- 6/10/2025
How a worsening economy, major illnesses, and insurance company decisions are impacting the American health care system.
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TVTranscript
00:00Let there be no doubt, health care reform cannot wait, it must not wait, and it will
00:26not wait another year.
00:30Tonight on Frontline, as the federal government begins to grapple with health care reform, Frontline
00:36travels the country to investigate our broken health care system.
00:41We meet Americans whose medical bills have driven them into bankruptcy.
00:46So she said, well, you're uninsured?
00:47And I said, yes, I am.
00:49She said, well, how are you going to pay the bill?
00:50I said, you know, that's a real good question.
00:53And people who can't afford the treatment they need.
00:56There isn't any country in the developed world where you would have to put off major
01:03surgery because you couldn't pay for it.
01:08And others who are losing insurance coverage just when they need it most.
01:12Three days later, I received a letter telling me that they were rescinding my coverage.
01:16The total amount came to in excess of $160,000.
01:22And some who completely fall through the cracks in the system.
01:26Nikki didn't die from lupus.
01:28Nikki died secondary to the complications of a failing health care system.
01:33It's designed to cut out on you right when you need it most.
01:36It's like having an airbag in your car that's made out of tissue paper, you know.
01:40I'm so glad that it's there.
01:42But if I ever get in a crash, it's not going to protect me.
01:46Tonight, what it's like to be sick around America.
01:50Seattle, Washington.
02:18Melinda Williams, four months pregnant, wakes up in the middle of the night.
02:26I just knew that something was wrong.
02:28And so I flipped on the light and I found that I was laying in a pool of blood.
02:33And I woke up Mark and we just held each other and sobbed.
02:38We were sure that we'd lost the pregnancy.
02:40She's rushed to Swedish Hospital in Seattle, where specialists do everything possible to save her baby.
02:51Her pregnancy is stabilized, but Melinda is in and out of the hospital for the next few months.
02:57And then at 27 weeks, her water breaks.
03:02And we thought, okay, we're going to go in and we're going to give birth to a baby, you know, barely halfway through our pregnancy.
03:09After a month in the hospital, confined to bed, her baby, Reese, was delivered by C-section, still nine weeks premature and requiring state-of-the-art medical care.
03:26He was just wired up from head to foot.
03:30He had wires over every part of his body, monitoring his vital signs and huge respirator over his face.
03:39He had feeding tube down into his stomach.
03:42And he just looked like a piece of electrical equipment rather than a little baby.
03:46And he was so tiny.
03:47He was, you know, not even four pounds.
03:50The fact that Reese survived is a testament to the quality of American health care.
03:57But what about the cost?
03:59We got some statements while we were still in the hospital.
04:02But more bills started to come, I think, after we got home when Reese was still in the hospital.
04:07And, you know, the numbers were terrifying.
04:09I mean, if you can imagine that 24-hour intensive care, including Reese was on a respirator, he had phototherapy, they had specialists, they had neonatologists.
04:20Three thousand dollars, nine hundred dollars, nine hundred dollars.
04:24We've got two inches of bills, and I would say it's probably somewhere between half a million dollars and a million dollars.
04:31We have not even added it up.
04:34But it could be close to a million dollars.
04:37Fortunately, someone else paid the bills.
04:41The medical costs for this million-dollar baby were paid by one of the world's most successful corporations,
04:46Microsoft, headquartered here in their campus in Redmond, Washington.
04:53About 160 million Americans, like Mark Murray, get private health insurance through their employer.
05:00And by law, they cannot be rejected or charged more just for being sick.
05:04But not many companies are as generous as Microsoft, where employees pay nothing for their coverage.
05:13Really, you could say we have end-to-end support for just about every medical issue that you might face during your lifetime.
05:22And that's important to us, because we really run the gamut of people who are just out of college,
05:28all the way through to people who are, you know, well into and toward their retirement ages.
05:33So we really have to cover the whole spectrum.
05:35And we find that the investment in health care keeps that entire population healthier,
05:41coming to work more often, more alert, more productive.
05:46But with health care costs rising twice as fast as inflation,
05:50such generous coverage can no longer be counted on.
05:54And in the current economic climate, even employees like Mark Murray can be vulnerable.
05:59In January 2009, Microsoft staff learned that 5,000 of them would lose their jobs
06:06and the company's legendary health coverage, and all it implies.
06:11Murray was not one of them.
06:14How do people do this if they don't have health insurance?
06:17I mean, we were incredibly lucky.
06:19I really believe that if it wasn't for the support that we got through our health insurance,
06:27that we wouldn't have, you know, a baby boy right now.
06:33Microsoft is, in effect, pooling the risks of any major medical costs among its 55,000 employees,
06:40many of whom are young and healthy.
06:42But outside the Microsoft campus, things can be very different,
06:47especially for smaller businesses.
06:50Drew Altman heads Kaiser Family Foundation,
06:53one of America's top health policy think tanks.
06:57In addition to studying insurance,
06:59they have to find it for their 120 employees, like any other small business.
07:05They faced a real challenge when one of their staff also had a million-dollar pregnancy.
07:09We offer our employees two choices of plans.
07:15One is a very high-end PPO,
07:20and the other one is an HMO with a name that sounds a little like ours.
07:26And so last year we had an employee
07:28who happened to have a couple of very expensive premature babies,
07:34and the cost was in the millions of dollars,
07:37and I came in one day to learn that our premiums from the PPO had increased by 78%.
07:46We asked for justification.
07:49Under California law, we're not entitled to any information whatsoever.
07:53So there we were,
07:54the most expert organization in the land on health insurance, helpless.
08:00What did we do?
08:01We did what the hardware store would do,
08:05or the pizza place, or the dry cleaner.
08:08The only thing we could do, we switched insurers.
08:14But even with problems like that,
08:17people who get insurance through work are fortunate.
08:21One of the harshest realities of employer-provided health insurance
08:24is that when you leave your job or are laid off,
08:28you lose your health coverage.
08:31And with four and a half million jobs lost since the recession began,
08:35it can happen to anyone.
08:41Five years ago, Paul Stevens was living comfortably,
08:44working as a manager for a Houston-based telecommunications company.
