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Lack Of Health Insurance Leads Many To Bankruptcy

With the never-ending rise of health care costs, comes a never-ending debate over how to pay for it.

In Oregon, voters will decide Measure 50 this fall, which raises tobacco taxes to pay for the Healthy Kids Program. And no matter how that measure is decided, it's clear that in Oregon, as elsewhere, the healthcare system as a whole is not well.

In the last few weeks, two studies have come out highlighting some of the problems.

A Harvard study found that half of all Americans who file for personal bankruptcy, say that medical expenses are a major  factor.  Another by consumer group, Families USA, suggested that the number of uninsured Americans may be twice as  high as previously believed.

Kristian Foden-Vencil found some struggling Oregonians using OPB's new Public Insight Network, and has this report.

In order to be considered uninsured by the Census Bureau, you have to have been without health coverage for a full year.  The consumer group, Families USA, took a closer look at those numbers.

It found that if people who didn't have coverage for a month or more were included, then a third of all Americans could be considered uninsured at some point in the year. Ron Pollack is the group's executive director.

Ron Pollack: "These are families that typically have a breadwinner who is in a job that does not provide healthcare coverage and the cost of buying insurance is too high a percentage of their income to afford."

The study found that in Oregon for example, a state with more than three million people, about a million don't have insurance at sometime each year.

For many of those people, a break in health insurance isn't a problem. They go on to get another job with health benefits.  But if a person who's between health plans happens to get sick, or has an accident during that time, a lack of health insurance can literally mean bankruptcy.

Take the example of Gary Marsh, an electrical engineer from Aloha. At age 50, he was at the top of his profession, working full-time and enjoying full benefits. But in 2002, there was a recession and he was laid off.

Gary Marsh: "Anybody that was making a lot of money they cut. And hired two guys at half the price."

He tried to get another job in his field, but no one was hiring.  When finances got tight, he applied for a commercial driver's license — to drive big rigs. But when he took the required physical, it turned out he was severely diabetic and couldn't get the license.

With no health insurance, it cost $400 to get a doctor's appointment and a prescription. But he says, the prescription lasted for four months and he couldn't get it renewed without another $400 office visit.

Gary Marsh: "After that prescription ran out, I've been buying medicine over the internet from Mexico. I can still pretty much self-medicated over the internet from Mexico until Bush puts the squash on that then I guess I'll have to sell my house to buy medicine or something. I don't know."

Federal law bans citizens from buying prescription drugs from outside of the U.S., but it's currently not widely enforced.


We received help reporting this story from people in our Public Insight Network who have agreed to help us cover the news by sharing their knowledge and experience.

If you'd like to contribute your expertise, you can learn more about the Public Insight Network and sign up by going to our web site.

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Marsh recently found a job doing electrical engineering, but with a temp agency. That means he still doesn't have health insurance.

And he says, even if he got a full-time job, he might not be able to get insurance if he had to take a physical exam because he now has a pre-existing condition.

Marsh says he never thought he'd be considering bankruptcy.

But even having insurance is no guarantee against medical bankruptcy. Take the case of Karah Pino, a 33-year-old student at the Oregon College of Oriental Medicine, who was in a car crash.

Karah Pino : "So I was holding onto the steering wheel trying to keep myself from being torqued so badly that my spine would be twisted. Basically, I didn't find out for another year, but I ruptured a tendon in my shoulder."

Pino spent months trying to walk properly again, going to see doctors, specialists, acupuncturists and osteopaths. She figured she'd be okay financially, because she's on the Oregon Health Plan. But only about 30 percent of her costs were covered and she's now tallied up a $50,000 medical bill. And an accident settlement is still nowhere in sight.

Karah Pino: "It's like I cannot even take it seriously, it's so much money and it's so unfathomable that I would be expected to just keep doing this and not having any kind of help. It's been really disheartening. And I was in shock when I realized the way the system is working, or not working right now."

Pino owes another $100,000 in student loans from school and $20,000 in credit card debt. She's been putting her living expenses on plastic because she hasn't been able to work since the crash.

She's considering bankruptcy, but to save money she's giving up her apartment next month. She says she'll live on couches as she recovers from her next surgery.

Doctor David Himmelstein, an associate professor at Harvard, says Pino's case is not unusual. About half of all Americans who file for personal bankruptcy, cite medical bills as a major cause.

David Himmelstein: "This is a very common problem. It's a middle class problem. And until you're faced with a serious illness, it's hard to believe how vulnerable you really are. And virtually none of us have really comprehensive coverage that would last through a prolonged and serious illness."

He says that over the last 20 years, there has been a 20-fold increase in the number of medical bankruptcies — because healthcare costs keep increasing and incomes don't.

His solution?  Universal healthcare. Which he says won't cost more than our current system because what he calls the "bloated bureaucracy" surrounding billing and insurance, will disappear.

While most Americans concede there is a problem, there's little consensus about what to do.

People like Devon Herrick, of the National Center for Policy Analysis,  don't think  universal health care is a good idea. He thinks things aren't as bad as they seem and can be fixed with a few simple changes.

For example, he says healthcare prices need to be grounded in reality, like the cost for electronics at retail outlets like Best Buy.

Devon Herrick: "The prices hospitals charge are really just a point of negotiation. Blue Cross Blue Shield, might be getting 50 percent off the list price. Well list price is really a fictitious figure. I think if people controlled more of the funds that pay for the medical services and goods. Prices would more closely reflect cost. And hospitals would have to start quoting prices and giving you package deals."

Herrick believes a greater focus on prices could cut healthcare costs by 30 percent.

Editor's Note 

The original version of this story   reported that R.V. was fired from his job. That is incorrect. In fact, R.V. told us he was laid off, not fired. OPB regrets the error.

But R.V. isn't so sure. He was a project manager for a Portland high-tech start up — until he got thyroid cancer. After three months off work he was laid off.  He describes himself as extremely financially conservative. Yet last year he had to spend $29,000 of his own money on medical expenses.

R.V.: "I mean I've been just doing a whole lot of things I can do to bring in money. Selling furniture, selling audio equipment and computer equipment I have. Fixing audio equipment, working part-time jobs, working contract programming jobs while I look for a full-time permanent one. And then just slowly burning through my savings and my retirement fund."

He says if he reaches the point where he has to foreclose on his house, he's going to leave the U.S. and live in Spain or New Zealand —  both countries that  have universal healthcare systems and emphasize preventative medicine.

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