Would the Senate healthcare bill have helped Obama’s mother?
Back in the day, Candidate Obama told a touching story about his mother’s struggle to pay her medical bills while battling cancer. Obama’s mother, Ann Dunham, died of ovarian cancer at the age of 53, an event Obama said in part inspired him to tackle healthcare reform.
But what kind of coverage would Dunham receive today under the Senate bill as it stands right now?
In this experiment, Dunham is still 50-years-old (her age in 1992 when she received her Ph.D. from the University of Hawaii). She is the single mother of two grown children, so she no longer has dependents. In this model, she has just been diagnosed with ovarian cancer.
She is employed as an anthropologist with USAID, the United States federal government organization responsible for most non-military foreign aid. In 1999, the federal government starting annual salaries for anthropologists were $37,744 for persons with a Ph.D., so for the sake of this experiment, I’m going to assume that she earns an annual salary of $37,744.
(Dunham may have been working with USAID to supplement her income– a common practice for anthropologists– but for the sake of this example, this is her total income. I know this model income will be an area of contention. On the one hand, a Ph.D.-holder earns much more than an average worker. However, Dunham worked as a consultant in non-military foreign aid, hardly a position of great power in a booming market. Nonetheless, I address the possibility that she earned much more than $37k later.)
I’m taking the estimates of her healthcare costs from the CBO’s report on premiums for people at different income levels. A single person like Dunham earning an income of $38,300 ($37,744 isn’t an option on the CBO chart,) would pay $3,900 (healthy years) up to $5,800 (sick years) in premiums, and could expect to pay $1,900 in out-of-pocket expenses. The government would cover 25% of Dunham’s premium.
(Here is a point of disagreement for Progressives: Nate Silver calls these figures “affordable,” while RJ Eskow thinks they’re “harsh.” Most Progressives appear to agree that cost subsidies need to be improved. Personally, I make less than Model Dunham, and consider the base premium, $3,900, a hefty chunk of change.)
If Dunham did manage to land a sweet-ass $50,100+/yr anthropological gig, she would not receive government assistance, she would pay between $5,200 and $7,100 in premiums, and $1,900 in out-of-pocket expenses, according to the same CBO report. (Note: the $26,500-$50,100 income range pay the exact same OPE: $1,900. Just sayin’.)
So for this experiment, Model Dunham is thoroughly middle class and would certainly have to purchase some kind of insurance, since the Senate Democrats dropped plans to expand Medicare, and mandates all Americans purchase private insurance, or pay a punitive fine. Purchasing healthcare on the private market would ordinarily be expensive, but Dunham has the added burden of having ovarian cancer, quite the costly disease.
President Obama has previously talked about how his mother was worried about the mounting medical bills at a time when she was in tremendous pain. She needed her energy to fight cancer, and yet all she could focus on was how she was going to cover her enormous medical expenses. Like millions of Americans, Dunham was PeC’d (Preexisting Condition) by the insurance companies, Obama explained in a town-hall-style session at the AARP’s Washington headquarters:
My mother, when she contracted cancer, the insurance companies started suggesting that, well, maybe this was a preexisting condition. Maybe you could have diagnosed it before you actually purchased your insurance.
Ultimately, they gave in…but she had to spend weeks fighting with insurance companies while she’s in the hospital bed, writing letters back and forth just to get coverage for insurance that she had already paid premiums on. And that happens all across the country. We are going to put a stop to that.
The Dunham in our modern example, covered under the Senate healthcare bill, could not be turned down for a preexisting condition like ovarian cancer, nor could she be dropped if she developed ovarian cancer while already insured.
However, according to the Washington Post’s David S. Hilzenrath, insurers would not be prohibited from using Dunham’s health status against her until 2014. In the meantime, they could continue to deny her coverage or charge her higher premiums. As Ezra Klein points out, there will be some interim help for people who have preexisting conditions, though the bill does not instantly ban discrimination on preexisting conditions.
Meanwhile, the insurance exchanges don’t open open until 2014, and Americans who are denied coverage because of a pre-existing condition will have to participate in a national high-risk pool, a program that is susceptible to its own fiscal limitations. The proposal would permit the HHS secretary to stop accepting applications for the pool once it has exhausted the $5 billion the proposal would appropriate for the program and premiums no longer cover claims. The Congressional Budget Office estimates that this would happen in mid-2011, reports Daniel Esquibel, California Healthline Managing Editor.
