Are health insurance premiums really sending people into bankruptcy?

Factual Questions
1

This statement is posted on a presidential candidate’s web site:

I want to avoid a debate on the candidates themselves and just look at this statement.

Are a significant number of people really going bankruptcy trying to pay* insurance premiums*? I’ve heard of people going bankrupt trying to pay for medical care (liver transplant, etc.) especially by people who have no insurance. I’ve heard of people with no insurance because they can’t afford it. But bankruptcy? Or is this more political hyperbole?

2

I don’t buy this at all. When I worked for myself I paid $330/month for excellent insurance. Even after I turned 40 It went to $740 a month. That’s a lot, so I went to a hotel worked two shitfts 20 hours and got health insurance for for $25.00/paycheck. After 3 months I quit and took the cobra for which I paid $180.00/month for the next 18 months.

I also volunteer at a food kitchen I have never seen anyone there but a homeless person that coud not afford food, they just make poor choice. Like the unemployed man who spends his food stamps at Walgreens because it’s closer. He has no job, he could walk to a cheaper store, no he won’t. I walk to the cheaper store. Sometimes I make three trips, I am not doing anything anyway.

I see all these people come in with cellphones, I even heard one lady say her mother pays for a cell phone for her and her child. But wouldn’t give her money for food. If it’s true it’s a lousy Grandma. Paying $50+ month for a cell phone which isn’t a necessity while denying them food. I doubt this.

I see people with cable, air conditioners, eating out at resturants, computers, high speed internet, renting videos etc etc, but they can’t afford health insurance. This is the person Obama and Clinton are talking about.

True there are needy people and they do need help but once you remove the homeless, mentall ill and permenantly disabled, you get very few who are couldn’t afford health insurance.

I read in Forbes magazine 30% of all Californians who lack health insurance make over $50,000 year. In Illinois the candidate for governor said “People that make over $50,000 a year should be able to buy their own health insurance.” She right they should be but they aren’t. What happend our current governor went on TV and said “She wants to deny health insurance to kids.”

Ah if your mom is making $50,000 and refuses to buy health insurance because she want to rent videos and have computers, and etc etc, then it’s her fault, but tell the politicians that.

I’m sorry to rant, but I am so sick of people making horrible choices thinking that luxuries like cellphones and vacations and cable Tv are necessities then choosing to cry poor.

I remember when I couldn’t afford bus fare, I walked. It took me 90 minutes but I did it. So?

3

…in the snow…uphill…both directions…geez do you chase kids off your lawn too? :wink:

As for the OP, I believe most people would cancel their insurance (or do without) before going bankrupt; it’s the unanticipated, uninsured medical bills that getcha.

4

I must admit I am confused. I hear about people scared because their CORBA is going to run out-after paying $1000/mnth for it. Yet we have employees (admittedly young single guys), who make money by refusing the company health insurance, taking the payback the company offers to people who opt out, and buying individual policies. One possibility is families. While it might be OK for a single person to buy their own insurance, I doubt many families can afford it.

5

That’s what it was like for me at the last place I worked that offered insurance – for an individual, the health insurance was very reasonable, less than $100/month for darn good insurance that had a copay of $200 for any hospital visit, a $10 copay for any doctor visit, and a $5 copay for any prescription. For a married couple, it was more like $300. For an individual and one child, it was like $250. For a family, it was about $700. That was way, way more than we could afford at an $11/hour job. And this was back in 1999, so I’m sure policies haven’t gone down since then.

6

I was previously paying $550 a month for me, my wife, and my son who were all perfectly healthy at the time of the policy (2006). I think each of us had our own deductible too of $2000, meaning they wouldn’t even cover a penny until we reached $2000 on that person (and this is Blue Cross Blue Shield, not some no-name insurance). This came to about 25% of our income that year, and it was pretty rough considering it was almost as much as rent. After those two expenses and utilities there was not a lot left. Of course, after some of the surgeries my son required, I imagine he wouldn’t even be covered, and we’d have to pay out-of-pocket for medical bills on top of the $550 a month, which would have been tough.

But, we did make it and did not go bankrupt, but I owe this solely to the fact that my wife and I are able to live on almost nothing (we still enjoy little things, but won’t go blow $50 here and $100 there on frivolous items or nights out on the town, etc). A less-fiscally sound family would have a very tough time.

I’m now on an employee Blue Cross Blue Shield plan…basically I will never leave my job because I’ve seen what it’s like out there without employer insurance.

7

That’s me, I guess. I’m self employed and make a fair living, but in New York State it costs me between $7500 an $10000 a year for a family plan. Whether I can scrape that much together or not, it simply doesn’t make sense as part of my budget. I pay for doctors visits and prescriptions out of pocket, and it costs less than 10% of what I would pay for a little card in my wallet.

8

If you have a pre-existing condition (high blood pressure, asthma, diabetes) and have to COBRA for a while between jobs it’s pretty expensive BUT you don’t exactly have a choice. If you don’t maintain coverage then even when you DO have a job future insurers don’t have to insure you for those conditions. I think the exclusion period is 90 days in some cases, maybe it’s 6 months, I’m not sure.

