By Jean P. Fisher, The News & Observer, Raleigh, N.C. Knight Ridder/Tribune Business News
Jul. 11--Eighty percent off sounds like a great deal. But if the starting price is high enough, even 20 percent can be too much to part with. Alfred Smith of Zebulon doesn't have much choice.
Smith, 57, suffers from kidney failure. He's on the transplant list at Duke University Health System, and he hopes to have his worn-out organs replaced with a healthy donated kidney as soon as one becomes available.
Because he is disabled, Smith qualifies for Medicare, which will pay for 80 percent of the $100,000 operation. It's never clear exactly how much the patient will owe because of the complexities of medical billing and coverage, but Smith figures he should be prepared to be responsible for as much as $20,000.
It's an amount that Smith says he isn't even close to being able to pay. He was forced to quit his job as a wastewater treatment operator at a Knightdale manufacturing plant three years ago when he began dialysis treatments.
The surgery would take place regardless, but Smith is trying pull together at least some of the money by asking for donations. He's got some time to work on it. Smith said he likely will have to wait at least two more years before a kidney becomes available from an anonymous donor. The transplant would come sooner if a living donor volunteers to give him a kidney.
'There is no way I can do this on my own,' said Smith, who gets by on monthly disability benefits of just over $1,300. 'I'm living paycheck to paycheck.'
Smith's case is an extreme one.
But paying medical bills is a struggle for millions of Americans -- including people who have health coverage through Medicare or private insurance. And it's probably going to get worse as health-care costs soar and budget-conscious employers shift more of the financial responsibility to workers.
About 20 million U.S. families had problems paying medical bills in 2003, according to a national survey of 25,400 families recently released by the Center for Studying Health System Change. More than two-thirds of families that said they struggled had health insurance.
The center didn't indicate the survey's margin of sampling error. Nor did the survey define what it means to have difficulty paying medical bills.
But families reported situations such as being contacted by collection agencies, postponing a major household purchase such as a car or borrowing money to pay health-care bills. Consumers also said they had to forgo doctor's visits or leave prescriptions unfilled because they had no money to pay or feared racking up additional medical bills.
A similar survey of 4,052 people released in March by the Commonwealth Fund found that 71 million working-age adults had trouble paying medical bills. This survey also did not define 'trouble,' and it did not report its margin of sampling error.
But it found that 44 percent of people who said they struggled used all or most of their savings to pay medical bills, and 20 percent incurred large credit-card debt or had to take a loan against their home to cover health expenses. Just over a fourth of people who had problems paying said they had been unable to pay for basic necessities such as food, heat or rent because of medical bills.
Smith says he already spends a good chunk of his income on medical care. About $300 a month goes to pay for medicine alone. Smith takes pills for high blood pressure and diabetes, a disease that contributes to his kidney problems.
The Raleigh dialysis clinic that treats him accepts Medicare's reimbursement as payment in full, so Smith doesn't face out-of-pocket expenses for the four-hour treatments he must have three times a week. Dialysis flushes waste materials from his bloodstream -- normally the kidneys' job.
Smith recently learned he might qualify for a discount program Duke established in January for people with limited incomes. Based on Smith's annual income, the Duke program could waive its right to collect any of the cost of the transplant from him. Smith plans to show the health system proof of his income by submitting a copy of his disability check stub and other financial documents to see whether he qualifies.
But Smith still fears he won't be able to pay for anti-rejection medicine after his surgery. He hopes people will be willing to donate money to help him pay for the $300-a-month drugs, which he will have to take for the rest of his life. Smith has siblings in Zebulon but said they aren't in a position to help financially.
So Smith set up an account at a Centura bank branch to receive donations, an idea he got after checking out a few organizations for kidney patients. Then he prepared fliers explaining his plight, requesting that donations be mailed directly to the bank. So far, his church has donated $100.
'I've worked in sales, so I'm not shy about asking people for money,' said Smith, who sold cars for a time after leaving his wastewater treatment job. Ultimately, he said it became clear that working was too hard on his health.
Medical inflation and a trend toward higher out-of-pocket costs for consumers are making it harder for all patients to keep up with medical bills. Costs for physician and hospital care, medical technology and medicines have been rising by 10 percent or more for at least the past four years and show few signs of slowing.
Medicare members such as Smith are particularly exposed because there is no cap on what they can be asked to pay out of pocket, unlike most private insurance plans. The lack of a limit on out-of-pocket costs is considered by health insurance experts to be one of the most serious flaws in the federal insurance program.
Employers, who pay for most private health insurance, have been sharing the pain by increasing deductibles, co-payments and other out-of-pocket costs.
'For many people, maybe those increases do not take a big bite, but if you need a lot of health care, it adds up fast,' said Peter Cunningham, a senior health researcher at the Center for Studying Health System Change and co-author of the medical debt study.
According to the survey, about 23 percent of families with out-of-pocket expenses of between $801 and $2,000 said they had trouble paying those bills. And when such costs were more than $2,000 a year, nearly 35 percent of people said they had difficulty paying.
Most industry watchers expect out-of-pocket costs to continue rising. Employers still see passing costs on to workers as the best way to trim soaring increases in health insurance costs, said Steve Graybill, a senior health-care consultant in the Charlotte offices of Mercer Human Resources Consulting.
People who buy their own health insurance are gravitating to higher-deductible plans to save on premiums. That means more money out of consumers' pockets before coverage kicks in.
'What's happening here is that everything is pushing more responsibility to the consumer,' Graybill said. 'It's a hard message.'
PAYMENT TIPS
KNOW YOUR COVERAGE: Review the summary of benefits that describes exactly what is covered by private health insurance. This can be a good starting point to determine eligible care and out-of-pocket expenses. Many health plans also make summaries of benefits available on their Internet sites.
ASK ABOUT HELP: Most hospitals and doctor's offices have professionals on staff to route patients with limited income into programs that may pay for their health care, see whether they qualify for charity care or get them a discounted price. To qualify for such programs, patients usually must submit proof of their income, including copies of check stubs and tax documents. Getting signed up before treatment can reduce a qualified patient's risk of racking up debt.
CHECK FOR ERRORS: Patients can ask for itemized medical bills. After expensive or complex medical care, check billing statements for double billing or charges for care that was not delivered.
SET UP AND USE AN INSTALLMENT PLAN: Most health-care providers say they allow patients to pay large balances over time. Usually, if patients make a reasonable effort to pay, providers will not send them to collections. Failing to pay medical bills can result in a blemish on your credit report.
USE OTHER PROGRAMS: If your company offers flexible spending accounts, you can use one to reduce taxes by setting aside pretax income for many health-care expenses. If you can afford supplemental insurance to cover out-of-pocket medical expenses, think about buying it, especially if you expect to need care.
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