Additionally, opponents like Howard Dean claim the legislation “allows insurance companies to charge older Americans up to three times as much as younger Americans, pricing them out of coverage.”
The House-passed bill allows age-rating at a 2-to-1 ratio, which means an elderly person could be charged twice what a 20-year-old normally pays. The bill in the Senate would set the ratio at 3 to 1. Insurers may agree to cover everyone, but they could also charge a lot of money to cover older people, who are more likely to get sick. Model Dunham may have to pay much more for coverage simply because of her age.
Donna Smith, legislative advocate for the California Nurses Association, says age-rating will “leave a lot of people exposed by buying only those policies they can afford…So they can still be driven to foreclosure and bankruptcy.”
There is also some concern that so-called consumer protections like the “no annual or lifetime caps on coverage” are just pretty, empty rhetoric. The AP reports that the Senate bill calls for annual limits on the dollar value of medical care as long as those limits are not “unreasonable.” Whatever that means. Maybe they’ll pay to fix the right ovary, but not the left one? (The White House has since claimed they will help close the loophole in the Senate bill if you are inclined to take their word on that.)
Harry Reid’s chief spokesman, Jim Manley, claims that there was concern banning all annual limits could lead to higher premiums, an explanation that seriously underwhelms veteran healthcare and consumer issues journalist, Trudy Lieberman:
Sounds to me like the bill reflects the handiwork of the insurance industry on this point. It would be interesting to know what the White House has to say. After all, it was the president who took to the airwaves last summer to promote his consumer protections. What does the president think now? Does he side with insurers or with consumers?
If the loophole remains, the Dunham in our example had better pray the costs of her ovarian cancer treatment don’t exceed her annual limits (some chemotherapy drugs like Folotyn cost $30,000 a month, which would almost eat up Dunham’s entire salary).
Insurance limits are especially devastating for cancer patients, who quickly amass huge medical bills due to expensive treatments. Take this example from a 2009 Kaiser Family Foundation report:
Doctors diagnosed Jamie Drzewicki with breast cancer in November 2006 . Jamie, 58, had a partial mastectomy followed by radiation and chemotherapy treatments . She experiences side effects from her cancer treatment, including swelling, pain in her arm, intestinal distress, and a damaged larynx from the radiation . She continues taking medication .
In April 2007 Jamie’s insurer informed her that she had reached the $100,000 annual limit on her policy, an employer-sponsored plan through her job as a director of activities at a nursing and rehabilitation center . As a result, she amassed about $75,000 in medical debt from her treatment. Collection agencies have been calling her regularly, sometimes as many as two to three times per night . Her hospital eventually forgave $40,000 of Jamie’s debt, but about $30,000 in debt remains.
$30,000 of debt is almost Model Dunham’s entire annual salary, a sum she could only hope to begin to pay if she could work full-time straight out of chemotherapy and rehabilitation, and even then, full repayment could take a decade. Even imagining an ideal world, where Dunham-like anthropologist consultants, who write their dissertations on peasant blacksmiths, earn $100,000/yr, these kinds of medical bills would still bankrupt a single woman who cannot work to keep a steady income, and has no spouse to rely upon. All she could hope for is that – ya’ know – her son becomes the President of the United States and pays for her medical bills.
It is not cancer victims like Model Dunham, but rather the insurance and pharmaceutical industries, that are the clear winners of healthcare reform. Dunham would not be permitted to buy cheap cancer treatment drugs from Canada or Europe, reform that would have cost Big Pharma billions in lost revenue. Now, 30 million Americans will get health insurance subsidies from the government to purchase private insurance and expensive drugs. It’s a bonanza for all the right private industries.
Were she alive today and newly diagnosed with cancer, Dunham would be able to get some coverage under the proposed Senate bill as it stands right now. However, she would have to wait five years for the guarantee that she would not be discriminated against for committing the “crime” of getting cancer (promises that could easily be terminated in 2010 or 2012).
The government would cover a quarter of Dunham’s premium, though she would pay $3,900 – $5,800 in premiums, and $1,900 in out-of-pocket expenses. However, if these annual caps remain, she could quickly hit her annual limit and find herself in the uninsured wilderness yet again.
Progressives should tell President Obama to remember the struggle of his late mother and pressure Democrats not to allow arbitrary “annual limits” to remain in the final Senate bill. No cancer victim should ever be told his or her suffering costs too much.