Americans Speak on Health Reform: Report on Health Care Community Discussions

III. Concerns About the U.S. Health Care System

B. Cost Concerns

Individuals and businesses from Maine to California expressed dread when considering the question of the cost of health care, health insurance, and the system. As a group in Kirksville, Missouri, explained, "The cost of health care continues to spiral out of control. To be available, care must be affordable. If other countries are providing excellent universal health care for less than half of what we spend per capita, something is wrong." Health Care Community Discussions highlighted how the rising cost of insurance premiums and deductibles, the cost of health care services with or without insurance, and the cost of prescription drugs can all overwhelm a family and stifle a business. Among group reports that focused on the cost of health care, 28 percent focused on health insurance premiums with another 28 percent worried about the overall cost of the system. How much individuals and families pay for health care was a topic of discussion in one-fourth of the cost discussions; prescription drug costs were mentioned in 21 percent of such reports. Additionally, many of these reports conveyed the frustration of Americans who believe that they spend significant financial resources on an opaque and inefficiently administered health care delivery system (16%) (see Figure 4).

Cost to Individuals

According to a number of Health Care Community Discussion reports, the rising cost of health insurance is driving down coverage, leaving people uninsured, preventing access to care, and creating financial hardship. Numerous groups discussed how participants are unable to obtain group insurance rates and face prohibitive costs for private individual insurance; yet, at the same time, such individuals are disqualified from government aid by Medicare's age requirements and Medicaid's low-income threshold. A self-employed yardman from San Antonio, Texas, offered his story as an example of how rising costs and high premiums place coverage out of reach for many Americans, leaving people uninsured. He stated, "I work very hard but there is no way I can buy insurance for my family. My wife has severe rheumatoid arthritis and has had to many times go without treatments because I cannot pay for health insurance. She is too sick to be able to work. With her so sick, it makes it very expensive to buy any health insurance. What is a working man supposed to do?" A Lawrence, Kansas Health Care Community Discussion at a university discussed that "a whole class of people, the 'near poor,' don't qualify for public programs, but don't have employer-based coverage and can't afford other coverage."

The Health Care Community Discussions also included input from farmers who cannot afford the cost of individual insurance. Nineteen people, including some farmers, traveled over icy roads and braved a wind chill factor of 23 degrees below zero to discuss health care at a Green Bay, Wisconsin, convention center. They reported that people are "[sending their] spouse to work in order to have coverage: this makes the family farm very hard to manage with one spouse gone." A report from Enid, Oklahoma, contained a farmer's testimonial, "I receive SSDI [Social Security Disability Insurance] for several disabilities. I have worked hard all my life as a farmer and in the energy sector. I have spent my life's savings on [health care] and now I am refused care at our local hospital because I cannot pay. I may have to file bankruptcy due to this. But, I am told by DHS [Department of Human Services] I make too much money for Medicaid and have to wait 2 years for Medicare."

Numerous groups discussed the financial hardships they endured as a result of insurance costs and high premiums. In North Carolina, a group of providers and community leaders organized a Health Care Community Discussion at an office in Raleigh. A doctor who participated in this group elaborated, "I have a patient, a minister of a local church for over 25 years. When he developed diabetes and his wife had chronic back pain, he was unable to afford insurance despite having paid into it for all those years. By state law, [his insurance company] had to cover him, but the premium cost for him and his wife was almost $4,000 a month." A group from St. Joseph, Missouri, sent in a story of a participant: "Most of us are getting our letters from our insurance companies saying our unaffordable health care premiums are going up – Happy New Year! It happens every January without fail. My husband and I can lower our monthly bill if we would like to select the $7,500.00 deductible. We are a total self pay premium." A self-employed couple from New York City shared their experience with health insurance costs, "We are middle-aged – [he] is in his 50s and I'm in my 40s so we are a long way off from Medicare! ... Health insurance and Housing costs are now on par. Even worse: Our cost for coverage is just for two people (no kids) and does NOT include any kind of coverage for drugs. So if one of us gets into a situation with expensive drug treatment, it might very well take our life savings and our home."

