Tom Daschle is a former U.S. Senator and Senate majority leader from South Dakota. He is currently a special policy advisor at the law firm Alston & Bird LLP, a visiting professor at the Georgetown Public Policy Institute, and a Distinguished Senior Fellow at the Center for American Progress.

Jeanne M. Lambrew is an associate professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas. Dr. Lambrew is also a senior fellow at the Center for American Progress. Previously, she worked on health policy at the White House as the program associate director for health at the Office of Management and Budget (OMB) and as the senior health analyst at the National Economic Council.

Scott S. Greenberger, a former staff reporter at The Boston Globe, is a writer and consultant at Ricchetti, Inc., in Washington, D.C.

Excerpt

Before exploring my idea in detail, it’s worthwhile to review the current state of affairs. By almost any measure, the situation is grim. We like to boast that we have the highest standard of living in the world, and yet at the dawn of the twenty-first century, we are the only industrialized nation that does not guarantee necessary health care to all of its citizens. It is stunning and shameful. There are about 47 million Americans without health insurance, and researchers have estimated that about four-fifths of them are either employed or members of a family with an employed adult.1 An additional 16 million people are “underinsured,” or have coverage that would not protect them from catastrophic medical expenses.2 Simply put, an increasing number of Americans lack health insurance because they—and their employers—just can’t afford it.

Only 65 percent of people earning less than $10 an hour are offered health insurance at work. Furthermore, as health-care costs have exploded, many employers who offer coverage have reduced the portion of the premiums they cover. As a result, many working people can’t afford coverage even when it is made available to them. Other firms are eliminating coverage for prescription drugs, dental care, vision care, and care of dependents.3 And it isn’t just low-wage workers or the unemployed who are in danger: Statistics show that more middle-class people—families with annual incomes of $50,000 or more—are joining the ranks of the uninsured. Today, 18 million of the roughly 47 million people without insurance have family incomes that exceed $50,000.4

Vicki H. Readling, a fifty-year-old real estate agent and breast cancer survivor from Salisbury, North Carolina, knows this all too well. Real estate agents are independent contractors, so Readling doesn’t have medical coverage through an employer. She earned about $60,000 in 2006, a solidly middle-class salary in the Piedmont region of her state. But because of her medical history, the only policy Readling could find on the individual insurance market would have cost her more than $27,000 a year, far more than she could afford. She delays visits to the doctor and makes her $300-a-month cancer medication last longer by taking it only three or four times a week instead of every day. “I really try to stay away from the doctor because I am so scared of what everything will cost,” Readling said in an interview with The New York Times. “Why am I being punished? I just don’t understand how I could have fallen through this horrible, horrible crack.”5

More than 16 percent of our economy, or $2 trillion, is spent on health care. On a per person basis, Americans spent more than $6,100 on medical care in 2004, more than twice the industrial world’s average and about 50 percent more than the next most expensive country, Switzerland.6 This disparity is even more striking when one considers that in every other industrialized country, every citizen is covered. Between 2000 and 2007, U.S. health premiums have risen 98 percent, while wages have increased by only 23 percent. The average family health insurance policy now costs more than the earnings of a full-time, minimum-wage worker.7 No wonder medical bills are the leading cause of bankruptcy in the United States, accounting for about half of them. Incredibly, one fifth of working-age Americans—both insured and uninsured—have medical debt they are paying off over time. More than two-fifths of these people owe $2,000 or more.8

Representing South Dakota, where incomes are lower than in most other states, I encountered many families who were struggling to pay their medical bills. One woman who made an especially vivid impression on me was Donna S. Smith, one of the thousands of Americans who literally have been driven to bankruptcy by our health-care system. Smith isn’t a deadbeat or a slacker—far from it. During the early years of her marriage, she stayed at home to care for her six children while her husband Larry worked as a machinist. When their youngest child was two, Donna decided to go back to work.

At thirty-one, discouraged by a series of minimum-wage jobs, she enrolled in college courses while still working full-time as a bank teller. Eventually she earned a bachelor’s degree from Colorado College in Colorado Springs—graduating cum laude and Phi Beta Kappa. I met her when she was working as a journalist for one of our South Dakota newspapers.

Donna and Larry always had health insurance for themselves and their children—they even carried disability insurance—but that didn’t shield them from financial ruin once they encountered serious health problems. After Larry developed coronary artery disease in the early 1990s, he could no longer work as a machinist. Instead, he did light maintenance work, delivered pizza, and toiled as a cashier, earning far less than he had before.

The financial pressure mounted after Donna was diagnosed with uterine cancer in 1999. Just weeks after undergoing surgery, she returned to her job caring for disabled children in a group home because she desperately needed the income, and she feared that if she stayed away too long she’d lose the job and the health coverage that went with it. She wore an abdominal brace and a back belt to protect her incision site, but those precautions didn’t prevent her from developing an abdominal hernia, and she had to have surgery again in the summer of 2000.

Donna recovered, but the family’s premium payments, drug costs, and co-payments went through the roof. By 2003, their monthly medical expenses were more than $1,000, and Larry’s continuing health problems frequently forced him to miss work. The Smiths did what they could to stay afloat. They bought food and other household goods on credit, and borrowed money against their cars. When things got truly desperate, they visited a local food pantry and tapped family and friends for help.

They sold their house, but the sale netted them a paltry $8,000. In the spring of 2004, Larry lost his job at a casino because he could no longer do any heavy lifting. With bill collectors practically beating down their door, the Smiths declared bankruptcy. Two years later, the couple was forced to move in with their grown daughter and her family in Denver. “The life we worked so hard to build and the life we fought to save was lost. We had failed. The health-care system had crushed us,” Donna Smith told House members during a hearing held in July 2007. After telling her story, Smith chastised the lawmakers for failing to do something about our broken health-care system.

I am so angry with you. I lived the American dream as my father taught me and as his father taught him. I worked, I educated myself, I voted, I bought a home and then moved up into a better home, I raised my children responsibly and I served in my community—and you left me broken and battered because you failed to act on health-care reform. Just as I have come out of the shadows of economic ruin and shame, so too will others come forward to hold you accountable. Remember the hardworking people who elected you. Their bankruptcy shame due to medical crisis really is your shame.9

I have heard similar stories from other people in South Dakota and across the country. Donna’s testimony was notable for its eloquence, but her story is far from uncommon.

Americans with solid, employer-based insurance may believe they are secure, but in our health-care system everyone is just a pink slip, a divorce, or a major illness away from financial disaster. A 2005 study on the link between medical costs and bankruptcy found that “even brief lapses in insurance coverage may be ruinous and should not be viewed as benign,” and that even people with insurance can be forced into bankruptcy by high medical bills, because “many health insurance policies prove to be too skimpy in the face of serious illness.” Medical debt affects health, families’ economic security, and even their jobs. The same study recounted a story that illustrates this:

For instance, one debtor underwent lung surgery and suffered a heart attack. Both hospitalizations were covered by his employer-based insurance, but he was unable to return to his physically demanding job. He found new employment but was denied coverage because of his preexisting conditions, which required costly ongoing care. Similarly, a teacher who suffered a heart attack was unable to return to work for many months, and hence her coverage lapsed. A hospital wrote off her $20,000 debt, but she was nonetheless bankrupted by doctors’ bills and the cost of medications.10

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Excerpts

Excerpt

I have heard similar stories from other people in South Dakota and across the country. Donna’s testimony was notable for its eloquence, but her story is far from uncommon.