Down the Insurance Rabbit Hole

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Forum topic by Dan'um Style posted 05-01-2012 03:06 AM 2156 views 0 times favorited 34 replies Add to Favorites Watch
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Dan'um Style

14167 posts in 3402 days

05-01-2012 03:06 AM

Topic tags/keywords: resource

Read the article and now you can too if you want. Good topic.

Down the Insurance Rabbit Hole
Published: April 4, 2012

Cambridge, Mass.

Vivienne Flesher

Related in Opinion

Op-Ed Contributor: Toward Universal Health Coverage (April 6, 2012)
More on Health Care »

ON the second day of oral arguments over the Affordable Care Act, Solicitor General Donald B. Verrilli Jr., trying to explain what sets health care apart, told the Supreme Court, “This is a market in which you may be healthy one day and you may be a very unhealthy participant in that market the next day.” Justice Antonin Scalia subsequently expressed skepticism about forcing the young to buy insurance: “When they think they have a substantial risk of incurring high medical bills, they’ll buy insurance, like the rest of us.”

May the justices please meet my sister-in-law. On Feb. 8, she was a healthy 32-year-old, who was seven and a half months pregnant with her first baby. On Feb. 9, she was a quadriplegic, paralyzed from the chest down by a car accident that damaged her spine. Miraculously, the baby, born by emergency C-section, is healthy.

Were the Obama health care reforms already in place, my brother and sister-in-law’s situation — insurance-wise and financially — would be far less dire. My brother’s small employer — he is the manager of a metal-fabrication shop — does not offer health insurance, which was too expensive for them to buy on their own. Fortunately, my sister-in-law had enrolled in the Access for Infants and Mothers program, California’s insurance plan for middle-income pregnant women. AIM coverage extends 60 days postpartum and paid for her stay in intensive care and early rehabilitation.

But when the 60 days is up next week, the family will fall through the welfare medicine rabbit hole. As a scholar of social policy at M.I.T., I teach students how the system works. Now I am learning, in real time.

For health coverage, the baby fares best. He is insured through Healthy Families, California’s version of the Children’s Health Insurance Program, the federal-state plan for lower-income children ineligible for Medicaid whose families cannot afford private insurance. California is relatively generous, with eligibility extending up to 250 percent of the federal poverty level of $19,090 for a family of three; 27 states have lower limits.

When the AIM coverage expires, my sister-in-law will be covered by Medi-Cal, California’s version of Medicaid, because she is disabled and has limited income. But because my brother works, they are subject to cost-sharing: they pay the first $1,100 of her health costs each month. Paying $1,100 leaves them with a monthly income of just 133 percent of the federal poverty level. If my brother makes more money, their share of the cost increases.

They must also meet the Medi-Cal asset test: beyond their house and one vehicle, they can hold $3,150 in total assets, a limit last adjusted in 1989. They cannot save for retirement (retirement plans are not exempt from the asset test in California, as they are in some states). They cannot save for college (California is not among the states that have exempted 529 college savings plans from their asset tests). They cannot establish an emergency fund. Family members like me cannot give them financial help, at least not officially. If either of them receives an inheritance, it will go to Medi-Cal. Medi-Cal services that my sister-in-law uses after age 55 will be added to a tab that she will rack up over the rest of her life. When she and my brother die, the state will put a lien on their estate; their child may inherit nothing. Even my brother’s hobby runs afoul of the asset test: he enjoys working on old cars, which he can no longer keep.

These are the limitations under which 7.5 million Medi-Cal recipients live. Nationwide, more than 50 million people are covered by their states’ version of Medicaid. Some states are more lenient in their income and asset tests, others less so. Nowhere is life in these programs a picnic.

That said, Medicaid is an important safety net for the poor, and the Obama reform would expand the program to cover all Americans under 133 percent of the poverty level (currently one has to be both poor and categorically eligible — a child or a pregnant woman, for example). But for the middle class who are thrust into Medicaid by circumstance, the program’s strictures are truly life-altering. My brother and sister-in-law desperately wanted to buy insurance and now wonder how to escape Medi-Cal’s forced penury. My sister-in-law will qualify for Medicare after the mandatory 24-month waiting period for disabled people, but Medi-Cal will be the secondary payer.

Their best hope is the survival of the Obama reform. Perhaps my brother can get a job that offers health insurance for the family, but without the reform’s protections, like the prohibition on denying coverage for pre-existing conditions, removal of annual and lifetime insurance caps, and reinsurance for large claims, there is no guarantee that they could obtain insurance. More likely, they would buy insurance on a health exchange. Here in Massachusetts, where such an exchange is in place, they could have purchased a plan with an affordable premium (at their income level, the monthly premiums range from $39 to $91 per adult). And these money and insurance issues would not have added to the other stresses in their profoundly changed lives.

