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Some sad stories from the US, where the inability
to pay medical costs is a major factor in personal bankruptcy.
Ed
American families are sick
to debt
this week's Supreme Court ruling opened a door to private health care in Canada. But the price could be steep. Studies indicate millions of Americans each year are affected by bankruptcies caused by spiralling medical bills, even if they have insurance.By ALAN FREEMAN, Globe and Mail
WYANDOTTE, MICH. -- Two weeks ago, Pamela Curtis got the
news she had been dreading for months: She and her 17-year-old son were being
forced out of the house she had owned for nine years.
For Ms. Curtis, a 47-year-old information technology worker from suburban Detroit, the spiral began two years ago. "In April of 2003, I suddenly lost the sight of my right eye. I went to work one night at Carhartt [a workwear-manufacturing firm] and I had, like, a black wall on the right side of my head. The doctor told me I had MS, cancer or a tumour. I was really scared." As a single parent and sole breadwinner, Ms. Curtis needed to keep working. As with most Americans, her health-care coverage was linked to her employment. Quitting work would be a double disaster. "I had days where my eyes were rolling and I had double vision, but I was forcing myself to go to work. . . . I didn't want to miss time and lose my job." A neurologist confirmed a diagnosis of multiple sclerosis. Then the bills started flooding in -- $35 a month for each of her nine prescriptions, $40 to $60 for each doctor's visit, $300 for an MRI, all over and above the health insurance that took $270 off her paycheque each month. (All figures U.S.) Last August, Ms. Curtis joined the ranks of the 1.6 million Americans who declare bankruptcy every year. For half of them, including Ms. Curtis, medical reasons are a significant factor in destroying their personal finances. The U.S. health-care system is in crisis. Costs are soaring. At least 45 million Americans go without any form of health insurance. And even for those who have insurance, high deductibles, growing co-pays (the percentage of costs borne by the patient) and astronomical drug costs are forcing increasing numbers of people into financial ruin. "Most of us are one serious illness away from bankruptcy," said David Himmelstein, an associate professor of medicine at Harvard University and co-author of a study released this year on how medical costs are forcing increasing numbers of Americans to file for bankruptcy. The study surveyed 1,771 personal bankruptcy filings in five U.S. states in 2001 and determined that in half the cases, medical causes, including health-care costs or loss of a job due to illness, were a significant factor. The researchers concluded that throughout the United States, as many as 2.2 million Americans, including filers and their dependents, are victims of medical bankruptcy every year. Far from being deadbeats, most of them are typical Americans with steady jobs and health coverage. "Over 75 per cent of all the people who filed for medical bankruptcy had insurance at the onset of their illness," said Deborah Thorne, a sociologist at Ohio University who worked on the study. "They're very solidly in the middle class. These are hard-working, determined people who are humiliated and ashamed. They are embarrassed even though they are filing [for bankruptcy] through no fault of their own. They feel angry because they have played by the rules and they still lose." When Ms. Curtis first filed for bankruptcy, she thought she could still keep her house. Then in November, she lost her job. "My health insurance ended on the day I got laid off. I thought it was going to go on for 30 days." Under U.S. law, she could continue coverage, but it was going to cost her $1,500 a month -- more than her unemployment-insurance benefits -- so she dropped it. With no insurance and no cash, Ms. Curtis stopped taking her medications, including Betaseron, the leading-edge drug for MS which costs $1,200 a month. She skipped doctor's appointments. "We didn't have a Christmas. My son is a little bitter. He's finding that life is pretty hard." With money short at home, he quit his final year of high school and began working at a pizzeria. Early in January, Ms. Curtis found a new job with health coverage. But it was too late to save her house. Losing health care when you get sick isn't unusual in the United States, according to Dr. Himmelstein. "About one-quarter of U.S. firms terminate health insurance immediately when you become disabled and are unable to perform your job." The costs of medical care can be onerous even when somebody is hit by what seems like a minor ailment. Dr. Himmelstein's daughter hurt her knee in a sports injury. Even with good coverage by the Harvard University insurance plan, the family faced $10,000 of physiotherapy expenses that was not covered. He could pay for it, but that's not the case for many Americans. "We're a two-doctor family. But if you're a working person, it can tip you over the edge," Dr. Himmelstein said. He acknowledged that Canada's universal health-care system faces major challenges -- he cites the chronic shortage of high-tech equipment such as MRIs -- but said it delivers good care to most of the population at a much lower cost than the U.S. system does. "We spend about twice as much as you do in Canada on health care," he said. And while the focus is on private care in the United States, government programs for the elderly, the poor and veterans account for a big chunk of total spending. "In fact, we spend more public funds per capita than you do on your health-care system." Figures released this week by the Organization for Economic Co-operation and Development showed that the United States continues to be the world champion in health-care spending. Per-capita U.S. spending, both public and private, was $5,635 in 2003, more than twice the average among the 30 OECD countries and well ahead of the $3,003 spent in Canada. Total health spending in the United States in 2003 accounted for 15 per cent of gross domestic product, while in Canada it accounted for 9.9 per cent. Yet life expectancy was higher in Canada and infant mortality was lower. And while health problems also play a role in Canadian bankruptcy filings, they account for only 7 to 14 per cent of the total, according to a study published in 2001. Still, not everyone agrees that the American system is in critical condition. Grace-Marie Turner, president of the Galen Institute, a think-tank that lobbies for private-sector solutions to America's health-care crisis, said Dr. Himmelstein's medical bankruptcy study was flawed. She argued that the sample picked by the researchers was not properly chosen and that by including medical expenses as