Health Insurance - On Small Business Priced Out of Health Insurance, Americans Rig Their Own Safety Nets
When their son Sky was born four years ago, Lindsie
and Chris Bergevin were hit with a big surprise: $7,000 in bills for the
birth that their health plan didn’t cover. Sky was two when the couple
jettisoned their medical insurance, which helped them eventually pay off
the debt.
Now that they’re ready to have a
second child, they’re not going back to their old coverage, with its
premiums of more than $350 a month. Instead, they’ve patched together an
alternative through a religious group and a primary-care doctor whom
they can visit anytime for a monthly fee.
“I was so jaded with the whole health-care insurance situation,” Lindsie, 35, says. “I just didn’t want to deal with it.”
The
Bergevins, who rent a snug little house near downtown Boise, Idaho, are
joining a small but growing number of Americans rigging their own
medical safety nets. They’re frustrated by the high costs, opaque
pricing, and maddening bureaucracy of health insurance.
In their quest for a different way, they’re meeting
doctors like Julie Gunther who are also fed up. These physicians have
opted to reject insurance, instead charging patients directly in return
for more personalized care.
“I like to think we
can protect people in vulnerable moments where they’re going to get lost
like a widget,” Gunther said, “because they’re not a widget for us.”
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No
reliable data exist on how many people are replacing insurance with
arrangements like the Bergevins’, but the trend appears to be gaining
momentum.
The number of people joining so-called health-care
sharing ministries—religion-based cost-sharing plans—rose 74 percent
from 2014 to 2016, according to the latest Internal Revenue Service
data. An alliance for the groups said that more than 1 million people
now participate in such programs. Similarly, primary-care clinics like
the one Julie Gunther started in 2014 have grown to almost 900 from just
a handful in the early 2000s, according to the Direct Primary Care
Coalition, a trade group for the clinics.
The
number of people without traditional insurance is expected to increase.
The Trump Administration lifted the Affordable Care Act’s penalty for
those who go without insurance, while also encouraging the growth of
lightly regulated products such as short-term health plans. Proponents
of Obamacare fear the administration’s actions will draw healthy people
out of the ACA marketplaces, raising costs for those who remain.
Though
the ACA expanded coverage to 19 million Americans, some of those gains
are reversing. About 28 million remain uninsured. A study by the Kaiser
Family Foundation, a health-research nonprofit, determined that most
uninsured families simply found health insurance too expensive.
The Bergevins are one of those families.
Lindsie
is a freelance graphic designer who focuses on clients in the craft
industry. Chris, 34, is a supervisor at the auto shop the Bergevins
jointly own with another couple. Though the business is growing, things
were tight enough that Chris didn’t draw a salary until last summer.
Last year, the couple took home from $40,000 to $50,000, after taxes.
In 2014, when Lindsie was pregnant with Sky, the couple still had coverage through her job at the Idaho Statesman newspaper.
A
calculator on her Aetna health plan’s website estimated the Bergevins
would need to pay about $3,000 or $4,000 out-of-pocket for Sky’s birth.
When the total bill came, the sum for prenatal care, hospital costs,
anesthesia, and other care was triple the estimate.
They
were still paying off Sky’s birth in 2016 when Lindsie had surgery to
remove her tonsils and correct a deviated septum, leaving them with
several thousands of dollars more in bills.
She put the sum on a CareCredit medical credit card and is paying $300 each month toward that debt.
As
the couple thought more about it, maintaining their coverage made
little sense. They were falling deeper into medical debt, despite having
insurance which itself cost thousands of dollars a year. In 2016,
Lindsie left her newspaper job to devote herself full-time to her
thriving freelance design business—and they went uninsured.
“I
couldn’t justify it,” she says. The cheapest policy she could find
through the Affordable Care Act, she recalls, was $547 a month—more than
half the family’s $875 monthly rent at the time. It had a high
deductible that could leave them with out-of-pocket costs of more than
$10,000.
“If something were to happen to us, we
would have been in trouble,” she acknowledges. To hedge, the couple
bought an inexpensive accident policy from Aflac that would cover some
costs from an injury if, for example, Chris hurt himself working.
A friend told them about a small primary-care
clinic called SparkMD less than a mile from their house. The doctors
didn’t accept insurance. Instead, they charged a monthly fee of $130 per
family. That allowed visits as needed without any limits. When Lindsie
went to check it out, a physician began with an in-depth conversation
about the family’s health.
“It was amazing. She sat down with me for an hour and talked about everything,” Lindsie says.