Instead, their financial future is shattered. Family and friends are raising money to buy a wheelchair van and to renovate their home for accessibility. The generosity of the local community is stunning. One incident in particular struck me to the core. A woman from a small community nearby had something for us. A cancer survivor, she had decided to “give back” by placing donation cans in stores around town. She had finished her drive and consolidated the money. The small coffee can she handed over to me and my sister-in-law had a slit in the lid and was decorated with pink felt and ribbons, now a little smudged from handling. Inside were several hundred dollars in small bills. We burst into tears. This is social policy in the richest nation in the history of the world.

Andrea Louise Campbell is an associate professor of political science at the Massachusetts Institute of Technology.
A version of this op-ed appeared in print on April 5, 2012, on page A23 of the New York edition with the headline: Down the Insurance Rabbit Hole.

-- keeping myself entertained ... Humor and fun lubricate the brain

34 replies so far

View Mark Shymanski's profile

Mark Shymanski

5300 posts in 3132 days

#1 posted 05-01-2012 03:52 AM

That is horrifying. I really do not understand your health business system there. ...I’m speechless and despair for her and all like her and her family…

-- "Checking for square? What madness is this! The cabinet is square because I will it to be so!" Jeremy Greiner LJ Topic#20953 2011 Feb 2

View derosa's profile


1568 posts in 2255 days

#2 posted 05-01-2012 05:24 AM

Sucks when it hits home and you get to see the results of a system that doesn’t care about people. I went 16 years without insurance and thankfully the worst I got was a compound fracture in one arm, I couldn’t afford to go to the hospital and so after several months of it slowly healing on its own I regained full mobility in the arm but if I sleep on it or hold it certain ways for a little too long the pain still shows up in that spot. When my wife was ready to get pregnant we bought her health insurance due to the possibility of something happening, cost almost 600.00 a month and financially hurt us. My wife didn’t work towards the end, her contract ended and wasn’t extended since it was known we were looking for our permanent position in the ministry. At the same time my hours were soon cut back and in the month between when we accepted our job offer and when we could take my hours were completely removed. We scraped together enough to keep paying the insurance, auto, and food and everything else we were still trying to get ahead of a year later. In the end we broke even because nothing went wrong.
Now I have an amazing insurance policy, no payments for my daughter’s care for the first 3million in care. I’d trade all the insurance I have for a socialized system that offers care to all who need it without bankrupting them.

-- --Rev. Russ in NY-- A posse ad esse

View DrDirt's profile


4135 posts in 3162 days

#3 posted 05-01-2012 02:31 PM

A question I have is…is the problem with health care costs….the insurance company?
There are plenty of horror stories about denial/pre-existing conditions/ dropping the sick.
—> The Profits are not huge – so the increases in the graph are not due to premiums – but rather PAYING OUT ON CLAIMS. Why did actual cost of CARE go up a factor of 10 (1000%) in 20 years?

Who generates the 2.5 trillion in actual medical bills? the top three insurers all spend 81-83% of their premiums on claims…so basically they have always been on the 80:20 Rule…... so how did the 80% piece get so huge?

Profits -
•Aetna: 3.7%
•Wellpoint: 7.3%
•Cigna: 7.1%
•United Health: 3.7%
•Humana: 3.4%
•Healthnet: -0.3%
•Healthspring: 5.0%
•Coventry Health Care: 2.3%
•Molina Healthcare:0.8%
•United American Corp: 2.7%
•Unum Group: 8.4%
•Median: 3.7%

-- 'Political correctness is fascism pretending to be manners' ~George Carlin

View poopiekat's profile


4188 posts in 3154 days

#4 posted 05-01-2012 03:00 PM

As an American living in Canada, I’m often under attack about the status of healthcare in the U.S. ll I can say, in one generic sweep, is ‘Hey, you wouldn’t think of driving without insurance, right?” To maintain your health insurance is just one of those necessary evils. Everyone’s lifestyle is somewhat dictated by what you do to provide coverage for you and your family. If that means opting for the job that provides the optimum insurance benefits , then so be it. For the government to subsidize irresponsibility on the part of the wilfully uninsured…well…I suppose. but when I was laid off, I took on a BC/BS policy with a $5000 deductible… just in case of a catastrophic event, just to protect my Real Estate assets. Fortunately my heart attack event occurred once I was again insured by an employer, $62,000 worth of care, everything covered except for one ambulance shuttle between hospitals, $500. To have socialized health insurance is indeed the utmost benevolent program that a government can give its people. But it’s not to say that we don’t pay for it, because we do. Instead of tri-monthly premiums, we pay through taxation. Some give a little, some give a lot. The California model is indeed terrifying, however. It’s just got to be the worst of both worlds. Though I understand that the Federal gov’t screwed California over badly by mandating healthcare for illegals for many years.

-- Einstein: "The intuitive mind is a sacred gift, and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift." I'm Poopiekat!!

View DaveMu's profile


56 posts in 1754 days

#5 posted 05-01-2012 06:46 PM

Interesting read thank you!

