center (1-800-DIABETES) because they. had health insurance problems. faces an epidemic of diabetes, a disease. in which elevated blood glucose levels …
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Health Insurance and Diabetes: The Lack of Available, Affordable, and Adequate Coverage
Karen Pollitz, MPP; Eliza Bangit, MA; Kevin Lucia, JD; Mila Kofman, JD; Kelly Montgomery, JD; and Holly Whelan, MPA
B
etween March 2003 and June 2004, the American Diabetes Association ADA and researchers at Georgetown Universitys Health Policy Institute completed a project that examined through individual case studies the availability, affordability, and adequacy of health insurance for people with diabetes1 Over the course of the project, caseworkers and researchers took calls from 851 people who contacted the ADA national call center 1-800-DIABETES because they had health insurance problems The majority of cases studied involved problems with private health insurance because this is how most nonelderly Americans obtain health coverage Some problems related to public coverage were also studied, however Calls were accepted from people who were younger than age 65 and who were either uninsured, transitionally insured with coverage that was about to end, or insured with other problems Information about people and their insurance circumstances was recorded in a database Callers were
also asked whether they would be willing to share their stories, and two-thirds said yes The focus of this project was on diabetes because the condition is so prevalent, and health insurance is essential to managing diabetes effectively The US faces an epidemic of diabetes, a disease in which elevated blood glucose levels damage nerve endings and blood vessels, leading to serious health complications including blindness, kidney failure, heart attack, and stroke Today, an estimated 18 million Americans have diabetes, and 1 million more are diagnosed each year2
Diabetes can be effectively managed, but medical care and supplies needed to monitor and control blood glucose levels are expensive Numerous scientific studies have found that health insurance problems make it harder for people to manage their diabetes, often with devastating consequences35 Just the routine costs of managing diabetes to test and control blood glucose levels can reach hundreds of dollars per month1 Uninsured adults with diabetes are far less likely to receive needed care and effectively manage their disease, and those with health insurance have difficulty obtaining needed care when coverage is inadequate6,7
The stories featured here are consistent with these findings and demonstrate what can happen to people who are sick when their health coverage breaks down Case studies of health insurance problems do not present a complete picture of the health coverage system However, just as automobile safety experts study data from car crashes for clues about how to make the roads safer, examining the health insurance problems of people with diabetes yields important clues about how to make coverage work better when it is needed most Project staff worked with callers to try to resolve their health insurance problems using available resources under federal and state law Options under employer-based coverage, individually purchased insurance, and public programs were explored The vast majority of problems could not be resolved because there are not enough safeguards to guarantee available, affordable, adequate health coverage for all
people in the United States, regardless of their circumstances In some cases, people had tried so long without success to find health coverage that they finally gave up on the system altogether Convinced they would never be able to find affordable, adequate health
insurance, these discouraged uninsured individuals no longer sought insurance coverage, but instead only charity care Key Issues: Availability, Affordability, and Adequacy Problems were resolved for one in five callers Most often, this happened when people got new jobs with good benefits Sometimes, other safety nets, such as high-risk pools, provided a solution Almost 60 of callers were eligible for some assistance that was not adequate to solve their problems For example, 377 people, including Reed described below, had lost or were about to lose job-based health benefits and needed protections under the Consolidated Omnibus Budget Reconciliation Act Reed Reed, age 48, of Texas, lost his job and health benefits when his employer went out of business Because the health plan was terminated, Reed had no COBRA continuation protection He found a new job with health coverage within 4 months However, while he was uninsured, Reed developed a foot ulcer and subsequent infection that required hospitalization and intravenous antibiotics The cost of this care was approximately 10,000, a medical debt Reed must pay
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of 1985 COBRA to