Gunther,
the Bergevins’ new physician, had long wanted to be a family doctor in
her hometown. Working for a large hospital system, though, she was soon
chafing under a bureaucracy that seemed to make too many of her clinical
decisions for her, down to what tools and equipment she could use. Even
worse, Gunther was paid based on her volume of patients and services
billed.
She saw patients in 15-minute intervals and
says she felt like a factory line worker. She’d later joke that she
spent longer waiting in line for her morning coffee than she did with a
patient.
“I was saying ‘I’m sorry’ all the
time,” Gunther, 42, recalls. “I’m sorry I’m late, I’m sorry this didn’t
get called in, I’m sorry this got forgotten, I’m sorry they didn’t give
me the message.”
Burned out, she quit her job
in 2014 and started her own practice. She borrowed about $200,000 to
renovate an old red-brick law office on a leafy corner of downtown
Boise, a few blocks from one of the city’s big hospital campuses.
Along
with a nurse practitioner and a small office staff, she cares for about
600 patients. A typical primary-care doctor carries at least double or
triple that load. More than half of Gunther’s patients have health
insurance, often in high-deductible plans. Others are small business
owners like the Bergevins. Most are disenchanted with the health-care
system.
Last year, Lindsie Bergevin had a bad fever and
what she described as “the worst pain I think I ever had in my head.”
She called Gunther at 9:30 p.m. on a Saturday. Gunther met her at the
clinic 15 minutes later. “She’s like, ‘Girl, you have a double ear
infection, and the worst I’ve ever seen.’”
Bergevin
walked out with an antibiotic and says that if Gunther hadn’t seen her,
she would’ve gone to the emergency room, which could have resulted in a
bill for hundreds or thousands of dollars.
Gunther tells her patients that belonging to her practice is not a replacement for having health insurance.
“There’s
a whole bunch of things I can’t take care of,” Gunther says. “If you’re
not standing upright, or bleeding doesn’t stop, do not call me.”
In
April, knowing that they wanted to conceive this year, the Bergevins
paid to join a Christian nonprofit called Liberty HealthShare.
Organizations like Liberty, sometimes called faith-based plans, help
like-minded members share some medical costs. To join, members must
pledge to adhere to Christian principles. They are required to make
fixed payments each month, and the money is disbursed to cover
health-care needs for other families.
Though health-sharing ministries function like
insurance in some ways, they aren’t regulated by states, don’t have
capital requirements to protect against large losses and don’t have to
adhere to rules about minimum benefits. They decline to cover medical
expenses that result from behavior they deem immoral. They won’t pay
medical costs for a drunk driver in a car crash, for example, or for
contraception.
There are other restrictions
too: Liberty limits coverage of pre-existing conditions for up to three
years, according to its guidelines. Members can also get bounced for
“failure to fully disclose known or suspected pre-existing condition
information” when they join. Those limits are part of the reason why
they’re cheaper—and potentially riskier.
The
Bergevins originally expected to pay $450 per month for Liberty. Because
Lindsie is overweight, they pay a surcharge of $80 per month—a fee
regulated insurers are barred from charging. When they joined, their
plan had an “annual unshared amount”—the equivalent of a deductible—of
$1,500. Two months later, they learned that amount would increase to
$2,250. Lindsie wasn’t thrilled, but she calls it “a ton cheaper than a
typical deductible.” And on the plus side, Liberty would reimburse them
for some of the cost of membership in SparkMD.
In
early June, Lindsie sat at her kitchen table with a stack of medical
bills going back four years. Sky ran in from the living room, where Dr.
Seuss cartoons played on the TV, looking for dessert before he finished
his dinner.
The Bergevins’ improvised plan has
pros and cons. They didn’t have to pay premiums for almost two years
while they were uninsured, easing their finances significantly while
their businesses grew. They love the personalized care they get from
Gunther. And their costs for having another child should be capped at a
lower level under the Liberty plan.
But between
Liberty and SparkMD, the Bergevins pay more than they did for health
coverage through Lindsie’s old job, and, she estimates, about as much as
Obamacare insurance would cost. The family is still exposed to
considerable risk. Liberty caps reimbursements at $1 million—a limit
that insurance companies can’t impose. They have two friends who have
had cancer, and, Chris says, “a million’s definitely not enough.”
The
Bergevins have their fingers crossed that their choices will allow them
to expand their family without incurring the kind of debt that Sky’s
birth and Lindsie’s surgery left them with. But they know their
improvised approach isn’t for everyone.
“It’s
not like I’m trying to say, just go without insurance,” Lindsie says.
“You have to find something that’s going to work for you.”
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