View patcollins's profile


1419 posts in 2285 days

#6 posted 05-01-2012 08:58 PM

I for one would like to know how much that the manager of the metal fabrication shop made. This would tell me what “couldn’t afford” means. To some people “can’t afford” means “there are things I’d rather spend my money on”.

This story is terrible, however there is so much social engineering going on with stories like these where certian facts are omitted to trigger a certian emotional response.

The affordable health care act would have fined this couple had they chose not to buy insurance btw.

What does California consider “middle income”?

Update: I took the cost sharing amount and the federal poverty level poverty level and came up with approximately $33k/year. Not sure I would consider that middle income for California.

View RockyTopScott's profile


1184 posts in 2898 days

#7 posted 05-01-2012 10:31 PM

The cost of health care and health insurance are driven by many factors which i have 30+ years experience with, but an explanation would bore this forum to death.

A big snoozer.

-- “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” ― Thomas Sowell

View jeepturner's profile


939 posts in 2212 days

#8 posted 05-01-2012 11:27 PM

I would say only in America, but that would be wrong. I should be only in the United States, but we have some lovely company when it comes to a system where anyone at anytime can lose the health care lottery. Most of the countries in the third world share this system. In our country where everything is biased towards how much one makes, losing your economic freedom to earn more takes an even higher toll. The truly sad part is that this story is not unique. It happens everyday. And what is also even sadder is it only took six post before someone started blaming the sick for their condition.

I would doubt that health care insurers would give out unbiased information, freely. So basing profit margins off of what amounts to company propaganda means nothing. They are corporations and they do have certain requirements for publishing, but to think they don’t try to game the system is naive.

-- Mel,

View RockyTopScott's profile


1184 posts in 2898 days

#9 posted 05-02-2012 12:09 AM

This will help explain alot of the problems from a less than conservative site.

The key of the article: “If Americans behaved just a little differently, our health care costs could settle down to a sustainable growth rate that matches the economy’s growth, or could even fall further. “

-- “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” ― Thomas Sowell

View RockyTopScott's profile


1184 posts in 2898 days

#10 posted 05-02-2012 12:28 AM

@jeepturner said : “but to think they don’t try to game the system is naive.”

Care to give us an example?

-- “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” ― Thomas Sowell

View jeepturner's profile


939 posts in 2212 days

#11 posted 05-02-2012 02:08 AM

@RTS or celebrity du jour thumbnail. Why would I want to provide information to you. Would it change your mind? Would you consider looking at the world from a different point of view? Or would you play semantics with words to keep from considering any view point but your own.
(Best Darth Vader voice) “Confirmation bias runs deep in this one”
Come on go a head and bore us with all the details a man with 30 + years experience knows.

-- Mel,

View RockyTopScott's profile


1184 posts in 2898 days

#12 posted 05-02-2012 02:21 AM

No, what I would do is guide you to the correct answer based on my time spent in this market.

I think it is you that may fear the facts that might confuse your bias.

The only bias I have is I do believe in profit, which is always a good thing.

-- “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” ― Thomas Sowell

View Rick M.'s profile

Rick M.

7697 posts in 1800 days

#13 posted 05-02-2012 06:49 AM

•Aetna: 3.7%

Which equated to over $10,500,000,000.
The CEO, Ronald Williams, was payed over $72,000,000
Aetna also overstated it’s losses by around $4,900,000,000 and had to file amended returns

Also, linked from the link you posted:

Profit is a deceptive measure when used with insurance, because the amount of money that flows through insurance companies is vastly disproportionate to the work they do or the value they add, just by the nature of the business. To put it more simply: private insurance companies’ “costs” are probably about half of all the healthcare spending in America, since that’s the proportion they cover. And their revenues are somewhat higher than that (currently about 4.3% higher, according to Yahoo business). But it’s not as if they’re actually doing half the work in America’s health-care system; they’re just collecting premiums and paying bills, plus a lot of administration and advertising.


View RockyTopScott's profile


1184 posts in 2898 days

#14 posted 05-02-2012 10:35 AM

Yes, the folks at ABC and Ezra Klein, now those are unbiased opinions I am sure.

Pick up a copy of Aetna’s audited financials and tell me what page the deceptions are on.

-- “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” ― Thomas Sowell

View jeepturner's profile


939 posts in 2212 days

#15 posted 05-03-2012 12:05 AM

“The only bias I have is I do believe in profit, which is always a good thing.”
So, when a drug deal(read ground floor entrepreneur) makes a drug deal he makes a profit. Always a good thing?
When a trader in white slaves sells a “house mate” in a third world country he makes a profit. Always a good thing?
When an insurance company accepts money for a service and then finds a legal loop hole the company makes a profit.
Always a good thing.
When the largest GDP in the world spends sixteen percent of that GDP on health care and a good chunk of that goes to companies who do nothing to treat the misery of the folks who are forced to buy into the system, and they make a profit everyday on it. Always a good deal. We spend more because of the insurance industry. Our system allows folks to make a profit while producing no product, and that system feeds on misery. Always a good thing? More misery equals more profit.

-- Mel,

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