08:48He owned this large house.
08:52He had comprehensive group health coverage.
08:55Then in 2005, when he was 58 years old,
08:59Paul Stevens was laid off.
09:00This is my living room.
09:02The company dumped 600 hourly employees and one manager, me.
09:08So I left my job, or was downsized,
09:121st of April of 2005.
09:15Get up here.
09:16Under the federal COBRA law,
09:18people like Paul Stevens can continue their health insurance,
09:21usually for 18 months,
09:23provided they pay the entire premium.
09:27I elected not to take it
09:29because the premiums were like $750 a month,
09:32which is pretty hefty
09:34when you consider you've got a mortgage payment
09:36and everything else going on at that time.
09:40COBRA premiums are so expensive
09:42that 90% of those eligible don't use that option.
09:46Paul Stevens says he felt sure he would soon find another job with health benefits,
09:53but after a few months of failure,
09:56he set out to get insurance in the private, individual market.
10:00Unlike employee-based health care,
10:02in this market, the insurance companies don't have to cover you.
10:05In fact, they take steps to avoid anyone who's already sick,
10:10a practice called medical underwriting.
10:12And that means that the insurer will ask you to fill out a lengthy form
10:19answering a lot of questions about how healthy you are now
10:23and how healthy you've been in the past
10:25and when's the last time you went to the doctor
10:27and when's the last time you took a prescription.
10:28And you have to sign a little form that says the insurer has access
10:33to any and all medical records ever developed, ever kept about you.
10:37And they will study up on those and decide if you are a good enough risk,
10:41they'll sell you health insurance,
10:42and if they think you're going to cost money, generate more losses,
10:46they might turn you down.
10:48And according to Georgetown University professor Karen Pollitz,
10:52it's not only serious conditions like diabetes and heart disease
10:56that can get you rejected.
10:58You might be surprised.
11:00People are turned down because they have hay fever,
11:05because they have acne.
11:08People are turned down if they're 20 pounds overweight,
11:12bedwetting, I mean, ear infections in kids.
11:16Things that are really common little ailments
11:18can get you into trouble
11:21when you are trying to buy an underwritten policy.
11:24There you go.
11:25As for Paul Stevens, he had a history of diabetes,
11:29so he was turned down flat in the individual market.
11:33He then turned to Texas' high-risk pool,
11:36the insurer of last resort.
11:38But this required Stevens to wait 18 months,
11:42and the premiums were still expensive.
11:45I believe the premiums were $600 a month
11:48with a...
11:51It was either $5,000 or $10,000 deductible.
11:53So I'm going, whoa, I can't afford this either.
12:00Then, unemployed and uninsured,
12:03Paul Stevens had a heart attack
12:05and was rushed to a cardiovascular center in Houston.
12:08And I had four arteries blocked.
12:12And I told him, I don't want to be, you know,
12:15going to open-heart surgery
12:16because that's going to cost a big pile of money.
12:19And here comes this woman in,
12:22in a pair of high heels, dressed to the nines,
12:24carrying a clipboard.
12:25And she goes, Mr. Stevens?
12:26And I go, yes.
12:28And she said, you didn't give us any insurance information
12:31when you checked in.
12:32And I said, well, I don't have any to give.
12:35So she said, well, you're uninsured?
12:37And I said, yes, I am.
12:38She said, well, how are you going to pay the bill?
12:40I said, you know, that's a real good question.
12:44Paul Stevens was treated and his life saved.
12:47But the bills came to over $200,000.
12:52After struggling to pay for a few months,
12:54he sold his house and almost all his possessions
12:57and declared bankruptcy.
12:59And now the week is complete.
13:05Too rich to qualify for Medicaid,
13:08too young for Medicare,
13:10Paul Stevens moved to Indiana
13:12to live in his mother's house.
13:15A Harvard Law School study estimates
13:17about 700,000 Americans go bankrupt each year,
13:21partly because of medical bills.
13:23No other developed country's health care system
13:26lets that happen.
13:29Thankfully, this house was here.
13:30It was my mother's.
13:32And otherwise, I'd be living under a bridge somewhere,
13:34quite frankly.
13:36So I was able to come here
13:38and I was able to pick up a few jobs
13:42that I could make a few dollars at.
13:49Paul Stevens' plan now,
13:51wait to grow old enough for Medicare.
13:53I'm 63, I've got two more years
13:58and Medicare can kick in.
14:00And then I can go
14:02and get some extensive health care,
14:06perhaps, or whatever.
14:08So I'm really rolling the dice
14:11until I'm 65 at this point
14:14and gambling that I'm going to make it.
14:17As millions lose their company-sponsored health insurance,
14:23many Americans will find themselves
14:25in this individual market.
14:27In any given three-year period,
14:30one in four Americans will spend some time here
14:32transitioning between jobs.
14:35And if you've ever been sick,
14:37it's a challenging place to be,
14:39even if you're the CEO of an insurance company.
14:42I personally am uninsurable.
14:46I couldn't get insurance.
14:47I could not get insurance.
14:48I've had heart surgery.
14:50And so I am completely uninsurable
14:52in the private market.
14:55So it's important that I keep my job.
14:59Karen Ignani,
15:01who heads the health insurance industry lobbying group,
15:04has the same dilemma.
15:05I haven't tried to buy individual health insurance in D.C.,
15:09but it may be very hard
15:10because I have a serious condition with respect to asthma.
15:14I may have to wait 12 months for coverage, number one,
15:18or I may find that I'm out of the system altogether.
15:25Medical underwriting in the private market spares no one.
15:29It enables the insurance companies to avoid the sick
15:31and select the healthy.
15:33That may be a good business model,
15:37but it's hard for people with any history of illness.
15:42Often they are forced to seek jobs
15:44just for the health benefits.
15:4723-year-old Matt Johnson works at Menard's,
15:50a regional home improvement store near Minneapolis.
15:55But this wasn't his first choice of job.
15:57A gifted student,
16:02Matt recently graduated from Concordia College
16:05and had his heart set on a career in industrial chemistry.
16:10But in his final year of college,
16:12he had a health crisis.
