It was the ultimate nightmare for Rodney. Just a handful of weeks after losing his job — and benefits — his wife was found to have a potentially dangerous health condition that required costly testing. Fear gripped his household.
“The weekend before this happened, the wife and I sat around the table and debated whether we could afford to go to Walmart,” said Rodney, who asked that his last name be withheld. “When we got the news about my wife, I thought, “Oh no, there goes the house.”
The hospital that originally found the wife’s problem could not offer Rodney a payment plan, so the testing was done at another hospital that would work with them. Still, he wondered how he was going to afford the procedures even with the extension.
Then a godsend arrived in the mail. It was notification that Rodney qualified for the enhanced Consolidated Omnibus Budget Reconciliation Act (COBRA) offerings under the American Recovery and Reinvestment Act (ARRA). Since he had left his previous employer in good standing, Rodney was eligible for the 65 percent COBRA discount allowed under the ARRA. In a blink, Rodney and his wife had health benefits at a rate they could afford.
Rodney’s story is playing out across the state. The unemployed/uninsured are feeling the strain, especially those not eligible for the discounted COBRA coverage. And, the healthcare industry is suffering right along with them.
Sam Cameron, president and CEO of the Mississippi Hospital Association (MHA), said, “Our members are seeing an increase in uninsured patients in their emergency rooms. Some areas of the state are worse than others.”
Cameron said as the economy continues to struggle, he expects his members to see even more uninsured patients. This puts pressure on those who are insured as those costs are passed through, a cost-shifting to a pool that is getting smaller and smaller, Cameron noted.
Just as problematic, many are electing to forego healthcare because they have no health coverage. A national study conducted by the National Association of Insurance Commissioners (NAIC) late last year found 22 percent of those surveyed said they had reduced the number of times they seek healthcare as a result of the economy. More than 10 percent said they had cut back on the number of prescription drugs they take or the dosage of those medications to make the prescriptions last longer.
MHA has released numbers just as sobering. In May, MHA published results from a national survey that found uncompensated care reached $42.7 billion in 2008. The study, conducted by Milliman Inc., found that privately insured U.S. families last year subsidized uncompensated care through $1,017 in additional premiums — the aforementioned cost-shifting.
Insurance firms contacted for this story report no significant up-tick in those looking for individual medical coverage. Most of the recent-uninsureds seem to be taking advantage of the enhanced COBRA offering under ARRA.
“We are not see any appreciable increase,” said Kent Barrett, owner of Ridgeland-based The Employer Services Group, LLC, which offers individual/family and group health insurance. “Most are taking advantage of the 65 percent COBRA discount provided by the stimulus package.”
Barrett did say, however, that his firm is seeing some increase in those seeking individual coverage because they do not qualify for the ARRA-provided COBRA discount. But, the up-tick in traffic is not significant, he stressed.
Without the COBRA discount, buying individual health coverage can be quite affordable, according to a report from eHealth Inc. Last November, it released the results of a survey of more than 227,000 individual and family major medical policies purchased through eHealthInsurance and that were active in Aug. 2007. The average monthly premium for individual policies was $158, and the average family policy premium was $366.
However, price should not be the only consideration. Buying individual/family coverage is much different from employer-offered plans, says Mike Ramos with National Health Insurance Brokers. Homework is key.
“This is an issue because most people with group benefits typically don’t make benefit decisions or policy choice decisions, it is the company that does this,” Ramos said in a release. “So, often they don’t understand what comes into play when balancing insurance needs and coverage versus cost and insurer reliability.”