low as $1,000 in defining a medically induced bankruptcy, the researchers distorted the figures. Ms. Turner said many foreigners are under the mistaken impression that Americans are denied health coverage when they get sick. In fact, U.S. hospitals are required by law to treat anyone who turns up at an emergency ward: "We don't have people bleeding in the streets." Ricky Beachboard hobbled down the hall of his spacious log home and returned with an old shoe box brimming with papers on which he had scrawled, in block letters: Broken Back Bills. "There's a collection agency that wants $177. I don't even know what it's for," he said, riffling through the stacks of receipts, statements and threatening letters. "There's a bill for $89.10 from Park Ridge Anesthesiology and $640 for a pain-relief drug from CVS Pharmacy." "They just keep on rolling in," said his wife, Vicky. Ricky, 46, and Vicky, 45, are high-school sweethearts who by dint of hard work built themselves a comfortable life outside Asheville, N.C. But a combination of bad luck, bad weather and, especially, bad health has pushed them to the brink of bankruptcy. In his 20s, Ricky began running a one-man sawmill. Vicky worked in a nearby factory. The couple had a baby and prospered. "We were doing pretty good," she said. "Building the house and doing the work ourselves allowed us to build up some equity." "On May 16, 2000, boom, our lives changed forever," Ricky recalls. He was doing renovation work and his back gave out. "It was like a jolt of electricity that went down the back of my leg, all the way down to my foot." The news from the MRI was bad. Ricky had severe degenerative-disc disease, bone spurring. scoliosis and arthritis. "All my discs were flattened. I was in excruciating pain and had numbness all the time. . . . Basically, my back was wore out." Simultaneously, their financial woes began. Vicky had health insurance through her manufacturing job, but there were severe limits on what it would pay for. Then Vicky began to experience her own neck and back problems, linked to the heavy machinery she was operating. She had expensive operations on her neck and leg. "I've got a titanium plate in my neck. They took out discs 6 and 7." With Ricky unable to work and Vicky forced to take unpaid medical leave, their income dried up. "Our credit cards are maxed out. We owe $35,000 on cards," he said. Last year, Vicky's plant closed and moved to Mexico. Retaining health insurance is costing the couple $819 a month, eating up most of Vicky's unemployment-insurance income. "We still owe $5,000 or $6,000 in doctor's bills. They call you eight or 10 times a day." Health and financial woes have taken a toll on their marriage and their emotional state. Ricky whispers that his wife is going through "menopause and depression" and that their sex life has disappeared. Clearly depressed himself, he hints at suicide. Adding to their troubles, a trio of devastating hurricanes last fall led to catastrophic flooding of their hillside property, wiping out Ricky's sawmill and leading to losses of $100,000. There's no insurance, and so far he has received no government disaster relief. Bentley Leonard, a lawyer who is advising the Beachboards, said he now handles seven to eight personal bankruptcies every week. "At least one-third of these cases relate to medical expenses," he said. "One guy came to see me this week. His bypass surgery cost $469,000," he said, pointing out that a 20-per-cent co-pay on that sort of bill would prove onerous for virtually anybody. "I don't know anybody who has 100-per-cent coverage any more." Even death doesn't mean liberation from medical costs, at least in North Carolina. As Mr. Leonard explains it, medical costs are considered a necessity of life, like food and shelter, so they are the joint responsibility of a married couple. "If you die, the debt has to be passed on to the surviving spouse." It was his wife's health that brought Edgar Osteen, wearing a white lab coat, to Mr. Leonard's office in a nondescript building near downtown Asheville. After 28 years as a technician in the rehabilitation department of a local hospital, Mr. Osteen was earning only $21,000 a year. Despite his low salary, Mr. Osteen, 61, managed to buy a house and raise two children, depending on the salary earned by his wife as a cook. Then she was hit with a variety of ailments, including a bad back, neuropathy, irritable-bowel syndrome and bipolar disorder. She quit her job and now collects a disability pension while helping to take care of her aging mother, who suffers from dementia and lives with the Osteens. "We went overnight from a double income to a single income," said Mr. Osteen, a slight man who admits his financial crisis has contributed to his own clinical depression. "The hospital bills were $7,000 here, $8,000 there, plus your physicians' fees, MRIs, colonoscopies and EGDs. Those injections on her spine can run from $800 to $1,200. Insurance will pay 80 per cent, but you have to pay 20 per cent. . . . You just get caught in this spiral. I was getting seven to 10 calls a day, everyone wanting money." Mr. Leonard studied Mr. Osteen's finances. His net pay was $645 every two weeks, barely enough to pay $755 a month in mortgage payments and $255 a month in car payments. He had $40,000 in other debts, including credit cards and unpaid medical bills. Bankruptcy looked like the only option. "When you get catastrophic health problems, it's like the drowning man reaching for the straw," Mr. Osteen sighs. "It breaks and you look for another straw and it breaks too." For people like Mr. Osteen, with low incomes, incomplete health coverage and a buildup of debt, there are few alternatives, according to Ms. Thorne, the Ohio sociologist. "Bankruptcy is pretty much the only social safety net that's left," she said. But that safety net has become seriously frayed. Shortly after the Harvard study appeared, Congress passed a new bankruptcy code, backed by the credit-card industry, that will make it harder and more expensive for people like Ms. Curtis, Mr. Beachboard and Mr. Osteen to erase their debts and make a fresh start. The paperwork will increase, more people will have to agree to pay back their debts and anybody who files will be forced to pay for credit-counselling sessions. "Counselling assumes they're in bankruptcy because they can't manage their bills," Ms. Thorne said. "But they wouldn't be there if it weren't for a job downsizing or a medical problem." Despite the extensive publicity generated by the study, Dr. Himmelstein said he has become bitter about the issue: When it comes to the human toll of medical costs, he said, America remains in denial. Alan Freeman is a correspondent in The Globe and Mail's Washington bureau. |
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