Gwen Moritz

Eye of the Beholder

Gwen Moritz Editor's Note


A Little Rock lawyer named Cory Cox - one of our "40 Under 40" last year, when he was director of the Arkansas Insurance Department's Criminal Investigation Division - recently wrote a moving account of his sister's untimely death last year from cancer. It was posted on David Kinkade's conservative blog, TheArkansasProject.com.

Cox told the heart-wrenching story of Jeannie, a working-class woman whose health insurance had a maximum annual benefit of $23,000. Despite being effectively uninsured after only a couple of weeks, Jeannie couldn't have received better treatment had she been a billionaire, Cox wrote. By the time she died, a bill of more than $1 million had been run up for the treatment of what was a virtually hopeless case from the moment it was diagnosed. Those costs, Cox said, were "written off" - actually, he acknowledged, paid by other patients and their insurance companies.

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Anyone who read his story could sympathize with the tragic story of a working mother whose life was stolen away by the disease that most of us fear most. But it seems the moral of the story is in the eye of the beholder.

Cory Cox's view from the inside was that Jeannie's case illustrated everything that is right about the current system of health care in the United States. She received the finest of care even though the doctors and hospitals knew that she couldn't pay and had no insurance benefits left to draw against.

Cox scolded U.S. Rep. Vic Snyder, D-Ark., for suggesting that not having health insurance is the same as not getting medical care. Jeannie's experience, Cox argued, shows that if the government stays out of the way, compassionate health care professionals will provide first-class treatment regardless of ability to pay. And he wrapped it up by saying that no government agency could offer hope like the private, charitable system gave his family.

From the outside - and knowing only what Cox revealed publicly - Jeannie's case looks like a textbook example of what is wrong with the current system. Her entire coverage depended on the most affordable plan offered by her employer - coverage that was adequate for most people in most years but was virtually useless when the worst case happened.

Yet no one wanted to deprive this young mother of her slim hope of survival, so the doctors and hospital continued with expensive treatment. Those compassionate providers decided to shift the cost of Jeannie's treatment to other patients and their insurance companies. Cox called this a form of "wealth redistribution" because it increases the premiums that insured patients and their employers pay. But enough of that kind of wealth redistribution will price more people out of the insurance market, creating a vicious cycle until there are not enough insured patients on whom to shift the cost of the uninsured. It's a sort of a Ponzi scheme that will eventually collapse under the weight of its own compassion.

In fact, the system is already collapsing. For every case like Jeannie's, there's another case in which uninsured does, in fact, mean untreated. (Cory Cox admitted as much in his essay. "Sure," he wrote, "health insurance companies do influence the type of treatment given and some people do not get medical care because they have no insurance.")

While Cox's experience led him to conclude that the federal government should stay out of the health care business, his words reinforce in my mind that something radical is necessary. It seems to me that what is most desperately needed is mandatory catastrophic coverage for all legal residents of the United States, regardless of age, medical history or place of employment. A sort of Medicare for all, but with a very high deductible - I'm thinking $25,000 or thereabouts - so that it serves as a safety net rather than a first line of defense.

The private insurance industry could continue to operate below that level, with a variety of products available for individuals, families and employee groups. More affluent Americans could afford better insurance with lower deductibles, and some lower-income families still might have to declare bankruptcy because of medical bills. But the uncollectible costs shifted to the rest of us would be much smaller, and there would be no more million-dollar write-offs.

Yes, I'm talking about another socialistic government program like the most wildly popular ones we already have. Just as Social Security and Medicare have saved hundreds of millions from destitute old age without destroying the fabric of American capitalism, mandatory catastrophic health insurance could save millions of families from overwhelming medical bills without turning the United States into Britain. This country can't afford for ideology to trump practicality on something as vital as health insurance.

Gwen Moritz is editor of Arkansas Business. E-mail her at gmoritz@abpg.com.