Coverage Is Scarce for High-Risk Patients
California has a class of health care outcasts, people who desperately need the protection of insurance but can’t get it because of a preexisting serious or chronic medical problem.
Some are unable to buy private insurance at any price because of their health problems. Others might be able to find an insurer willing to sign them up despite their costly or high-risk medical conditions, but the premiums often are unaffordable for all but the wealthiest people.
For people in this plight--most are women, and the average age is 48--there is just one public safety net, California’s high-risk insurance pool. But that source of protection is in danger of collapsing, a victim of its own success and the resurgence of medical inflation.
As many as 200,000 Californians may suffer from the inability to get any health insurance they can afford.
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Who are these people?
LaVerl King was a fifth-grade teacher who hasn’t been able to work since she was diagnosed with breast cancer four years ago. She had surgery and went on disability. She can’t go back to the classroom because her “energy level never returned.”
No insurance company will sell her a health policy, King says. So she’s not getting any medical care. “I haven’t gone to the doctor; I’m due for a mammogram, but I haven’t done it,” said the 60-year-old Sierra Madre resident. “What good would it do to have the mammogram and find out something is wrong? I couldn’t afford to have anything done about it.”
King says she is “doing a lot of praying.”
She applied for help from a California program with a tongue-twisting name: the Major Risk Medical Insurance Program, informally known as MRMIP (read: Mr. Mip). Created in 1991, it uses money from the state tobacco tax under Prop. 99 to help subsidize the cost of health insurance premiums for people unable to obtain private insurance due to preexisting medical conditions.
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People who qualify for the program get a choice of two or more health plans, depending on where they live, that cover doctor and hospital bills and prescription drugs and pay maximum benefits of $75,000 a year. The average premium paid by participants is $255 a month, and this typically represents about 8% of the participant’s household income.
About 60% of the total cost of the coverage is paid by participants themselves through monthly premiums; the rest of the money comes from the state. That means the cost is far cheaper than shopping on the open market and paying hundreds of dollars a month for a policy that could be canceled the next year. And for people like LaVerl King--who couldn’t buy insurance at any price--the state program is the only source of coverage.
The majority of people who sign up for MRMIP are women who have lost their insurance coverage. They lost their jobs. Or they got divorced from a spouse who had insurance at work. Or the spouse died. They have exhausted their coverage under COBRA (Consolidated Omnibus Reconciliation Act), a federal law ensuring continued health insurance coverage for 18 months after leaving a job or 36 months after a divorce or a spouse’s death.
Those in the MRMIP program don’t have new jobs that offer group insurance. And private insurance companies price insurance policies for such people so high that virtually no one of ordinary means can afford them. Unless they get a job that provides health insurance, or marry someone with coverage through their job, they’re all but locked out of private insurance. So many go on the MRMIP waiting list, which counted 4,000 people and a seven-month wait by the end of 1999.
To get help from MRMIP, you must have been rejected for insurance coverage because of health. Or you must have been offered a policy at a rate higher than the fee charged by MRMIP.
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Employed people with serious medical problems generally don’t have trouble getting insurance. That’s because of the state’s “guaranteed issue” law, which requires insurance companies to provide coverage to businesses with two or more employees. The law also sets limits on how much more an insurer can charge a company with sicker workers than a firm whose workers are relatively healthier.
No such state insurance protection exists for individuals.
“These are people the insurance industry simply won’t touch,” said Emery “Soap” Dowell, a retired insurance industry executive and a member of the California Managed Risk Medical Insurance Board, which operates the program along with its responsibilities for Healthy Families, which provides subsidized insurance for children from poor families.
In the past decade, MRMIP has helped “57,992 Californians who were faced with chronic illnesses, were unable to purchase private health coverage and who faced financial ruin due to their health care needs,” said Sandra Shewry, the board’s executive director, in a letter last year appealing for help from Gov. Davis and the Legislature.
Because the source of funding is stagnant--most of the money is coming from the tobacco tax fund, which isn’t growing--the program will take care of fewer people each year, Dowell worries. After several years of quiescence, health care costs have begun soaring again, driven by steady increases in the price of prescription drugs. Already, enrollment has shrunk to 19,000, from a peak of 22,000 two years ago.
“We have been unable to persuade anybody in either house of the Legislature or in the Davis administration to provide a supplemental appropriation so we could keep this program steady,” Dowell said.
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Other states have different approaches to the challenge of making individual coverage widely available. New York passed a law requiring insurance companies to sell coverage to anyone who applies. Minnesota imposes a surcharge on every policy, with the money going into the state high-risk pool. “Those are impossible in California right now,” said Dowell. “They may be good ideas, but we haven’t got the votes here.”
He fears MRMIP could go into a “death spiral,” with the stagnant revenue base barely sufficient to cover an ever-shrinking group of individuals as health costs keep rising. At the same time, the long waiting list would deter people from applying.
And voices like this one wouldn’t be able to talk of the help they got at a vital time. Here’s an excerpt from a letter to MRMIP: “You have protected me, guided me and helped me for more than a few years now when I was so ill that no one would help me with insurance. I feel like I am losing an old friend by canceling my insurance with you. My heart has strengthened and I am able to do some work now and am fortunate enough to be covered by my employer. Perhaps this will free up a space for another who is in big need as I was. I will always be thankful to your company and will spread the word on your efficiencies, compassion and help.”
For those interested in MRMIP information or an application, call (800) 289-6574 or (916) 324-4695.
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Medicare beneficiaries who get services at hospital outpatient centers will receive some financial relief this summer. Fewer people are staying overnight at hospitals. Instead, they go to outpatient centers, where they might have surgery and go home the same day. Radiation and chemotherapy treatments, and various types of rehabilitation treatments, also are often performed on an outpatient basis.
Beginning July 1, payments by a beneficiary for an outpatient procedure will be limited to $776, with Medicare paying for the rest. Previously, beneficiaries were paying amounts equal to about 50% of the total cost.
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Please send suggestions, questions and tips about the changing world of health care to: Bob Rosenblatt, Health section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or by e-mail to bob.rosenblatt@latimes.com.