remain temporarily covered under their former group health plan, but only 31 were able to do so Most could not afford to pay the entire premium, including the former employers contribution an affordability problem Others were unaware of their COBRA rights or could not claim coverage because of COBRA eligibility limitations problems of availability Almost half the people who called had problems involving individual health insurance One-fourth of adults need to buy health insurance on their own at some point over a 3-year period if they are not eligible for either jobbased coverage or public programs8 However, in most states, people must qualify for individual health insurance based on health status, and those with diabetes are considered uninsurable and so will be turned down an availability problem Sometimes coverage must be offered regardless of health status, but people with health problems can be charged more an affordSylvia Sylvia, age 52, of Michigan, lost insurance a year ago when her husband lost his job and health benefits They could not afford COBRA Sylvia looked into guaranteed-issue policies offered by Blue Cross The premium for the least expensive option seemed
affordable under 300 per month for a couple, but that policy did not cover physician care or prescriptions Sylvia could not afford both the premium and out-of-pocket costs for their care, so she did not buy the policy Instead, she applied for pharmaceutical assistance from the company that makes her insulin A follow-up call to Sylvia 2 months later was answered by her daughter, Cindy She said her mother had fallen ill and was in the hospital She would recover, but Cindy worried about how her parents would manage to pay the resulting bill
ability problem In other states, inexpensive individual policies are available, as in Sylvias case described below, but dont cover prescription drugs or do require high deductibles an adequacy problem Individual health insurance provided a solution for only 15 callers In 32 states, high-risk pools have been established to offer individual health coverage to residents who are turned down by private insurers More than 340 callers, including Fred described below, lived in states with high-risk pools and needed coverage, but only 7 enrolled Public awareness of these programs is low–only 27 of ADA members surveyed had ever heard of their states
high-risk pool–and eligibility rules can be restrictive availability problems All high-risk pools charge higher premiums for coverage than apply to policies in the private market an affordability problem, and Fred Fred, age 60, is a minister in Wisconsin with an annual salary of 20,000 and no health benefits He paid out of pocket to see his physician Test strips were his biggest ongoing expense; those that fit his meter cost 85 for a box of 100 strips Fred had been uninsured 10 years and no longer sought coverage, convinced none was available that he could afford But he agreed to look into the Wisconsin high-risk pool, which has premium subsidies for lowincome residents However, for someone of Freds age, the annual cost of single coverage under Wisconsins high-risk pool would have been 7,692, or almost 40 of his gross income The pool subsidy program would have reduced this by roughly 15 In addition, had he enrolled, Fred would have had to pay premiums for 6 months before his diabetes would have been covered because of the pools pre-existing condition exclusion period
all but a handful of pools exclude preexisting conditions for at least some of their enrollees an adequacy
problem For another one in five callers, no help was available at all Most often, this was the outcome for people who were underinsured, such as Andrea described below Very few government laws or programs exist to help people who have health insurance that is inadequate to cover their medical needs As a result, an increasing number of insured Americans are underinsured High medical bills are the leading cause of personal bankruptcy in the United States, and 80 of the people who file for bankruptcy for this reason have health insurance9 Public Policy Implications Several key observations emerge from these case studies First, it can be easy to lose health insurance Most often, commonplace events, such as a job loss or change or a divorce, led to callers losing their health insurance Because health insurance in the United States depends on a persons employment status, family status, income, age, health status, and state of residence, a change in any of these facAndrea Andrea, age 40, of Illinois, is married, and her husband works for a fast-food chain that offers health benefits However, coverage is expensive about 1,000 monthly for the familys share and requires 25 coinsurance for
prescription drugs In addition to Andreas diabetes, her children have asthma, so the familys share of costs for the medications they need is another 400 per month Andrea cant always afford all her medical expenses, so when money is tight, she buys medicine for the children but does without her own She also tests her blood glucose levels infrequently The last time she saw her doctor, her blood glucose reading was too high
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tors can and often will automatically change or disrupt health coverage On average, 2 million Americans lose health insurance every month10 Second, regaining health insurance can be difficult People with diabetes who applied for individual health insurance were usually denied Many could not qualify for Medicaid or Medicare When new coverage was available, callers often found it unaffordable or inadequate Access, affordability, and adequacy barriers were redundant, creating layers of difficulty people could not overcome Studies show that when health coverage is lost, people in poor health are more likely to experience lengthy spells of uninsurance compared with people in good health11 Third, policymakers
