New research on healthcare reform model shows Americans are still going bankrupt paying medical bills

The March issue of the American Journal of Medicine features new research and commentaries on healthcare reform.

Ignoring the real problem of skyrocketing medical costs– Republicans at the federal level want to cripple or kill the Patient Protection and Affordable Care Act (AKA Obamacare), and Republicans at the state level want to end the Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid program for the poor.

The Republicans spin is that people should have “more choice” than Obamacare allows (although Obamacare allows you to keep your current doctor and your current plan, if you like it) and that people should not be forced to buy insurance (although requiring insurance is a key element to ridding the system of the dreaded pre-existing conditions, which are universally despised by everyone but insurance companies). My question has always been: What do they think these poor people are going to do with no coverage? Medical care is not affordable in the US.

The federal Affordable Care Act was based upon the Massachusetts reform model (developed under former Governor Mitt Romney, who wants to be the next Republican president of the US). The Massachusetts model requires everyone to buy health insurance. (Yes, a Republican came up with that idea!)

“Does the Massachusetts model work?” is the research question a group of Harvard public health scientists asked. (Those darn Harvard scientists always asking questions. What do they know anyway?)

New research released this week in the American Journal of Medicine shows that although the Massachusetts system has worked in increasing coverage, it has not significantly reduced the rate of people going bankrupt trying to pay their medical bills. Even with this health insurance system, people can’t afford medical care.

In Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference? the Harvard group reported that although 89% of debtors had health insurance coverage, underinsurance– not having adequate coverage to pay one’s medical costs– was widespread. From the Journal’s blog…

Health insurance coverage rates for Massachusetts debtors were higher in 2009 than in 2007 (89.0% vs 84.1%) and significantly higher than the national average in 2007 (89.0% vs 69.7%). Despite broad insurance coverage in Massachusetts after reform, bankruptcy filings due to medical costs did not decrease significantly between 2007 and 2009. There is a web of causality behind this finding. Although only 11% of Massachusetts debtors remained uninsured, there was widespread underinsurance, leaving people with high out-of-pocket costs in deductibles, co-pays, and uncovered services. In addition, many debtors lost their jobs due to illness or experienced reduced income due to illness. In cascading events, loss of income led to loss of housing in many cases.

The article provides a very clear example of how someone with insurance can still go broke if they get really sick.

What accounts for the seemingly paradoxical trends of increasing coverage yet stable, or even increasing (on a per capita basis), medical bankruptcy rates? Health costs in the state have increased sharply since reform was enacted.(9) Even before the changes in health care laws, most medical bankruptcies in Massachusetts, as in other states, affected middle-class families with health insurance. High premium costs and gaps in coverage—copayments, deductibles, and uncovered services—often left insured families liable for substantial out-of-pocket costs. None of that changed. For example, under Massachusetts’ reform, the least expensive individual coverage available to a 56-year-old Bostonian carries a premium of $5256 and a deductible of $2000, and covers only 80% of the next $15,000 in costs for covered services.(10) Thus, an insured couple with medical problems and an income greater than $44,000 (ie, >300% of poverty, the eligibility threshold for insurance subsidies) might pay $20,512 in annual medical expenses, a figure that far exceeds the financial capacities of the average American family.(11) Uncovered services, such as physical therapy, drugs, or home care, might push out-of-pocket costs even higher.

Progressives, who don’t like the Affordable Care Act because they believe doesn’t go far enough to protect Americans, have latched onto this new research and are using to to renew the rallying cry for single payer system (like Canada and many other countries worldwide).

So, although Republicans want to end healthcare reform and toss the middle class out to the free market (where they will really get … er… socked), the reality is that the current healthcare reform model may not be enough to protect working Americans from rising medical costs and financial ruin.

This issue of the Journal also includes three commentaries about the US healthcare system and healthcare reform.

On the Critical List: The US Institution of Medicine— a very good overview about the “rules of the game” and why US medical care is so expensive compared to other countries.

The 800-Pound Gorilla in the Healthcare Living Room— an editorial about unnecessary testing and tort reform.

The Affordable Care Act: Facing Up to the Power of the Pen and the Purse— a commentary on the attacks on reform.