16:14About a month into my final semester,
16:21I started getting sick.
16:24In three weeks, I lost about 21 pounds,
16:27so a pound a day.
16:29Matt was diagnosed with severe ulcerative colitis.
16:32To save his life,
16:36doctors put him on a regimen of powerful and very expensive drugs.
16:39As a full-time student,
16:42Matt was still covered by his parents' family plan.
16:47But weeks after he graduated,
16:49Matt lost that insurance
16:50and faced monthly drug bills of nearly $1,000
16:54and costly physician visits.
16:56So he tried to find individual coverage.
17:01We looked at some of the individual health insurance policies,
17:07but most of them were either astronomically expensive
17:10or did not cover pre-existing conditions.
17:14Matt realized he needed a job
17:16with good health insurance immediately.
17:19So he put his career dreams on hold
17:21and went to work for Menard's.
17:23It's comprehensive health plan covers everything
17:27and costs Matt only about $200 a month.
17:33Matt has found life-saving health care
17:35by temporarily trading in his dreams.
17:38A little bit of a fancy finish there.
17:41But for now, he's locked in his job.
17:45And even this job, which six months ago looked secure,
17:49seems less so in a global recession.
17:51There are people who stay in jobs.
17:54We still have job lock.
17:55There are people who stay in marriages.
17:57A friend of mine called that slob lock
17:59because they just can't afford
18:02to divorce their health insurance.
18:03They just can't afford to.
18:06I think people do make kind of heroic changes in their lives.
18:10Take a job or keep a job that they don't want.
18:13Decisions about getting married.
18:15Decisions about retiring.
18:16Driven by health insurance.
18:19That's got to be a drag on our whole society at some point.
18:27Sometimes people simply have to leave a job
18:30and look for insurance on their own.
18:33For healthy Americans with no pre-existing medical conditions,
18:37there are many new products to choose from.
18:39So-called consumer-directed health plans.
18:43Cheap enough for anyone on a tight budget.
18:47But there are trade-offs,
18:49as Patricia Campbell of San Diego found out.
18:52Three years ago,
18:58Campbell left her well-paid job
18:59in the L.A. television industry,
19:01which carried full health benefits.
19:04She moved to San Diego
19:05to care for her mother with Alzheimer's.
19:07It's not like you have to worry about the calories, right?
19:10Campbell found an individual policy
19:12with monthly premiums of only $248.
19:15I got the insurance
19:19because I had to be there for my mother, you know.
19:22I mean, I just would not want to put her in a home.
19:26I just wouldn't do it.
19:28So it just seemed like a good option at the time,
19:31even though the deductible
19:33was a completely ridiculous $7,500, you know.
19:38Campbell's plan not only had an annual $7,500 deductible.
19:42On top of that,
19:44she would have to pay 40% of any hospital bills.
19:50Then, in September 2007,
19:53she got appendicitis and went in for surgery.
19:57While her insurance saved her
19:58from the full costs of the operation,
20:01she was left with a $6,000 bill,
20:04which, for now, she's paying off with credit cards.
20:09Several months later,
20:10she got some more bad news.
20:12Doctors found a cataract in her left eye
20:15that needed surgery.
20:19But she's decided to forego the operation
20:21until she's paid off what she owes for her appendectomy.
20:25I'm having to make a decision
20:26between, you know, the procedure
20:29and the reality of my finances,
20:33my budget.
20:34It does cause problems.
20:36I get nervous driving at night
20:39because, basically, you know,
20:41one eye is not so good.
20:45I'm grateful that I had the insurance
20:48for when I had my appendectomy,
20:50but there isn't any country in the developed world
20:55where you would have to put off major surgery
20:59because you couldn't pay for it.
21:04Unlike the comprehensive coverage
21:06of many large employers,
21:09consumer-directed health plans
21:10are loaded with caveats.
21:12High deductibles,
21:14co-insurance,
21:15co-payments,
21:16some don't cover drugs,
21:18and some have caps
21:19that limit what can be spent
21:21even in a catastrophe.
21:22Some people have come into the system
21:26and bought coverage that's junk.
21:30As many as 25 million Americans
21:32may be underinsured.
21:33They may be out there with policies
21:35that really won't take care of them
21:36if they get very sick,
21:38that will still leave them bankrupt
21:40and without access to health care.
21:47The individual insurance market
21:49is a tough place to be
21:50if you've been ill
21:51or if you can't afford
21:52comprehensive coverage.
21:55But even for people
21:56who can afford good coverage
21:58in this market,
21:59that doesn't mean
22:00their troubles are over.
22:04Jennifer Thompson
22:05is a realtor from Palm Desert.
22:08Until 2004,
22:10she got insurance
22:11through her husband, Reed.
22:15After he died of cancer,
22:17she continued coverage
22:18through the COBRA option
22:19for three years
22:20and then,
22:21when that was exhausted,
22:23sought insurance
22:24in the individual market.
22:27In 2007,
22:29she says she had a full physical
22:30and then filled out a form
22:32with an agent over the phone
22:33for an individual policy
22:35with Blue Cross of California.
22:37It was at that time
22:39that I mentioned to him
22:40that I had been diagnosed
22:41and treated for breast cancer
22:43back in 1996.
22:46And at that point,
22:47he explained to me
22:48that that didn't matter
22:50because this particular policy
22:52required only a 10-year
22:54health history.
22:55And as that had all taken place
22:57prior to the 10 years,
22:59that we did not need
23:00to mention it.
23:03Thompson got a letter
23:04from Blue Cross
23:04accepting her.
23:06It read,
23:07Congratulations,
23:09you have been approved
23:09for coverage
23:10with Blue Cross of California,
23:12the most recognizable name
23:13in health coverage.
23:15The immediate value
23:16of your coverage
23:16is peace of mind.
23:20But soon after signing up,
23:22Thompson faced a new crisis.
23:24I happened to be diagnosed
23:27within a month
23:28of changing companies
23:29with some further cancer,
23:32which required surgery.
23:34I was hospitalized
23:36for six days
23:37for the surgery
23:38and arrived home
23:41just before Christmas.
