Marketized Health Care: Some Horrible Choices at the Margin
When I was in grad school in England, one of the dorms had a radiator that required the user to insert pound coins into a slot for heat. I found this bizarre at the time. . . but perhaps it will be a model for hospitals soon. As an article entitled “Cash Before Chemo” suggests, IV drips may as well include credit card readers in some hospitals:
[For the effectively uninsured Mrs. Kelly,] [c]hemotherapy would continue for more than a year, as would requests for upfront payments. At times, she arrived at the hospital and learned her appointment was “blocked.” That meant she needed to go to the business office first and make a payment. One day, Mrs. Kelly says, nurses wouldn’t change the chemotherapy bag in her pump until her husband made a new payment. She says she sat for an hour hooked up to a pump that beeped that it was out of medicine, until he returned with proof of payment.
To the Journal’s credit, reporter Barbara Martinez reveals the complexity of the story. . . including the fact that Mrs. Kelly’s household appears to have rental income of about “$11,000 a month before taxes and maintenance costs [and] interest income of about $35,000 a year from two retirement accounts.” So why didn’t they have insurance? Turns out Mrs. Kelly did, but was part of an ever-growing group of underinsured Americans:
[Kelly] signed up for AARP’s Medical Advantage plan, underwritten by UnitedHealth Group Inc., three years ago after she quit her job as a school-bus driver to help care for her mother. . . . She says that at the time, she hardly ever went to the doctor. “I just thought I needed some kind of insurance policy because you never know what’s going to happen,” says Mrs. Kelly. She paid premiums of $185 a month.
A spokeswoman for UnitedHealth, one of the country’s largest marketers of limited-benefit plans, says the plan is “meant to be a bridge or a gap filler.” She says UnitedHealth has reimbursed Mrs. Kelly $38,478.36 for her medical costs. Because the hospital wouldn’t accept her insurance, Mrs. Kelly paid bills herself, and submitted them to her insurer to get reimbursed.
Which brings us to the question: do we really want to let people like Mrs. Kelly sign up for “cut-rate” insurance that poses the risk of bankrupting them should anything serious go wrong? It’s now a mantra on the right that “we” (i.e., those unable to afford a real insurance plan) should have the freedom (i.e., nothing left to lose) to buy “last year’s medicine at last year’s prices” and that “we” (again, very often the poor among us) are overinsured. Try telling that to Mrs. Kelly, who “rationally chose” to be underinsured.