Two years ago, I wrote about the American health-care system's diligent efforts to kill a Texas man named Matthew Stewart through five-figure bills and strangling red tape. He has an autoimmune liver disease, which nearly resulted in his death. He was saved by a hospital he later discovered was out-of-network. Thanks to a loophole in ObamaCare regulations, that meant he faced bills of nearly $70,000 he couldn't pay. And because he couldn't get insured properly on the ObamaCare exchanges, he faced the dire prospect of being uninsured with a life-threatening illness.
Well, I've got good news: Matthew escaped from Texas by the skin of his teeth and has moved to New York, where he gets reasonably good care.
Why are things better in New York? Good old Big Government, in the form of Medicaid. It's an excellent demonstration of how socialist health care saves lives. It turns out that sick people do better when they can get the care they need for free at the point of access. Unfortunately, it's also a demonstration of the limitations of non-universal health care. To stay covered, Matthew has to stay in near-poverty.
Just a few years ago, Matthew was a healthy young grad student, an avid hiker, happily married to a teacher and living in his own house. After he developed liver disease and nearly died in 2016, he could no longer work and had to drop out of school. But he still had to scale a mountain of bureaucracy to keep getting the treatments he needed to live — in particular, the quarterly surgical procedures necessary to stay ahead of the disease.
With his mountain of debt, bankruptcy was the only way out, but merciless means tests in the process meant he had to wait months for his income — calculated on a rolling average — to decline enough to qualify after withdrawing from school. Then, because Texas didn't accept the ObamaCare Medicaid expansion, even if he could qualify for disability and get a small benefit he still couldn't get on Medicaid in that state, because his wife made too much money.
He knew he needed to move across the country for better care — but there was even a hitch in that plan. He would have to stay in Texas until July 2018 to be able to sell his only major asset, his house, without paying a big tax penalty. With resources so low, he needed every dollar he could get to pay for his care.
Matthew would have to stay in Texas for over two years and somehow scrounge together health insurance. Because the ObamaCare exchange plans had no affordable coverage for his condition, Matthew's only option was to get on his wife's insurance through the Texas Teacher Retirement System (administered by Aetna). This was extremely poor coverage. With him on the plan premiums jumped from about $250 to over $1,000, with another $250 for co-pays on all his medications. Then whenever he had to have his surgical procedure, the hospital demanded 50 percent of what they said he owed up front — typically $1,500, but sometimes nearly $3,000.
What's more, while his hospital was in-network, "often the X-Ray techs, ER staff, and anesthesiologists are out of network," he says. The hospital told him that insurers typically count such staff as in-network anyway, but when he sent a petition to Aetna he says they blew him off. "I filled that out, mailed it in, never heard another thing and they kept sending me bills for the anesthesiologist at the same price as before," he says. That was another roughly $700-$900 per procedure.
A representative from the hospital sent the following statement: "While the majority of physicians on our staff are not employees ... we have worked with providers in an effort to align with payers’ networks so that we can meet our patients’ needs for high quality care at an affordable cost. In this instance, we do not have enough information to be able to address the circumstances surrounding medical care provided or a resulting bill." Insurer Aetna declined to comment.
At any rate, after working out payment plans, Matthew was paying about $2,000 per month for health care, all told. After those expenses, he calculated that his wife — who has a master's degree — was making about $10 an hour in take-home pay.
By April 2017 he managed to successfully get through the disability bureaucracy, and thus qualify for a meager SSDI benefit. But in April 2018 he says they promptly kicked him off again. He opted not to appeal, figuring it was hopeless, and in any case "we could not afford another lawyer," he says. Despite being in fact disabled by any reasonable definition, he only got one year of benefits.
It was a near thing. After my previous article and radio interview, Matthew did a GoFundMe campaign (which I posted on social media) and raised about $5,000 — minus fees amounting to about 9 percent of the total. This is actually a fairly small haul for medical GoFundMe fundraising, which has become a major source of pseudo-insurance in the U.S. Over 250,000 medical fundraisers are posted there annually, and about one-third of the $5 billion raised through the platform has been dedicated to medical needs.
Even the CEO of GoFundMe, Rob Solomon, says he is disturbed by this situation. "I would love nothing more than for 'medical' to not be a category on GoFundMe," he told Kaiser Health News. "We firmly believe that access to comprehensive health care is a right and things have to be fixed at the local, state, and federal levels of government to make this a reality."