23:43And it was three days later
23:44that I received a letter
23:46from Blue Cross
23:47telling me that they were
23:48rescinding my policy
23:49retroactively
23:51back to the very beginning
23:53and would cover me
23:54for none of the procedures
23:56which I'd needed
23:57to have done.
24:00And then the medical bills
24:02started to arrive.
24:04The total amount
24:05came to in excess
24:07of $160,000.
24:10Your head spins,
24:11you don't know what to do.
24:12You really intrude.
24:13I didn't know what to do.
24:14I had no clue
24:16how to begin
24:17to tackle this problem
24:19that I had had
24:20landed firmly in my lap.
24:22Didn't know what to do with it.
24:25So why did Blue Cross
24:27rescind her policy?
24:28They told me
24:30that I had failed
24:31to disclose
24:32that I had been bleeding
24:34prior to changing
24:36from one insurance company
24:38to another.
24:39I had indeed
24:41had a very minute amount
24:43of spotting
24:43which I had mentioned
24:44to the doctor
24:45when I went
24:46for my annual physical.
24:48And all of my tests,
24:49my pap smear was clear,
24:50my cancer test,
24:52blood work was clear,
24:53everything was clear.
24:55And that is the basis
24:58of this whole debacle.
25:02WellPoint,
25:03which owns Blue Cross,
25:04Thompson's insurer,
25:06says they can't discuss
25:07cases like hers
25:08because they're in litigation.
25:11Sam Nussbaum
25:11is their chief medical officer.
25:14I believe that people
25:15should get care
25:16for their cancer.
25:17I believe people
25:18should get care
25:18for their heart disease.
25:19But I don't believe
25:20people should misrepresent
25:21if that was the situation
25:23on an application
25:24what wasn't true.
25:27We reminded him
25:28that Blue Cross
25:28didn't check her records
25:30until after she filed
25:31a claim for medical expenses.
25:34And I can't speak
25:35to that circumstance,
25:37but what I can speak to
25:38is first,
25:40no one,
25:41no one ever likes
25:42to see a situation
25:43like this.
25:44People are buying
25:45health security.
25:47Bruce Budakhan
25:48is CEO of Blue Shield
25:50of California,
25:51a separate insurance company.
25:52it also practices rescission.
25:56We don't focus on this.
25:58This is not a big part
26:01of what we do.
26:02It's a tiny part
26:03of what we do.
26:04But let's stop it all together.
26:07So we asked,
26:08if you think the insurance industry
26:10should stop rescission,
26:12why doesn't Blue Shield
26:13just stop?
26:14The system that we're playing in now
26:16is a voluntary system.
26:17And so people come in
26:20and out of that system
26:21when they need coverage.
26:23So right now,
26:25we do take an effort
26:27of looking at their health status.
26:31We don't think
26:31that's the right way to go.
26:33We wish we could change it.
26:34We wish as a single company
26:36we could simply stop doing that.
26:38But if we did it
26:39as a single company,
26:41we'd go out of business.
26:42Much of what we know
26:46about rescission
26:47has surfaced
26:47thanks to the reporting
26:48of L.A. Times reporter
26:50Lisa Girion.
26:52Insurance companies
26:53say the basic justification
26:54for rescission
26:55is to protect them
26:57against fraud.
26:59Fraud means that
27:00an individual
27:01knew something,
27:02was aware of something,
27:03and didn't put it down.
27:05They were trying to put one over
27:06on the insurance company.
27:07But that is not
27:09what typically is happening
27:11in these rescission cases
27:12that I uncovered.
27:13It would be something
27:13where individuals
27:15would fill out an application
27:18and the question would be,
27:21do you have a mental illness?
27:22And they would say,
27:23no, I'm not mentally ill.
27:25And the thing
27:25that they get rescinded for
27:26is being on Prozac
27:28for six months
27:29after their father's death
27:30ten years ago.
27:32You know,
27:32a brief period of grieving
27:34didn't seem to be,
27:36you know,
27:37the answer to the question,
27:38are you mentally ill?
27:41Most insurers
27:42practice rescission.
27:44It turned out
27:45that Jennifer Thompson's
27:46insurer, Blue Cross,
27:48has an entire department
27:50dedicated to investigating
27:51people who had filed
27:52substantial medical claims.
27:56Girion's reporting
27:57revealed that another
27:58California insurer,
28:00HealthNet,
28:01took it even further.
28:03What some people
28:04describe as a smoking gun
28:06was the discovery
28:08through litigation
28:09that HealthNet
28:10had actually paid bonuses
28:12to their employee
28:14who was in charge
28:15of rescissions
28:16based in part
28:18on how many rescissions
28:19she carried out
28:21in a given year.
28:22And in some years
28:23it was how many rescissions
28:24she carried out,
28:25and in other years
28:26it was how much money
28:27those rescissions
28:28allowed the company
28:29to avoid paying.
28:30Girion's articles
28:34caused something
28:35of a PR disaster
28:37for the California
28:37health insurance industry.
28:40They triggered state regulators
28:42to go after the big players.
28:45And recently,
28:46several insurers,
28:48including HealthNet,
28:49Blue Cross,
28:49and Blue Shield,
28:50have agreed to a major settlement
28:52reversing thousands
28:53of rescissions
28:54and reinstating policyholders
28:56while not admitting
28:58any fault.
29:00But the practice,
29:01which affects
29:02at least one
29:02in 100 policyholders
29:04in the individual market,
29:06continues across the country.
29:11As for Jennifer Thompson,
29:13she's now pretty much
29:15uninsurable
29:15in the private market
29:16in California.
29:18But she's hoping
29:19she'll be reinstated
29:20by Blue Cross soon.
29:21Sitting in the United States
29:24without health insurance
29:26at my age
29:27is just a very,
29:29very scary place to be.
29:31And really,
29:32based on that,
29:33I have had to make
29:35a decision
29:35and I have decided
29:37that I'm going to return
29:38back to New Zealand
29:39for a year or two
29:40until such time
29:42as I get some sort
29:43of resolution
29:44with this
29:45or perhaps until
29:46I am of an age
29:48when I can get
29:49coverage with Medicare.
