HEALTH CARE/Joan Retsinas

Underinsured Beneath Iceberg

If the "uninsured" -- almost 44 million of them -- constitute a health care iceberg, one that may in time catapult the American health care system, or derail it off its employment-based course, then the "underinsured" constitute the mass beneath the iceberg.

Although some analysts peg the number of underinsured as equivalent to the number of uninsured, we have no good data. Indeed, most of the underinsured won't know that their HMO card is a weak bulwark against financial catastrophe until an illness meets a cap, a "not covered" codicil, or an insurer's judgment.

Many insurers have capped their liability. The lower the cap, the cheaper the premium -- and the more enrollees whose expenses will exceed the cap. A bypass operation, a spinal cord injury, a regimen of chemotherapy -- all will exceed a not-uncommon $25,000 annual cap. In the best of all worlds, the patient will get the needed treatment, and the hospital will be left with a blip in its "uncompensated care" column. Alternately, the patient will receive the treatment, and be left with an onerous monthly payment for the rest of his life. In the worst of all worlds, the patient will delay treatment.

A cap is overt; a "not covered" is buried in the fine print of a policy. The patient may be covered for a range of conditions and treatments -- but not the one recommended. The patient with diabetes will not be eligible for a pancreas transplant. The patient with a brain injury will be covered for acute-care hospitalization, but not post-discharge rehabilitation. One survey showed that 52 percent of insured children who needed plastic surgery to correct anomalies (like cleft palates) had no coverage for the procedure. We have no standard benefits package. Since most large employers self-insure, they custom-design their policies, from more to less inclusive; and enrollees rarely know how inclusive their policy is until they need treatment.

Beyond a policy's fine print is the determination of "medical necessity." The phrase itself is amorphous, sometimes bending to the dictates of a plan's bottom line. In fact, patients alarmed at their plans' denials have complained to state legislatures, to medical boards, and to lawyers. On appeal, most patients will win -- pointing to the shaky underpinnnings of many insurers' initial denials.

Some of the underinsured do recognize their plight: they are the enrollees with "pre-existing exclusion" clauses. When they signed on with their HMO, it excluded treatment for any condition (or related condition) that they had at the time. Exclusions can last from 6 months to as long as 2 years. Under the federal Kennedy-Kassebaum legislation, if an insured person switches insurers, the new insurer cannot exclude treatment for pre-existing conditions. Insurers, though, can apply those exclusions to the newly-insured. The consequences are cruel. If an enrollee with cystic fibrosis breaks his leg, the insurer will cover treatment. If that same enrollee is hospitalized because of the cystic fibrosis, the plan will not pay.

Indeed, the gaps in insurance coverage put physicians in a Catch 22: If they stick to the letter of the law and record a diagnosis correctly, their patient may not get treatment. If they falsify the record, their patient gets treatment &endash;- but the physician has broken the law. The Hippocratic Oath versus the government. In a survey of 1,129 physicians, 39 percent admitted to deceiving an insurer; and 28 percent called "gaming the system" essential to providing quality care. Some physicians consider "gaming the system" a sort of covert advocacy.

Last year more than 1 million Americans filed for bankruptcy. Half did so because of illness. The problem wasn't so much that they didn't have health insurance. They were underinsured. So are lots of us.

Retsinas is a sociologist who writes about health care from Providence, Rhode Island.

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