Health Care Community Discussion participants who were between jobs or unemployed also described their own problems with insurance costs. A participant at an Asheville, North Carolina Health Care Community Discussion organized by a non-profit health organization shared his experience: "When I switched jobs, I had to buy family health insurance coverage on the private market for 6 months until I could buy into the plan at my new company. My monthly payment for a disaster plan (insurance with a $5,000 deductible) was more than my mortgage." People who lose their insurance when they lose their job can obtain coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA), which provides temporary continuation of health coverage at group rates for certain former employees, retirees, spouses, former spouses, and dependent children¹⁸. Yet, Health Care Community Discussion groups indicated the cost of COBRA has risen beyond the reach of those it intended to cover. For example, a group from the Bronx, New York, noted, "COBRA sounds like a good program. In reality though, if you lose your job and are unemployed, there is no way you can afford to pay for your health insurance under COBRA. Extending COBRA will solve nothing. Two of the youngest members of our group are unemployed and cannot afford any health insurance for their families. The cost of continuing the medical plan under COBRA is $18,000 a year." A second report from a group of Americans who live part-time in Loreto Bay (Baja, California Sur), Mexico, relayed the story of a participant doctor's daughter: "At the age of 26, my daughter, despite excellent diabetes control and care, found she could not buy a personal policy nor afford the COBRA coverage when she was between jobs. The personal policy was refused and the COBRA was over $1,000/ month. Luckily, she had no illness or accident during her uninsured time which could have cost her over $50,000 for one event, like the flu requiring intensive care time¹⁹."

The rising cost of insurance premiums has also affected retirees who have not yet qualified for Medicare. A Health Care Community Discussion in Yelm, Washington, passed on the story of one participant: "[She] retired early from a large company. The company provides a very good retiree health care plan with the company covering a significant percentage of the premium cost based on the retiree years of service. For the bills that [she] sees, the health care costs paid to providers have not increased in the past 2 years, but the premium costs have increased significantly...If the premium costs continue to increase at the current annual rate, it would eat up most of their retirement savings just to pay health insurance premiums before they qualify for Medicare. The rate of increase of insurance premiums is out of control and they feel powerless to correct the problem. If health care insurance premiums continue to increase at more than 50% per year, they are considering dropping the good retiree health care plan to become uninsured until they qualify for Medicare."

For many Health Care Community Discussion participants, the high cost of health insurance is just the first barrier to health care.

Cost of Services

Obtaining health insurance does not necessarily guarantee affordable health care, according to Health Care Community Discussion participants. A number of participants were "underinsured": they had some type of insurance but still spend a significant share of their income on health care. A group of everyday Americans from Ballard, Washington, reported, "Our self-employed veterinarian and his librarian wife paid $700.00/month (average) for catastrophic coverage. They had to pay for everything 'out of hospital.' Needless to say, they avoided visiting the doctor. When the wife had a[n] accident-injury walking her dog, their out of pocket expenses were over $12,000.00. If you include the cost of their insurance, in 2008 they spent more than 25% of their combined before tax income on health care costs. She did not get the recommended physical therapy until she became 65." Similarly, a participant at a Health Care Community Discussion in Greeley, Colorado, reported, "One thing I want to make very clear is that I have good insurance and still the bills are out of control. I am one of the lucky people because I had $40,000 in savings when this cancer started. My catastrophic limit is $5,000 per year out of pocket and co-pays and medications are not included in the limit. In the past 3 ½ years I have spent $38,000 out of pocket even with good insurance..." At a Health Care Community Discussion in West Memphis, Arkansas, a "retiree explains that they have to come out of retirement in order to afford health care services. They state [that] their insurance companies don't have a plan for retirees."

High health care costs, even for the insured, deterred some participants and their families and friends from seeking needed services. A group in San Antonio, Texas, shared the experience of a 26-year-old participant with a small child who needed to have his tonsils removed because of recurrent infections. They explained that "[the participant] has...health care through his work, but even with the insurance the cost of the surgery is $900 and he cannot afford to pay it. He has decided not to have the surgery." Many of the Health Care Community Discussion participants said that costs kept them away from needed preventive services. In Aptos, California, "an [older] woman reported that she cannot get [a] mammography as it costs several hundred dollars, even with a discount offered by a local hospital." A woman in Hawthorne, California, lost her four sisters to cancer and in an effort to find out her own cancer susceptibility, she paid $2,917 out of pocket for a genetic screening. Another woman in Hemet, California, described her frustration with test costs by pointing out, "Last year I had a couple of tests due to some pain that I was experiencing. Just the bladder test alone cost more than $3,000! This was just a simple diagnostic test done as an outpatient that took less than 45 minutes...Education and preventative health care are extremely important - but how can illness be determined if the tests are too expensive."