29:51I mean,
29:53it's kind of an irony.
29:54We buy health insurance
29:55in case we get sick,
29:57but health insurance
29:58is profitable
30:00when it covers people
30:02who don't make claims.
30:04Insurers lose money
30:05when people make claims.
30:06In fact,
30:06those are referred to
30:07as losses.
30:09And you can get
30:10a lot of pushback
30:11if you make claims
30:13for insurance.
30:17Paulitz and other experts
30:18argue that a fairer system
30:20would be to require
30:20companies to cover everyone
30:22just as Microsoft
30:23covers all its employees
30:25and just as other
30:28developed countries
30:28do for all their citizens,
30:30what insurers call
30:32guaranteed issue.
30:36That's just what
30:37many states tried
30:38in the 90s,
30:39but they ran into
30:40a big problem.
30:42Given the choice,
30:44many Americans
30:45won't sign up
30:45for insurance.
30:46they'll behave like this man,
30:50Chaim Benamor.
30:51He's a self-employed
30:53Baltimore renovator,
30:54and he avoided
30:55buying insurance
30:56until he absolutely
30:57needed it.
30:59Well,
31:00I never had
31:01health insurance,
31:02you know,
31:03because I was young
31:04and healthy,
31:05and I didn't feel
31:05like I needed it.
31:07So, you know,
31:08never been sick,
31:10never been in a hospital.
31:11Then, age 51,
31:16returning from a trip
31:17to Israel,
31:18he had a heart attack.
31:20And when I got
31:21to the hospital,
31:22they did all this
31:23examination,
31:25and when they put
31:27the dye through
31:28the heart arteries,
31:30they saw that I had
31:31a 95% blockage,
31:33and they put the stents
31:34and put me
31:36on medication
31:37for a long time,
31:40for the rest
31:40of my life,
31:41I think.
31:43And, you know,
31:43I got home
31:44from the hospital,
31:45and I said,
31:46I've got to get
31:46insurance.
31:49This is the Plavix,
31:5175 milligram.
31:53That keeps me alive.
31:55But he found
31:56that no insurance
31:57company wanted
31:57to take him.
31:59Yeah,
32:00I have to get it
32:00with my credit card.
32:02It's not hard
32:03to see why.
32:05He'd need heart
32:06medicines for life,
32:07costing at least
32:08$300 a month.
32:10Plus,
32:11he was at high risk
32:12for another heart attack.
32:16Benamore is
32:17an insurance
32:18executive's nightmare.
32:20You get
32:21incredible selection
32:22in the individual market.
32:23People wait
32:24until they have cancer
32:25before they enroll.
32:26They wait until
32:27they're pregnant
32:27before they enroll.
32:29So if you only
32:30wait until they
32:31are very sensitive,
32:31before they enroll,
32:33the cost of premium
32:33has to be very high.
32:35I mean, literally,
32:36if the 1%
32:37of the population
32:38or 35% of the cost
32:40are the only people
32:41who enroll,
32:42then the monthly premium
32:44to break even
32:45is $10,000.
32:46So it's very expensive.
32:49Premiums soared
32:50in states
32:51with guaranteed issue.
32:52So in the end,
32:53most states,
32:54including Maryland,
32:55dropped it.
32:57Now,
32:58only five still do it.
33:00New York,
33:00New Jersey,
33:01Maine,
33:02Vermont,
33:03and Massachusetts.
33:05Let's look
33:06at those states
33:08that have said
33:09everyone who comes
33:10needs to be insured.
33:11And there are
33:12five states
33:13that have
33:14what's termed
33:14guarantee issue.
33:15And if we look
33:16at the average premium
33:17for those states
33:19in the individual market,
33:21that premium
33:21is three times higher
33:23on average,
33:24maybe $600,
33:25$700 in some cases,
33:26versus a premium
33:28where the insurance market
33:31has allowed
33:32medical underwriting.
33:35But other developed countries
33:37guarantee coverage
33:37for everyone.
33:39We asked Karen Ignani
33:41why it can't work here.
33:43Well,
33:43it would work
33:44if we did
33:45what other countries do,
33:46which is to have a mandate
33:47that everybody participate.
33:48And if everybody's in,
33:50then it's quite reasonable
33:51to ask our industry
33:53to do guarantee issue,
33:54to get everybody in.
33:56So the answer
33:57to your question
33:57is we can,
33:58and the public here
33:59will have to agree
34:00to do what the public
34:01and other countries
34:02have done,
34:03which is a consensus
34:04that everybody
34:05should be in.
34:09That's what
34:10other developed countries do.
34:12They make insurers
34:13cover everyone,
34:14and they make all citizens
34:15buy insurance,
34:17and the poor
34:18are subsidized.
34:20But America
34:21still has a complicated
34:22patchwork
34:23of private insurance
34:24for individuals
34:25and employees
34:26and public programs
34:27like Medicare
34:28and Medicaid.
34:31And sometimes
34:32people fall through
34:33the cracks
34:33in the system.
34:35Take the story
34:36of Nikki White.
34:39It's a story
34:39about lupus,
34:41a very serious
34:42chronic autoimmune disease
34:44which,
34:45if left untreated,
34:46can be fatal.
34:49When she was 21,
34:51Monique White,
34:52known as Nikki,
34:53learned she had lupus.
34:54After leaving the
34:59University of Texas
35:00where she'd studied
35:00psychology,
35:02she found she was
35:02no longer covered
35:03by her parents'
35:04health insurance,
35:05and so Nikki found
35:07jobs that carried
35:08health benefits,
35:09working stints
35:10at a local bookshop
35:11in Austin
35:12and a hospital
35:13trauma unit.
35:14home to Bristol,
35:23Tennessee to live
35:24with her parents,
35:25abandoning her dream
35:26of becoming a doctor.
35:28She had no health
35:30insurance,
35:31and her parents say
35:32they couldn't afford
35:33the rapidly escalating
35:34medical costs.
35:35her primary care physician
35:41was Dr. Amy Lynn Crawford.
35:43Good to see you.
35:43Good to see you.
35:45Why don't you tell me
35:46how things have been going?