must act to make health insurance available, affordable, and adequate for people with diabetes The mere presence of health insurance options does not guarantee health security Too often, policymakers have tried to patch cracks in the system of health insurance by creating safety net protections that turn out to be too expensive or too obscure and complicated to find or that offer coverage inadequate to help people effectively manage diabetes More effective protections are possible, but they require greater expense or government regulation than policymakers have been willing to support to date The stories shared here of these people with diabetes remind us that the consequences of health insurance problems are also unsupportable Real people are struggling with financial and medical complications that could have been prevented had access to test strips, insulin, prescription drugs, and other medical care been assured It is time to take a hard look at what
we value in our health care system The stories of people with diabetes and their health insurance problems reveal ways in which the US coverage system is failing those who need it most Their experiences provide a standard against
which policy proposals can and should be measured To address the needs of people when they are sick, policymakers must promote and expand coverage that is available, affordable, and adequate Failures will persist as long as one of these key features is traded for another Strengthening the health coverage system to accomplish these goals will address the needs of the people in this report and others like them throughout the country And it will protect individuals who are healthy today but who may find themselves sick and in similar circumstances in the future ACKNOWLEDGMENTS The authors express their thanks to the WK Kellogg Foundation, the Robert Wood Johnson Foundation, the Commonwealth Fund, and the American Diabetes Association for their generous support for this project The views presented in this report are those of the authors and do not necessarily represent those of the funders REFERENCES
1 American Diabetes Association staff estimates Staff used http://wwwcvscom for online pricing of diabetes medications and supplies The Medicare Fee Schedule was used to determine the cost of lab tests, office visits, etc An appendix detailing this information is available in the full
report titled Falling Through the Cracks: Stories of How Health Insurance Can Fail People with Diabetes released February 2005 by the American Diabetes Association Available online from http://webdiabetesorg/advocacy/health researchreportpdf 2 National Center for Chronic Disease Prevention and Health Promotion: Fact sheet: A diabetes
report card for the United States Available from http://wwwcdcgov/diabetes/pubs/pdf/report cardpdf Accessed 24 August 2004
3 Beckles GL, Engelgau MM, Narayan KM, Herman WH, Aubert RE, Williamson DF: Population-based assessment of the level of care among adults with diabetes in the US Diabetes Care 21:14321438, 1998 4 Ayanian JZ, Weissman JS, Schneider EC, Ginsburg JA, Zaslavsky AM: Unmet health needs of uninsured adults in the United States JAMA 284:20612069, 2000 5 Saaddine JB, Engelgau MM, Beckles GL, Gregg EW, Thompson TJ, Narayan KM: A diabetes report card for the United States: quality of care in the 1990s Ann Intern Med 136:565574, 2002 6 Bindman AB, Grumbach K, Osmond D, Komaromy M, Vranizan K, Lurie N, Billings J, Stewart A: Preventable hospitalizations and access to care JAMA 274:305311, 1995 7 Goldman DP, Joyce GF, Escarce JJ, Pace JE,
Solomon MD, Laouri M, Landsman PB, Teutsch SM: Pharmacy benefits and the use of drugs by the chronically ill JAMA 291:23442350, 2004 8 Duchon L, Schoen C, Doty M, Davis K, Strumpf E, Bruegman S: Security Matters: How Instability in Health Insurance Puts US Workers at Risk: Findings From the 2001 National Health Insurance Survey publ no 512 New York, Commonwealth Fund, 2001 9 Jacoby MB, Sullivan TA, Warren E: Rethinking the debates over health care financing: evidence from the bankruptcy courts New York University Law Rev 76:375-415, 2001 10 Short PF, Graefe D, Schoen C: Churn, Churn, Churn: How Instability of Health Insurance Shapes Americas Uninsured Problem publ no 688 NewYork, Commonwealth Fund, 2003 11 Haley J, Zuckerman S: Is Lack of Coverage a Short- or Long-Term Condition? Report to the Kaiser Commission on Medicaid and the Uninsured publ no 4122 Washington, DC, Kaiser Family Foundation, 2003
Karen Pollitz, MPP, is project director; Eliza Bangit, MA, and Kevin Lucia, JD, are research associates; and Mila Kofman, JD, is a research professor at the Georgetown University Health Policy Institute in Washington, DC Kelly Montgomery, JD, is director, and Holly Whelan, MPA, is
manager of Health Insurance Advocacy at the American Diabetes Association in Alexandria, Va
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