Unhealthy numbers: Bankruptcies, uncontrolled costs argue convincingly for health-care reform

At a glance, the plight of these 47 million appears to be much if not most of what needs fixing. But, as Chronicle business columnist Loren Steffy observes in his column this past Sunday (“Insured but not covered”), things are far from copacetic for those millions of Americans supposedly adequately covered by health plans through their employers.

They are not. As Steffy puts it, this umbrella leaks, and thousands of families are going under financially because their health insurance does not perform as advertised. Steffy cites a study in the American Journal of Medicine showing that two-thirds of all bankruptcies over the past six years were related to medical expenses, and that a surprising three-fourths of those filing for bankruptcy for medical-related reasons had medical insurance when they did so.

Or perhaps this is not so surprising. Certainly it will not astonish anyone who has attempted to navigate the maze of co-pays, deductibles, explanations of benefits and frequently inscrutable bills from hospitals, laboratories and other care providers. For the unwary and uninformed health-care consumer, these can all be a source of emotional and financial stress on top of whatever medical condition may afflict them or a family member.

Harvard Professor David Himmelstein , author of the study mentioned above, doesn’t mince words. “Private health insurance is a defective product, he says, “akin to an umbrella that melts in the rain .”

The notion of competition in the health-care insurance industry is mostly myth, Himmelstein contends. For most consumers, the choices are limited by what their employers offer and at what cost they choose to offer it. For some lucky ones the choices may be made broader by the option of insuring through a spouse.

Read more at the Houston Chronicle