35:47I think one of the
35:48great things
35:48as being a physician
35:49is finding a patient
35:51or an individual
35:52who is invested
35:53in understanding
35:54their disease,
35:55their disease process,
35:56and really wanting
35:57to take control
35:59and be responsible
36:00for their own health,
36:01and Nikki was
36:03absolutely one
36:03of those individuals.
36:05She had hopes
36:06and dreams,
36:08but just was
36:09unfortunate
36:09to have lupus.
36:12Dr. Crawford told us
36:13that most lupus patients
36:14can be treated.
36:17Ideally,
36:17her symptoms
36:18could be controlled,
36:19her lupus
36:20could be controlled,
36:20and she could go on
36:22to do some of the things
36:24that she or we
36:26would all expect
36:27that someone her age
36:28would be able to do.
36:30But it didn't work
36:31out that way.
36:32Outside the employer-based
36:34system,
36:35Nikki was uninsurable,
36:37and she couldn't afford
36:38the costly medicines
36:39and regular visits
36:40to specialists
36:40vital for treating lupus.
36:43In 2003,
36:45Nikki secured coverage
36:46with TenCare,
36:47Tennessee's Medicaid plan
36:48for the poor
36:49and disabled.
36:51But in 2005,
36:53following state budget cuts,
36:55Nikki was told
36:56she was no longer qualified
36:57and her benefits
36:59would end.
37:01over the next few months,
37:05sick and scared,
37:07Nikki appealed her case
37:08in letters describing
37:09her desperate situation.
37:13But she got nowhere.
37:17Her condition worsened.
37:21In November 2005,
37:23with pancreatitis
37:24and failing kidneys,
37:25she was rushed
37:26to the emergency room
37:27of Bristol Regional
37:28Medical Center.
37:31Over the next 10 weeks,
37:33she underwent 26 operations
37:35to remove dead tissue
37:37from her internal organs,
37:39racking up nearly $900,000
37:41in medical bills
37:42she couldn't possibly pay.
37:45Then she learned
37:46that she could get
37:47a private insurance policy
37:49under a federal law
37:50that mandated
37:51a continuation
37:52of the coverage
37:53she'd received
37:53from Medicaid.
37:55But the new policy
37:56was expensive
37:57and had a high deductible.
38:00She took it anyway
38:01and was flown
38:03to Duke University Hospital
38:04for further surgery.
38:07But her lupus
38:08was too advanced
38:09and in May 2006,
38:12Nikki died.
38:15Ironically,
38:16eight days later,
38:18TenCare sent a letter.
38:19There'd been a mistake.
38:22They should not have told Nikki
38:23she'd been thrown off
38:24Medicaid after all.
38:26I'm not afraid to say it.
38:28I believe in my heart
38:29that if Nikki
38:30had not lost her insurance,
38:32she would be alive today.
38:35I find it highly ironic
38:36that a society
38:39that denied her
38:40her health care
38:43then all of a sudden
38:44spent hundreds
38:45of thousands of dollars
38:46for her to be
38:47in the intensive care unit
38:48and to undergo
38:49all of these treatments
38:50and all of these
38:51interventions
38:54that still failed
38:55to be able
38:56to heal her
38:59and let her have
39:00the life
39:01that she really needed.
39:04Nikki didn't die
39:05from lupus.
39:05Nikki died secondary
39:07to the complications
39:08of a failing
39:10health care system.
39:13According to a study
39:14by the National Academy
39:15of Sciences,
39:17around 20,000 Americans
39:18die each year
39:20because they can't get
39:21the health care they need.
39:23We asked Karen Ignani
39:25if that was acceptable
39:26to the health insurance industry.
39:28No, it's a tragedy.
39:30We've been at the front
39:31of the line,
39:32one of the first organizations
39:33two years ago,
39:35to propose a strategy
39:36to get all Americans covered.
39:38It can't stand.
39:39It's the wrong thing.
39:40And from a perspective
39:41of productivity,
39:43social policy,
39:44and what is the right thing to do,
39:46we need to prioritize
39:47health care reform
39:48and we need to do it urgently.
39:54These days,
39:55the insurance industry
39:56is talking a lot about change.
39:59They say,
40:00if every American
40:01is required to buy insurance,
40:03they'll agree to cover everyone
40:05and that then
40:06the cost of health insurance
40:07will come down.
40:11Dale and Allison Abrams
40:12live in Great Barrington, Massachusetts
40:14with their kids,
40:15Quinn and Eliza.
40:17Like many Americans,
40:18they had long struggled
40:19to afford health insurance.
40:24Both were self-employed.
40:26She is a grant administrator.
40:28He is a realtor.
40:29Their combined annual income
40:31was just over $63,000.
40:33Then in 2006,
40:37when they heard
40:38that the state of Massachusetts
40:39was launching
40:40a major new health care reform program,
40:43they were hopeful.
40:45The prospect of having
40:47a state-run health care program
40:51definitely gave us hope
40:53and optimism
40:53that we would be able
40:56to get into a better situation
40:58because previously,
40:59we'd been scrambling
41:00with multiple jobs
41:02where we were self-employed
41:03and trying to make ends meet
41:05and paying all of it ourselves.
41:08And so the prospect
41:09of getting help there
41:10was something
41:12we greatly hoped for.
41:15The new plan required insurers
41:17to provide health care policies
41:18to all Massachusetts residents.
41:21And in turn,
41:23everyone was mandated
41:24to buy approved
41:25comprehensive insurance
41:26or pay a fine,
41:28about $1,000 this year.
41:31Poor people were subsidized
41:33and cut-rate consumer plans
41:35were not allowed.
41:37The plan has been in effect now
41:39for nearly three years.
41:42It's going really well.
41:43We now estimate
41:45that we cover
41:46about 97.4% of people
41:51in Massachusetts,
41:52so we clearly have
41:54the lowest rate
41:54of uninsurance
41:55in the United States.
41:58And since health care reform,
42:00we estimate
42:00that about 400,000-plus people
42:05are newly insured.
