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November 25, 2007
One More Interest Against Universal Coverage
Many Beltway insiders believe fundamental reform of the health care system will happen after the 2008 elections. Just think of all the "there but for the grace of God go I" stories like Sergio Olaya's:
Mr. Olaya, 21, is struggling with $255,000 of medical bills incurred by his mother before she died in April from an aggressive form of brain cancer. . . .To pay the bills, he is selling the Maryland home where he lived with [her].
His mother . . . had health insurance in most of her jobs over the last 20 years. . . . But she had been unemployed and uninsured since December. [She] had applied for a new federal job. When the job offer finally came in March, her son said, she had just suffered a stroke and could not get out of bed to answer the telephone. In another month or two, she might have had health coverage through her new job.
So Olaya loses big time due to our crazy quilt coverage system.
But I fully expect opponents of reform to discount every story like this as unusual, bizarre, a mere anecdote that isn't a sound basis for policy. Their sage perspective will likely be amplified by powerful interests who now profit from medical debt. Businessweek has been covering the medical debt industry in depth, and this week's installment newly demonstrates how eager financial interests are to advance "the transformation of medical bills into consumer debt:"
The pool of self-pay patients is mammoth: Some are among the nation's 47 million uninsured; others are among the 16 million whose plans offer scant coverage or have deductibles as high as $10,000. . . . .General Electric's powerful financial arm markets its CareCredit card to dentists, plastic surgeons, and some hospitals, with loan volume expected to hit $5 billion this year, up 40% from 2006. . . . "Everybody is saying [medical finance] is the next horizon—whether it is lines of credit or credit cards," says June St. John, a senior vice-president at Wachovia. . . .
Before anyone discounts the disasters of people like Mr. Olaya as "mere anecdotes," they might wish to consider whether a health care system that piles massive debt onto the tragic death of a family member really reflects American values. Regardless of anecdotes' attention-grabbing power, it's likely that whatever impact this one makes will be a drop in the bucket compared to the special interest money thrown off by the current system's inequities.
Below the fold: a hidden TILA issue?:
At Spectrum Health, a nonprofit group of seven hospitals in Grand Rapids, Mich., self-pay patients who can write a check within 30 days receive a 20% discount; those who pay within six months get 10% off. Patients who charge their debts to CarePayment get no discount. Referring to CarePayment, Kathleen Engel, an associate professor at Cleveland-Marshall College of Law, asserts: "This is a markup, not a markdown." Engel, a consumer law expert, says that because hospitals effectively charge more when patients use CarePayment, the hospitals should disclose the price difference as the equivalent of an interest rate under the federal Truth in Lending Act.
Joseph Fifer, Spectrum's vice-president of finance, said its disclosure is legally sufficient. Steven M. Wright, Aequitas' senior managing director for health markets, agreed. Wright said Aequitas complies with the law by disclosing its payment terms when it sends CarePayment charge cards to new customers.
I guess so long as it's all disclosed, they may as well open payday lending branches in ERs. But here's a last word from the chief financial officer of Methodist Le Bonheur Healthcare:
"If we heal somebody medically, but we break them financially, have we really done what is in the best interest of the patient?"
Posted by Frank Pasquale at November 25, 2007 09:22 PM
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Comments
Mr. Olaya, 21, is struggling with $255,000 of medical bills incurred by his mother before she died...
Last time I checked, issue are not liable for the debts of a decedent.
Of course, you conveniently omitted the next sentence in the article, which tells us that the creditors are pursuing the estate, not "struggling" Mr. Beneficiary.
Or am I being a mere anecdote here?
Posted by: KipEsquire at November 25, 2007 11:01 PM
I feel bad for this person, but not that bad. She should have purchased short-term health insurance through COBRA, E-health insurance, or one of the many other short term insurers. By not purchasing that health insurance, she took a risk. That risk ended up materializing, and it hurt her financially. That's the way things are supposed to work.
One might argue that poor people can't afford short-term health insurance. But is this true? The article mentions that the son is selling the mom's house to pay the $255K. So we know that her house is worth at least $255K. Even if she had no other money (which is doubtful), she could take a loan out against the house. So clearly she could have paid for the short term health insurance.
Thus, the redistributive argument needs to be tempered. We cannot argue that taxpayers should foot the bill here because she could not have paid for the insurance. Instead, we can only argue that taxpayers should foot the bill here because she may have had to have taken a loan against her house to pay for the insurance. This is a much weaker argument. Many taxpayers don't have a house; why should they be required to subsidize someone who does?
Also, keep in mind that if this woman were truly poor, she would qualify for Medicaid.
The real argument that you're making here is that rich people should give money to lower middle class people. Maybe there's a good reason for that, but if that's your argument, just make it directly, please.
Posted by: jhkjhkjh at November 26, 2007 12:03 AM
jhkjhkjh: You make a huge leap here. You assume that because the article says, "To pay the bills, he is selling the Maryland home where he lived with [her]," it means that the net price of the home will cover the entirety of the bills.
All read here is selling a home -- a symbol of stability and family -- as a very large, solid example of just one of the sacrifices that must be made.
Posted by: John Armstrong at November 26, 2007 12:23 AM
Hello,
The following youtube video is of Senator Dick Durbin speaking of me on the floor.
http://www.youtube.com/watch?v=mic2IeEUFfc
jhkjhkjh: The video will answer your position on the topic.
S.O.
Posted by: s.o. at November 27, 2007 12:32 AM
More information on the topic as spoken on the senate floor.... this might clear up some things
http://www.youtube.com/watch?v=mic2IeEUFfc
Posted by: s.olaya at November 27, 2007 02:09 AM
