice-a-month chemotherapy at OHSU Hospital. But already he has an $8,000 bill from Oregon Health & Science University for diagnostic testing alone.

“Young people get sick, too,” said Dorothy Kelley, Phil’s mother.

Kelley’s intravenous chemotherapy is aimed at shrinking several nickel-sized cancerous tumors in his armpit, abdomen and leg. He hasn’t received a bill for treatment and hopes to find a way to stretch out the payments to OHSU.

For people not covered through a job or a government-paid plan, such as Medicare or Medicaid, private policies are available. But few young people choose to pay the premiums, which can run several hundred dollars a month or more.

A youthful sense of immortality also plays into that, said Tina Edlund, data and research manager for the Office for Oregon Health Policy and Research, which advises the governor and the Legislature on health issues. “They kind of think they’re going to live forever,” Edlund said. “Health insurance is not high on their lists.

“My son thinks about car insurance a lot more than he thinks about health insurance.” He’s 21.

Jennifer Nelson, 26, who works part time and has no health insurance, said, “If something bad happened, I don’t know what I’d do. But I can’t spend my life freaking out about that.”

Nelson grew up in Portland and has a degree in English literature from Portland State University. She works 25 hours a week as a cocktail waitress at a Portland bar.

She had health insurance through a previous job but didn’t enjoy the work. She likes the flexibility of working part time. “Taking a job just for the sake of having health insurance isn’t worth it,” she said.

Disparity linked to income

Full-time college students can stay on their parents’ health insurance policies until their 23rd birthday. But this benefits mainly upper-income families, a study by the Commonwealth Fund concluded.

The study found a striking difference between college-age adults from families with incomes in the top 20 percent and those from families with incomes in the bottom 20 percent. Only 6 percent of college-age adults from the most affluent families were uninsured. Among the poorest families, 53 percent were uninsured.

Young adults without health insurance tend to skip preventive care and delay responding to early warning signs of illness, the Commonwealth study found. Forty percent reported receiving no preventive care — such as blood pressure checks or Pap tests — during the previous year. A similar proportion said they wait “as long as possible” before seeking care when sick.

“You could get yourself in a world of hurt,” said Micah Shelton, 27, an uninsured paramedic for Metro West Ambulance in Washington County. “If something major happens, I’d be up the creek.”

Shelton’s employer recently stopped offering medical and dental coverage to workers with at least six months’ tenure. As an alternative, employees can set up a health savings account, depositing $100 a month, with the company contributing $500 a year.

But coverage through the account comes with a deductible of $5,000 per family.

Shelton makes about $15 an hour and is guaranteed at least a 30-hour workweek with Metro West. He loves the work. But he’s looking for another job that will provide health insurance as an employee benefit.

“Here I am a health care provider,” Shelton said, “and here I am without health insurance.”

In the meantime, he has bought two six-month private medical policies, paying more than $300 a month out of pocket for his wife, Molly, who works part time, his 5-year-old stepson and their 5-month-old son.

No one in the family has dental coverage.

Medical bills and bankruptcy

A new national survey shows that medical bills contribute to about half of the 1.5 million personal bankruptcies filed each year.

The study, conducted by two Harvard researchers and published today by the quarterly journal Health Affairs, is based on bankruptcy records in five states: California, Illinois, Pennsylvania, Tennessee and Texas.

Even an insurance policy is no guarantee against medical debt, because many plans limit coverage and charge high deductibles or copay fees before benefits kick in.

A majority of people who file bankruptcy because of health expenses had insurance and owned a home at the start of their illness, the Harvard researchers found. Still, patients were left with big out-of-pocket expenses.

Dr. David Himmelstein, the lead author, likened health insurance to “an umbrella that melts in the rain.”

Phil Kelley has never even had such an insurance umbrella.

While he undergoes chemotherapy, Kelley lives with his mom in her Northeast Portland apartment. Dorothy Kelley, 62, has health problems of her own — and the big medical bills that come with them.

She has lung disease, including emphysema, and had to quit her job with a financial investment firm last year. Her breathing requires a constant oxygen boost, provided through a plastic tube that passes beneath her nostrils. She can’t be on her feet for more than a few minutes at a time.

A recent 10-day stay in the hospital for pneumonia and a bleeding ulcer has left her with an unpaid medical bill of $29,300. She won’t qualify for federal Medicare insurance until late next year. Her portable oxygen supply alone costs nearly $400 a month.

Phil Kelley was laid off last month by Chez Jose and is looking for another restaurant job. He plays the drums in a group hoping for gigs. But until he gets hired, his only reliable income is $103 a week in unemployment payments.

He has no idea how he’ll pay off his existing $8,000 bill, let alone future ones for his anti-cancer treatment.

Even with the job that he has not yet found, he said, it will be difficult.

He’ll “just try to pay it over time and see what happens.”

PUBLISHED CORRECTION RAN FRIDAY, 2/4/2005, FOLLOWS: * Metro West Ambulance provides medical and dental insurance to employees who have worked there at least six months. As of Feb. 1, the company offers employees medical coverage through Health Savings Accounts into which the employer contributes $500 a year. Employees can choose to contribute from zero to $2,000 a year, depending on their expected medical needs. Coverage comes with a deductible of $2,500 per family. Employees pay no out-of-pocket co-pays. The account is combined with a health plan that offers as much as 100 percent coverage once the deductible is met. All Metro West Ambulance employees who have worked at the company longer than six months are covered under a separate dental plan not associated with the account. A Page One story in Wednesday editions incorrectly stated the company does not offer health or dental insurance and gave the wrong amount for the family deductible. The same story incorrectly described Phil Kelley as a full-time employee of Chez Jose; he was part time. The restaurant provides health insurance for full-time managers.

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