42:07But it didn't solve the problem
42:09for families like the Abrams,
42:10because even though
42:12they were now
42:12guaranteed insurance,
42:14they say they still
42:15couldn't afford it.
42:17Through the state,
42:18you could purchase
42:18private insurance,
42:20but the rates
42:21were still astronomical.
42:23I mean, they were,
42:24you know,
42:25like any private insurance,
42:26$800 for a family
42:27up to $1,700.
42:30And, you know,
42:30the plans that we would,
42:31we finally went with
42:32was about $1,100
42:33to $1,200 a month,
42:36which was really,
42:37really difficult
42:38because that was,
42:39you know,
42:40three times our food budget
42:41and almost half,
42:42you know,
42:43twice our mortgage.
42:44And it was just crazy.
42:48Massachusetts has
42:49a sliding scale
42:49of subsidies
42:50for people earning
42:51up to three times
42:52the poverty level.
42:53For a family of four
42:55in 2006,
42:56that was a little more
42:57than $60,000.
42:59So by that standard,
43:01the Abrams
43:02were just over the limit.
43:04We asked Health Secretary Bigby
43:06if they had created
43:08an impossible situation
43:09for families like this.
43:11Somebody earning
43:13over $63,000 a year
43:16would be deemed
43:18to have enough income
43:20to afford
43:21the lowest-priced product
43:25that is available
43:26through the connector
43:27if they have to buy it
43:29on their own.
43:30But the state
43:32of Massachusetts'
43:33official health care
43:34website,
43:35The Connector,
43:36says different.
43:38It says a family
43:39earning $63,000
43:40should have to spend
43:42no more than
43:43a $352 monthly premium.
43:46But no such policy
43:48exists.
43:49The cheapest policy
43:50for a family
43:51like the Abrams
43:52costs over $800
43:53a month.
43:54So eventually,
43:57Allison was forced
43:58to find a job
43:59with employee benefits.
44:01We definitely
44:03made decisions
44:04in the last couple years
44:05to find a job
44:07that at least
44:08one of us
44:09had health care,
44:10at least partially
44:12covered by the employer.
44:14So you go to a family
44:16making $65,000 a year
44:18and you say,
44:18you are mandated
44:19to buy health insurance.
44:21And by the way,
44:21it's going to cost you
44:22$8,000 for your family.
44:24Well, you just solved
44:26the guarantee issue problem
44:27because now
44:28you've got everybody
44:29in the pool
44:29except that
44:30you don't have
44:31everybody in the pool
44:32because as Massachusetts
44:33found,
44:34they had to back off
44:35on the mandate
44:35because you can't
44:36force a family
44:37to pay that.
44:39The Massachusetts
44:40experiment
44:41has revealed
44:42a basic truth
44:43that changing health care
44:45is not just
44:46about covering everyone.
44:48It's also about
44:49controlling medical costs.
44:51Massachusetts
44:52has among
44:53the highest medical costs
44:54in the country
44:55and insurance premiums
44:57there have been rising
44:58at about 10% a year.
45:01According to Dr. Tom Delbanco,
45:04professor of medicine
45:05and primary care
45:06at Harvard Medical School,
45:08a leader
45:08in patient-centered care,
45:10all the major stakeholders
45:12in the health care system
45:13are responsible
45:13for the runaway costs.
45:16Some of the doctors,
45:17I think,
45:18make too much money.
45:19Some of the institutions
45:20make too much money.
45:22Some of the pharmaceutical companies
45:23bring in too many dollars.
45:25Some of the insurance industry
45:27for sure
45:27makes too much money.
45:28I think a lot of doctors
45:29are angry about them.
45:32And in the end,
45:33it adds up
45:34to an awful lot of money.
45:37Other developed countries
45:38bar health insurance companies
45:39from making profits
45:40on basic care
45:41and cap
45:42their administrative costs.
45:44Our payment system
45:46is so administratively complex.
45:50Every patient knows that,
45:51just the claims processing,
45:53that we spend
45:54about 24%
45:56of every health care dollar
45:57goes to administration.
46:00In other countries,
46:01like Canada,
46:02it would be less than half that.
46:04And in Taiwan,
46:05for example,
46:06it's much, much less.
46:08So administration,
46:10because we seem
46:11to prefer this mishmash
46:12of private insurance plans
46:14that are simply unwieldy,
46:17eats a huge chunk.
46:19If we could cut
46:20administrative costs in half,
46:22we would have
46:23more than enough money
46:24to cover all the uninsured.
46:28If you really want
46:29to contain health care costs,
46:30well, what's a health care cost?
46:31It's a doctor's fee.
46:33It's a hospital charge.
46:34It's just exactly
46:36how many services
46:37the consumer gets.
46:38I mean,
46:39that's the heart
46:39of the cost of health care.
46:41And yeah,
46:42you can talk about
46:42our administrative costs
46:44are too high,
46:44and they are.
46:45But fundamentally,
46:47where are our costs?
46:48And if you want
46:49to contain those costs,
46:50then you have to
46:51contain doctor costs,
46:52and you have to
46:53contain hospital costs.
46:56Many governments
46:57in developed countries
46:58do this by setting prices
47:00for all doctor,
47:01lab,
47:02and hospital fees
47:03and requiring evidence
47:05of effectiveness
47:05before paying
47:06for new medical technologies.
47:08The principal driver
47:10behind the rates
47:12of increase
47:13that we see
47:13in our country
47:14in health care costs
47:14are the advances
47:15in medical technology.
47:17So in some European countries,
47:19they've developed mechanisms
47:20to make judgments
47:21about which medical technologies
47:23actually bring new benefits
47:24for people
47:25and which ones
47:26just would bring new profits
47:27for whoever made them.
47:29We don't really have a way
47:30to do that in our country.
47:31President Obama
47:34has made reducing costs
47:36a centerpiece
47:37of his health care reform plan.
47:39By a wide margin,
47:41the biggest threat
47:42to our nation's balance sheet
47:43is the skyrocketing
47:44costs of health care.
47:46It's not even close.
47:48That's why we cannot
47:49delay this discussion
47:51any longer.
47:52On March 6,
47:53he invited all the stakeholders
47:55to a health care summit
47:56at the White House.
