Health Insurance No Guarantee Against Ruin

Three-quarters of those bankrupted by medical costs were insured

By Matt Cantor, Newser Staff

Posted Jul 1, 2009 8:06 AM CDT

(Newser) – As lawmakers weigh health-reform plans, it’s becoming increasingly clear that just having coverage won’t necessarily protect individuals from financial disaster, the New York Times reports. Some three-quarters of those bankrupted by health care costs were insured at the time of their ailment. “Underinsurance is the great hidden risk of the American health care system,” says a law professor. “People do not realize they are one diagnosis away from financial collapse.”

Thus some are arguing for laws that guarantee “a base level of coverage” and protect against plans that are “relatively worthless,” the Times notes. Limited-benefit plans may pay, for example, for room and board at a hospital, but not for operations. Until “meaningful” insurance can be made more available, says a senator, “any presentation of limited-benefit plans ought to be completely straightforward, and not misleading in any way.”

[Images (2)]

[Quotes (1)]

In this July 31, 2008 file photo, a woman strides past the Hartford, Conn., headquarters of Aetna Inc. (AP Photo/Bob Child, file)

Many with health insurance still find themselves bankrupted by health costs. (Shutterstock)

« Prev« Prev | Next »Next » Slideshow

The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance. - Former Cigna executive Wendell Potter

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Dummy Firms Squeeze Millions From Medicare

Fraud-fighters finding it hard to stay ahead of shell companies

(NEWSER) - Fraudsters using complicated networks of ghost companies are sucking hundreds of millions of dollars out of Medicare every year and it's a bit like taking candy from a baby, a Reuters investigation finds. The probe—which officials say will likely lead to a criminal investigation of the firms involved—found that the "companies" of many Medicare providers are registered to nonexistent addresses, or the addresses of abandoned buildings. The thieves use stolen doctor and patient data to bill Medicare for as much money as possible in a short time. More»

White House Gives States More Say on Health Law

Proposal would let them determine 'essential benefits'

(NEWSER) - In a potentially big shift, the White House is poised to give states much more flexibility on how to implement a key part of health care reform. Under a proposal outlined by health chief Kathleen Sebelius, the federal government would largely let states determine what "essential health benefits" would be offered to residents and businesses come 2014. The New York Times calls it a "major surprise," and NPR says it "may or may not be a punt." More»

Gingrich Backed Individual Health Care Mandate

And other big government programs that benefited his clients: NYT

(NEWSER) - These days, like most Republicans, Newt Gingrich says he's opposed to the individual mandate in the Democrats' health care reform bill, which forces Americans to hold insurance. But in a May 2009 conference call with health care executives, Gingrich sang a very different tune, the New York Times has learned. "We believe there should be must-carry; that is, everybody should have health insurance," Gingrich said, "or, if you're an absolute libertarian, we would allow you to post a bond." More»

Health Reform Insured 2.5M Young People

Coverage up among 19- to 25-year-olds, now eligible for parents' insurance

(NEWSER) - Roughly 2.5 million people between the ages of 19 and 25 have gained health insurance since President Obama signed his health care reform bill, more than double the 1 million the White House had been expecting, according to a new administration analysis. The bump is almost entirely due to a provision in a law that allows young people to remain on their parents' coverage until age 26. More»

On Way Out, Medicare Boss Bashes 'Extreme' Waste

Donald Berwick says 20-30% of health care spending helps no one

(NEWSER) - Between 20% and 30% of all US health care spending is pure “waste,” according to departing Medicare and Medicaid chief Donald Berwick. “Much is done that does not help patients at all, and many physicians know it,” Berwick said in an interview with the New York Times on Thursday, his last day on the job. He cited overtreatment of patients, the failure to coordinate care, complex administrative systems, burdensome regulations, and fraud as the main reasons for the “extremely high level of waste.” More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Health Insurance No Guarantee Against Ruin