Health Care Community Discussion groups expressed a high level of concern for the uninsured who have to pay high health care costs with no insurance assistance and are forced to make difficult choices as a result. A gathering at a senior center in La Jolla, California, stated, "People who are uninsured pay a non-negotiated rate for health care services; this is often many times higher than the rate paid by insured patients. This situation presents an almost insurmountable burden for unemployed people with no coverage." A report submitted from a group in Fayetteville, North Carolina, described "a single mother of two children [who] remarked that her choice had become as basic as health insurance or food for her family." These basic decisions underscore the effects of health care costs and the hard economic times faced by many of the Health Care Community Discussion participants.

Cost of Prescription Drugs

According to the Health Care Community Discussion participants, the cost of prescription drugs can also create constant financial difficulty. Participants stated that these costs have drastically increased in recent years. Seventy-eight participants attended a Health Care Community Discussion at a New Hampshire public library and reported, "A daughter of a participant has multiple sclerosis and had her medication increase $1,700 to $2,200/month in over 2 years – a 29 percent increase." For others, "a bottle of insulin costs $100 for what used to be $20." Having insurance does not guarantee the ability to obtain drugs prescribed by the doctor. As one participant from a Discussion meeting held in Ashley, Pennsylvania, noted, "My insurance doesn't cover the $185 [for the] medication the doctor prescribed for me and there is no generic so I just don't take it. I can't afford it." The prescription drug coverage gap or "donut hole" in Medicare Part D emerged as a major theme from the Health Care Community Discussion reports. The donut hole is the Medicare drug coverage gap between what a policyholder has to pay and where insurance coverage stops – after the first $2,700 paid out, until expenses amount to over $4,000. A group of health care workers met in a dentist's office in Greensboro, North Carolina, where they reported the story of a 76 year-old woman who had to pay $900 out of pocket every thirty days just for her osteoporosis medicine during this donut hole period. According to Health Care Community Discussion participants, these prescription drug costs are prohibitive for many individuals.

Instead of foregoing medication, some Health Care Community Discussion attendees purchased drugs abroad. A participant from a Holly Park, California, gathering explained, "Insurance companies only paid for certain prescribed medications needed by my mother [a senior]. Some medicine was too expensive for her to pay and even for me to afford. We were forced to purchase cheaper drugs from Canada." A home care and hospice group in Connecticut hosted a Health Care Community Discussion for their members. A participant shared the story of her father on Medicare who could get the equivalent of a 3-month supply of a prescription drug in Canada for the price of a one-month supply of the same drug in Connecticut.

For other participants, the cost of drugs forced them to skip treatments to make prescriptions last longer or take half the dosage by cutting their pills in half. In rural Virginia, a participant in Abingdon talked about how his "93 year old mother has to choose which medications to take every other day in order to make the prescription last two months, instead of one. Even with using this strategy her medications easily consume over half of her 1,000 dollar monthly income." Another example arose at a Health Care Community Discussion group in San Diego, California. A participant talked about how her "husband had a serious, pre-existing heart condition and was also diabetic. They were unable to secure any kind of insurance for him, and the monthly cost for his care was too much for them to manage. Because of this, her husband was only taking half of the daily medications that his condition required."

Cost to Business

The Health Care Community Discussion groups made clear that the high cost of health care does not fall on individuals alone. In our employer-based health care system, American businesses shoulder a significant burden. Many participants felt this burden adversely affected small business and generally made American business uncompetitive. A member of a Health Care Community Discussion group from a Houston, Texas house forum described his family's experience: "My son-in-law and daughter currently live in Spain because that's where he can run his own small business. He had a business here in Houston, with three employees, young men. He insured them and it was cheap. But then he wanted to have a child, and the cost of insurance went through the roof. He couldn't afford it for himself, much less his three employees. So he moved to Spain, where they take it for granted that health care is a right. He took my two grandchildren with him. This shows how our system is hamstringing our business development. How can you go out on a limb and start a new business when health care is a noose around your neck?"

