Health insurance woes: Stuck in the middle

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By MARK ANDERSEN / Lincoln Journal Star

It’s a steamy morning in Lincoln, and the air conditioner of the Consumer Reports recreational vehicle does little but stir the smell.

Three of the magazine’s road warriors rolled into Lincoln the night before, on an odyssey to sample America’s health insurance woes.

The vast emptiness of the Plains has numbed them, but the health insurance struggles they’ve heard recently are as familiar as soaring gas prices and fast food.

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When Matt Herman sold his beer distributorship and retired, he had little idea of the large health insurance premiums he'd soon be paying. (Robert Becker)

When Matt Herman sold his beer distributorship and retired, he had little idea of the large health insurance premiums he'd soon be paying. (Robert Becker)

“What we’re seeing,” says Meg Bohne, senior member of the Consumer Reports Health Cover America Tour, “is people are not poor enough to qualify for help or not well enough to get the coverage they think they need.”

In that vast gap between poverty and prosperity where most Americans reside, she says, people have begun losing faith in this country’s health system.

The nation’s spending on health increased from $253 billion in 1980 to $2.4 trillion in 2008.

For employers, increases in health insurance premiums have greatly outpaced payroll costs in 16 of the last 20 years.

Much of the public knows only that they’re having troubles finding health insurance, keeping it, using it, paying for it, understanding it.

The Consumer Reports travelers heard that story in Maine, in Virginia, in Texas, and just now at the kitchen table of Matthew and Lynne Herman, the Lincoln couple they’ve come to film.

Like Matt Herman, people have become suspicious of and confused by the relationships between doctors, insurance companies and hospitals, Bohne says.

Nationwide, says Blake Hutson, another Consumer Reports RV traveler, there’s growing concern not only over obtaining health coverage but of using it.

Even if they have coverage, how much will it cost to walk into an emergency room for chest pain?

How long will it take before the final bill arrives?

Will they know it when they see it?

Nobody can say.

Matt Herman was irked when he responded to Consumer Reports’ invitation to share his health coverage woes. His insurance company had hired a telephone nanny to shame him into making doctor visits and watching his diabetes.

The 53-year-old retired beer wholesaler has spent roughly $12,000 a year on insurance premiums since COBRA coverage through his former business ended a few years ago.

COBRA gives workers who lose health benefits for reasons such as the loss of a job the right to keep their group health plan for a while, although generally they must also pay for that portion of the premium their employer paid.

In the years since, Matt’s insurance — obtained through the state’s Comprehensive Health Insurance Pool, or CHIP — hasn’t paid out a dime.

It comes with a $5,000 deductible for in-network care (twice that for out-of-network care).

He’s never hit his deductible.

By the time people contact Consumer Reports, Bohne says, they’ve hit a point where they need care or they’re struggling to pay for it.

The Hermans, having sold a business, are better off than most. Their story shows that almost everybody is affected, Bohne said.

Opinions over how to fix the nation’s health care system have varied more than the scenery beyond the RV dashboard, Bohne says, but the message that something needs to change is coming across. It repeats itself like stripes on the road ahead.

Conceivably, if Matt and Lynne Herman continue to be healthy, they could pay more than $100,000 to insurers before Medicare kicks in — if it’s still there — at age 65.

Matt’s father lived to be 70.

“At what point is it not going to be affordable?” Matt asks. “Where you throw your hands in the air and say, ‘We’ll see what happens.’”

He’s not yet there, not ready to absorb a possible $20,000 bill for something like an overnight hospital stay for a cardiac stent — something that costs $2,000 and looks like it fell out of a ballpoint pen.

If he ever needs specialized cancer drugs it will cover up to $1 million in lifetime benefits.

And the $1,000 he spends monthly for premiums he almost makes up in the discounts he gets on medicine and physician fees by being insured.

A 2007 Health Affairs report found hospitals often charge self-pay patients 2½ times as much as what some insurers pay and more than three times what Medicare pays.

“How do insurance companies decide what they’ll pay?” Matt asks. “I’d like to see it be more transparent.”

It didn’t used to be like this.

Matt and his father were the area’s wholesaler for Budweiser. The company employed 75 people when it was sold. Their group insurance covered 100 percent of health care for employees and families.

Then, 18 months after the company sold, Matt tried to get health coverage from eight different insurance companies.

Nobody would cover him, he said.

He’s diabetic and his wife is overweight, but they’re relatively healthy and follow their doctors’ advice.

Matt imagines the reasoning that led to denial of coverage: Oh, you have diabetes. You might have circulatory issues. It might cost us money. We don’t want to cover you.

He knew Nebraska’s CHIP program existed for high-risk individuals unable to procure health insurance elsewhere. It was the price that shocked him.

“State-mandated coverage,” he says, “I would have thought would be more comprehensive and more affordable.”

He wonders about where health care may be headed.

Businesses can’t afford to continue to bear those expenses, he says.

But he worries that a national health care program might harm the quality of care available.

“There’s no quick fixes or easy answers,” he says.

And yet: “At what point are we all going to be in the ER for free care?”

That’s the other fear the travelers on the Consumer Reports RV hear everywhere, Bohne says: “I’m having problems, but I’m really afraid of what’s going to happen to my kids and grandkids.”

Reach Mark Andersen at 473-7238 or mandersen@journalstar.com.