We moved out of state when my husband was unemployed so we had to buy insurance on our own. IIRC the premium was $750/mo through BC/BS for our family of four.

9

The risk in letting your health insurance lapse is that you or your child could come up with a condition that renders you uninsurable. Sure, a healthy family can get coverage for a “mere” $7500 per year, but if you’ve got a child with leukemia or diabetes or you have a heart attack you have no chance to get insurance, and bills that make the $7500 per year look like a pittance.

edited to add What **fessie ** said.

10

Your rates can be raised for getting older, too. My Dad used to work for LA. At one point after retirement, Mom said something about being glad that the cost for continuing insurance had gone down to about $700/mo. for each of them. It had apparently been over $1,000/each, but the employee association had worked for a better deal.

One thing that helped is that Dad had gotten a series of promotions just before he retired so that in the last three years working, he was making nearly three times his previous base pay. They retired to an income that was fixed, but more than they had gotten used to spending, yet. I don’t know what folks on a standard fixed income did.

11

I’d guess that the number of people who declare bankruptcy due to medical expenses, even though they are insured, is probably greater than those declaring simply due to insurance premiums. From personal experience, there are plenty of people in the former category. The only people who might be in danger of the latter are those who, as noted above, can’t afford to let insurance lapse, even if they can’t afford the insurance either.

12

There were a few years recently that we had to buy our own insurance and the prices increased dramatically those three years.

The first year we were paying under 500/month and we each had a 1000 deductible. It didn’t cover any prescription drugs or preexisting conditions. The last year we were paying almost 1000/ month with 2000/ deductible per person and still no preexisting conditions or prescription drugs.

That is about the cost of our mortgage and property taxes.

We now have company supplied insurance that if my husband hadn’t gotten a written agreement of cost when he was hired would cost us almost 900/ month with 2000 deductible per person, no preexisting conditions for one year and no prescription drugs.

We have a problem in the US that people with access to affordable insurance don’t believe how expensive it can be for some people. I have a friend who thinks that there isn’t a health insurance problem, that there are enough jobs with good insurance for everyone.

One of my friends is paying 700/ month to the hospital for past expenses and they have insurance that costs 700/ month.

13

Typically (in my limited experience, anyway) the group plans that employers offer do cover pre-existing conditions, which is the huge benefit of being in a group plan.

14

Many do, but federal regulations let them exclude pre-existing conditions for 12 months (18 under some circumstances) for such group plans, and there aren’t such regulations to help individuals on private plans. Some states do override the federal guidelines, such as California, which limits the exclusion to 6 months maximum for group plans.

15

My experience in trying to find family insurance was the the biggest price modifier for my family was a maternity rider. Insurance with the maternity rider was about $400/mo more than without. (same policy in each case,e xcept the maternity bit)

Background: Wife’s COBRA insurance, carried after we had our first (and only) child, was about $600/mo for her and my daughter. I had lousy insurance through my employer (contract company). COBRA term was about to run out, and while I was looking for a new FTE position, it was getting close. Thankfully, my company converted me to FTE from contractor, and along with it came GREAT benefits, at far less cost than we were paying ourselves.

Even after all of this, I still maintain that insurance/health care is not a RIGHT. It’s a service, which somebody has to pay for… and it shouldn’t be the government. We were lucky to get employer paid insurance, but I was fully prepared to go without many of our luxuries to pay for insurance myself.

16

$50,000 a year doesn’t go very far in many areas of California. Just for a quick comparison, the average home price in Illinois last october was $259,031 (Up 3% in that year). In southern CA, the average is $415,000 and that is down 14% during 2007. You can’t compare the two using the same dollar amounts, it just doesn’t work.

17

By law, COBRA premiums can be no more than 102% of the premium the group paid for the plan while the employee was still being covered. This does include any portion paid by the employer, so it can seem like a larger increase. The rate charged will be the same amount that had been charged to the employer plus a 2% administrative charge.

18

Excuse me - I bought the air conditioner and computer years ago, and paid for six months of DSL before I lost my job, my income, and my health insurance. Then I’m told COBRA will be $875 a month when I haven’t got a paycheck. I’m sorry - my past prosperity now makes me look like a slacker of some sort to you? Perhaps I should sell everything I own to the local pawn shop so I can look deserving enough in your eyes?

No, I can’t afford health insurance because it costs more than rent and food combined on a monthly basis. I have to eat and put a roof over my head - I can’t eat health insurance and it won’t keep me warm in the winter.

19

Yes, but (at least in NY State) this law does not apply to small business policies.If the company employs less than 50 people the insurer is obligated to over continued coverage but can charge their going individual rate. My friends’ small business pays $420 a month for an individual policy, but the COBRA rate on the same policy is around $900 month.

20

The cutoff for COBRA is 20 employees. That may be the case for smaller business, but that is not COBRA.

Your example doesn’t sound right, NY law requires business of 19 or fewer employees to offer the same benefits as COBRA with the same 102% requirement.