47:58So it's not going to be easy,
47:59and there are going to be
48:00false starts
48:01and setbacks
48:01and mistakes along the way,
48:03but I'm confident
48:04if we come together
48:04and work together,
48:06we will finally achieve
48:07what generations of Americans
48:09have fought for
48:10and fulfill the promise
48:12of health care
48:13in our time.
48:14Speaking on behalf
48:15of over 100,000
48:16family doctors,
48:17we're ready to do our part.
48:19The doctors and hospitals
48:20were there.
48:20We believe that we need
48:21to expand coverage
48:22in this country
48:23to everyone.
48:24I'm honored to be here
48:25representing small business.
48:26Along with consumers
48:27and business groups.
48:28...as a key role
48:29in this debate.
48:31We want to work with you,
48:32we want to work with
48:32the members of Congress
48:33on a bipartisan basis here.
48:36And of course,
48:36the insurance industry.
48:38All said,
48:39they are now committed
48:40to reform.
48:41...you have our commitment
48:42to play,
48:43to contribute,
48:44and to help pass
48:45health care reform
48:45this year.
48:46Good.
48:47Thank you, Karen.
48:47That's good news.
48:48That's America's
48:49health insurance plans.
48:50In part,
48:51I think everyone now
48:52understands it's not sustainable.
48:54From an insurance perspective,
48:56it's not sustainable.
48:57From a business
48:58or economic perspective,
49:00it's not sustainable.
49:01Obviously,
49:02from the consumer's perspective,
49:04it's not sustainable.
49:05And I actually think
49:06the doctors and hospitals
49:07understand that
49:08it's not sustainable.
49:09So I think we're at
49:10a confluence
49:11of forces
49:13that people are really
49:14willing to work together
49:15to for a solution.
49:16Imagine the pride
49:19when we go back
49:20to our constituencies
49:22next year
49:23and say,
49:23you know what?
49:25We finally got something
49:26done on health care.
49:28That's something
49:29that's worth fighting for,
49:30and I hope all of you
49:30fight for it.
49:31Karen.
49:33This is the next
49:35big opportunity
49:36for health reform
49:37since that great debate
49:38about the Clinton
49:39health reform plan
49:40in the early 90s.
49:41And the question is,
49:42again, pointedly,
49:43whether we will blow
49:44the opportunity again
49:45this time
49:46or we will actually
49:48get it all done
49:49or get something
49:50significant done.
49:53Given the cast
49:54of characters,
49:55forging a deal
49:56won't be easy.
49:58We have a $2.2 trillion
50:00health care system
50:02full of vested interests,
50:04stakeholders,
50:05and lobbyists,
50:07and, you know,
50:07I have yet to meet
50:08a doctor
50:09who thinks
50:10he should take less.
50:11Every doctor I meet
50:13says he's underpaid.
50:14I have yet to meet
50:15a hospital executive
50:16who thinks
50:17he or she
50:18can operate
50:19unless.
50:20I have yet to meet
50:21a patient
50:22who is willing
50:23to sacrifice care.
50:26Every patient
50:27I've ever met
50:27in the United States
50:28equates quality care
50:30with access
50:31to whatever they want.
50:33I haven't met
50:33anybody that's willing
50:34to take less.
50:36And until we're willing
50:36to have that conversation,
50:38we're just sort of
50:39nibbling around the edges.
50:40Other nations have said
50:45we are going to cover
50:47our citizenry
50:48and we're going to
50:48work backwards
50:49from that.
50:51We should make
50:52a moral decision
50:53that all our citizenry
50:55has health care.
50:57And then,
50:58after that,
50:59we'll have to get
51:00downright dirty,
51:02roll up our sleeves,
51:04figure out how to do it,
51:06but say that it's a given
51:07that we will do it.
51:09Then we may be able
51:10to come up with a system
51:11that's better than
51:11what we have now
51:12and is certainly
51:13much more equitable.
51:16All right, so Reese,
51:17he's betting on 11,
51:18what did you say?
51:1911, 9.
51:2011, 9.
51:2011, 9.
51:21Our hope would be that
51:22by the time Reese is an adult
51:25and out in the world
51:26on his own,
51:27that he won't even have
51:28to choose a job
51:29based on the kind of health
51:30he can receive,
51:31that our country will have
51:32finally kind of gotten
51:34it together and realized
51:35that this is a crisis
51:36and that people need
51:37to be covered
51:39for health crises.
51:41He's doing great.
51:42He's doing really well.
51:45Our hope is that Reese
51:46and all the other children
51:49who are babies right now,
51:50when they're adults,
51:51the situation will have
51:52finally been resolved
51:54and that, you know,
51:55we'll have a health care system
51:56that works for everybody
51:56and not just the people
51:58who are lucky enough
51:58to have a great job.
51:59This report continues
52:21at our website,
52:23where you can watch
52:24the full program again online.
52:26The first big opportunity
52:28for health reform...
52:29Read the interviews
52:30with industry insiders
52:31and policy experts.
52:32People are buying
52:33health security.
52:34These 25 million Americans
52:36may be underinsured.
52:37Explore a consumer section
52:39on how to navigate
52:40the world of private health insurance
52:42and where to get help.
52:44Examine the successes
52:45and shortcomings
52:46of one state's attempt
52:47at universal coverage
52:48and then join the discussion
52:50at pbs.org.
52:52Next time on Frontline...
53:04You're talking about
53:05the center of legitimate power.
53:07An invisible world...
53:09I spent tens of millions of dollars
53:11bribing government officials.
53:12International bribery...
53:14What happens with black money
53:15is people steal it
53:16because they can.
53:17An international scandal...
53:19So we were talking about billions?
53:20Yes.
53:21Lowell Bergman investigates...
53:23You're busy poking around.
53:24It's got nothing to do with you.
53:25You should mind your own business.
53:27Black money.
53:36To order Frontline's
53:37Sick Around America
53:39on DVD,
53:40visit shoppbs.org
53:42or call 1-800-PLAY-PBS.
53:46in fact,
53:47vivent palace
53:48on DVD,
53:49on DVD
53:50of the
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