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Friday, April 24, 2009

Few Uninsured Willing To Pay Full Cost For Coverage

Some people can't buy health insurance because they have a pre-existing medical condition. But for most of the nation's 47 million uninsured, cost is the big obstacle — especially if they don't work for a company that pays part of the premium. And even if they could find an affordable health plan, many are not used to building that cost into their monthly budget. Potential sticker shock is emerging as a key issue in the nation's debate over whether everybody should be covered.

A new national poll, conducted by NPR, the Kaiser Family Foundation and the Harvard School of Public Health, shows that what most uninsured people are willing to pay is a long way from what insurance really costs. Two out of three uninsured Americans say they'd be willing to pay no more than $100 a month for coverage. But, according to the Kaiser Family Foundation, the average individual health plan costs about $400 a month, and a family policy costs more than $1,000.

Ann Notzelman, 48, of Flemington, N.J., knows she can't get health insurance for $100 a month. But she says that's all she can afford on an annual income of less than $20,000. "Right now, I'm in between jobs," Notzelman says. "And that's mainly why I can't afford to dish out the money that they'd want, you know? Because the cheapest plan I think I've seen was somewhere like in the $300 range." Notzelman worries about her lack of coverage every day.

"Actually, I'm a little concerned with a lump that I have," she says. "I know, it's not good — because my mother had breast cancer — so that's why I'm a little concerned, you know?" Notzelman represents a big part of the problem Washington policymakers are grappling with when it comes to the uninsured. There's little doubt low-income people like her would need substantial subsidies under any plan for universal coverage.

But a more difficult issue is whether middle-class Americans will need subsidies to buy coverage if their companies don't pay a chunk of the premium. Massachusetts has experience with that problem. It's the first state to require nearly everybody to have health insurance. Drew Altman, president of the Kaiser Family Foundation, says Massachusetts is the first real-world test of how Americans respond when they are told they must buy health insurance. "Literally, we didn't know whether people in Massachusetts would say 'Hell no, I won't go' or go to New Hampshire or Rhode Island, or they would participate in the program," Altman says.

So far it seems to be working. If you make up to $33,000 a year, Massachusetts subsidizes your coverage. People who make more than that have to pay out of their own pockets. Only about 15 percent of the uninsured — about 75,000 people — have asked to be exempted. "What we've seen over the years is that people really want health insurance," Altman says. "They will struggle and stretch the family budget to get it and hang onto it." But the new poll finds some uninsured people who make good money say they can't afford health insurance on their own. James Brancatelli is one of the 29 percent of uninsured people who told pollsters he would be willing to pay more — but only $200 a month, tops.

"I haven't had insurance for the past four years," Brancatelli said as he made his rounds in Tucson, Ariz., delivering pharmaceuticals. He's self-employed. "Unfortunately, if I want health care, I have to purchase it myself," he says. "And unfortunately, for me and my wife, it is about $400 a month." He and his wife, Kimberly, have put off having a baby because of the cost. "We've looked into that," he says. "And to have a child, it'll roughly cost us about $30,000 without having insurance. So it's crazy." He says a hospital told them the charge for the labor and delivery room alone would be $7,000.

Massachusetts has tried to come up with affordable plans for people with middle-class incomes. When Brancatelli's information was entered into a government Web site to see what he could buy if he lived there, there were 19 plans in the Boston area for people like him. The cheapest one, which has deductibles and co-payments but prescription drug coverage, would cost the Brancatellis $615 a month. "That still would probably be out of my price range," he says.

The Brancatellis make $80,000 a year. Their fixed expenses total $3,500 a month. After gas, food and other expenses, he says, there's not much left. Under Massachusetts' rules, the Brancatellis would be expected to pay 10 percent of their income for health insurance. That's about $670 a month. "If there were some subsidy for that, we would have no problem with that, you know?" he says. "But since we don't have that, we just can't afford to put out $8,000 to $10,000 a year for health coverage." MIT health economist Jonathan Gruber, who sits on the board of the new Massachusetts health insurance agency, says if everybody's going to be covered, some people will have to get used to the idea of paying more than they think they can.

"To my mind, the biggest gain from national health insurance is not necessarily in terms of improving health," Gruber says. "There's just a huge benefit in not having to go to bed at night worried about whether you're going to wake up with cancer and therefore go bankrupt." Gruber says the nation needs to create a "culture of health insurance," as Massachusetts has begun to do, where people think it's as much a part of the budget as car payments and utility bills.

-excerot from NPR

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