When Being Insured Doesn’t Mean Being Protected

Part Five of a Special Report from CQ Healthbeat

As the drive for an overhaul gains momentum, consumer advocates have been recounting horror stories of people facing devastating medical costs: a breast cancer patient struggling to pay more than $30,000 she owes her doctors; a couple losing their home to foreclosure after paying for their daughter’s treatment for a chronic disease; a prostate cancer survivor having to forgo annual screenings because he can’t afford them.

Though much of the discussion has centered on the need to cover the nation’s 46 million uninsured, the people behind these particular stories are examples of a different problem. They’re all insured; their policies just aren’t comprehensive enough to protect them from potentially crushing bills.

As costs rise and employer benefits become weaker, the phenomenon of “underinsurance” has become increasingly common, patient advocates say. About 25 million Americans had inadequate health coverage in 2007, according to one widely cited estimate by the Commonwealth Fund, a foundation that supports health care research.

The problem is giving rise to one of the central questions lawmakers face as they tackle an overhaul of the system: Exactly what needs to be covered by an insurance policy, and how far should the federal government go in mandating the specific details?

“The policy issue we’re facing as a country is that we’ve never put a floor under insurance benefits and said, at a minimum, a policy has to be broad in scope,” said Cathy Schoen, senior vice president at the Commonwealth Fund. “There are still policies on the market that don’t protect you from high costs. We’ve never done basic insurance standards.”

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