Throughout the group reports, small business owners echoed this concern. A physicians group sponsored a Health Care Community Discussion at a club in Gurnee, Illinois. At this forum, a small business owner described the effects of health care on his business by stating, "My small firm, an LLC with two partners, pays in excess of $1,500 per month for adequate health care. I think that this is high, and as I chat with other small business owners, they have similar concerns. This $18,000 that we pay each year prevents us from adding new software, using more part-time researchers, and other company expenditures that will inject money into the economy."

This high cost forced some small business owners who participated in Health Care Community Discussions to drop their health insurance benefits. At a gathering held by health department employees in Ottawa County, Michigan, a small business owner elaborated, "I am the owner of a small IT company...and employ...3 people - all of which are single parents - and one of them is my son. The cost of employee health care is so great that I cannot afford to provide anything. Quotes obtained from the local companies who provide 'deals'...are, in some cases, greater than the employees' bi-weekly take home pay. Other quotes that are affordable don't provide the coverage needed." A second business owner from a gathering comprised of a doctor's practice and its clients in Fort Wayne, Indiana "had premiums jump from $385 per month for three employees to more than $2,800 in four years. They were forced to drop coverage and have lost two key employees because of it." Many of the reports cited this tension between retaining coverage and workers due to the high cost of health care. A few participants also noted that costs affect large corporations in addition to small businesses. For example, a participant from a coffee shop gathering in Grapevine, Texas, described "the many disadvantages of the current employer-based health insurance system, including the fact that it is a major competitive disadvantage for American corporations and American workers whose jobs can be outsourced overseas."

System Costs

Although numerous groups focused on how they, as individuals or as a small business owner, coped with the cost of the health care delivery system in America, many participants also had comments about problems with the system as a whole and how it raised the cost of health care. Major themes that emerged from the Health Care Community Discussion reports included concerns over inefficient administration and frustration with the lack of transparency within the system.

Some Health Care Community Discussion participants felt that the administration of the health care system often has multiple actors performing duplicative services. At a community center in Petrolia, California, a retired provider commented, "The back and forth between medical providers and insurance companies is a colossal waste of money." A discussant at a house meeting in Lenoir City, Tennessee, reiterated this concern, "Currently we have too many levels of bureaucracy in the billing and delivery of health care. Each facility and patient is required to provide data to each insurance entity. Billing is redundant." A Health Care Community Discussion forum in Chicago, Illinois, reported, "The majority felt that the current health insurance system is too cumbersome with far too much money being spent on advertising, marketing, profits and administrative costs related to having to conform to non-standardized regulations, billing practices, and forms imposed by having to deal with such a large number of different insurance companies."

Health Care Community Discussions expressed general frustration about the lack of transparency within the health care system. Repeatedly, group reports highlighted that they did not understand the reason why everything from prescription drugs to insurance premiums to hospital band-aids cost so much and often expressed that they wanted more information on the specific basis for costs. A participant from Axtell, Texas, spent eight days in the hospital for the birth of her son and received "a confusing and unexpected bill" of $34,000. Often participants could not predict how much their health services would cost. A participant in a Health Care Community Discussion conference call in Maumee, Ohio, stated, "I think it's ridiculous that when I'm planning a surgery...like a hysterectomy, for example, I cannot call the doctor's office who will perform the surgery NOR the hospital where the surgery will be performed and find out exactly how much it will cost, what my insurance will pay, and what my cost will be AHEAD of time!"

A Health Care Community Discussion participant in a small group in Prescott, Arizona, shared her son's story, describing how "[when he] broke his collarbone...the hospital referred us to the orthopedist on call, and they said I had to see the one who was on call, but he didn't take my insurance. I found an orthopedist who did take my insurance, but he refused to see us because he was not on call that night. Then we kept getting bills from people we never heard of. We get bills for things we don't even know what they are for. My husband and I both work, and we had to borrow money from my parents to pay for my son's medical bill." Some groups noted that "Pay Now" signs at the doctor's office confused and threatened those who did not know if they could pay the cost.

Conclusion

Health Care Community Discussion participants concluded that the American health care system places an extraordinary cost on individual Americans and American business. The cost of insurance, the cost of drugs, and the cost of health care services directly affected many participants, forcing them to make difficult choices. Participants also reported that the system's lack of transparency and cumbersome administration raise the cost of services and heighten the stress and frustration associated with health care.