I have precisely zero regrets about indirectly helping Matthew cover some bills. But how many others in similar situations have failed to reach their fundraising goal, because their stories were not sympathetic enough, or they were no good at online marketing, or had no high-profile connections? Some 90 percent of GoFundMe campaigns fail to meet their targets, according to a recent study. A man named Shane Boyle died of diabetes complications when his $750 fundraiser to pay for insulin fell $50 short.
Nevertheless, that $5,000 probably tipped the balance between Matthew making it out of Texas or having to stay. It "was the difference between me being here and not, most likely," he says. It allowed him to make ends meet for long enough to sell his house, pack his life up, and move to New York.
New York has a Medicaid supplement called Medicaid Essential. Basically it is just like ordinary Medicaid, except administered by private insurers, and available for people between 138 and 200 percent of the poverty line on a sliding subsidy scale depending on income (plus people who are not eligible for traditional Medicaid due to immigration status).
"Medicaid is good," says Matthew. Once you jump through the admission hoops, the coverage is dirt-cheap. "We ended up in the third tier of the Essential plan, which makes doctors visits, prescriptions, and pretty much every inpatient and outpatient procedure $0, $1, or $3."
The service is fine as well, with wait times similar in his town of about 30,000 as in the Dallas-Fort Worth metro area. The surgical process is even better. With zero point-of-service costs, "I didn't have to waste a half hour plus in the lobby before the procedure haggling with a billing agent over what I can pay today and what I can promise to pay tomorrow," he says. This "eliminates a huge stress for us, among other things, and really actually helped keep me calm before the procedure happened."
This is the dream of socialist health care — where if you become sick, you simply go to the doctor, and you don't have to fuss with coverage, networks, co-pays, or any of that other garbage, because the government takes care of everything in the background. A 1948 British pamphlet explaining the rollout of the National Health Service said:
It will provide you with all medical, dental, and nursing care. Everyone — rich or poor, man, woman or child — can use it, or any part of it. There are no charges, except for a few special items. There are no insurance qualifications. But it is not a "charity." You are paying for it, mainly as taxpayers, and it will relieve your money worries during times of illness. [NHS]
That last sentence is immensely more true today in this country than it was in the U.K. then, due to the endlessly skyrocketing cost of American health care.
However, Matthew has also found some serious downsides with the New York program. For one thing, his private insurer changed his insulin, probably due to supplier contracts. He had to run to his doctor and get new prescriptions — a hassle, but also not the way medication is supposed to be chosen.
There is also welfare stigma. "I know there are people who think we're gaming the system or whatever, being freeloaders, a burden, all of this," he says. From his perspective, of course, he was just taking the only option available to get life-saving care.
Of course, Matthew and his wife would like to find well-paying jobs — indeed, they could badly use more income — and thus paying more in taxes to support the system. Matthew is still sick, but his wife is a highly qualified teacher and would love to get back into teaching. But this would be hellishly risky, because there is no guarantee her insurance would be as good as Medicaid.
This illustrates the worst part of Medicaid — the means test. Making that one additional dollar that puts them over the Medicaid limit could easily mean a huge decrease in income, as they are forced back into the world of huge premiums, co-pays, deductibles, co-insurance, out-of-network providers, and so on. This sort of thing causes enormous churn in Medicaid coverage: In a Michigan study, only 62 percent of people on Medicaid were still on it a year later — while fully 30 percent lost coverage altogether for some time.
"If our income was $40,000 per year, we're now failing the means test, but our health-care costs potentially skyrocket, so we're effectively at the same place or worse, having worked much harder for it," Matthew says. They'd want to jump far up into the upper-middle class in a single year, to provide as much income cushion as possible, but that's easier said than done. But even then, if they were truly unfortunate, it could easily bankrupt them again.
But that in turn worsens the stigma: "We know for a fact that people who need Medicaid-quality health-care access do not get it because they are slightly over the income limits. And when you're the one on the wrong side of the means test, there is resentment about it," he says. No doubt!
Conservative economists often whine about the disincentive effects of top marginal tax rates (that is, taxes on the next dollar of potential income). But the people who actually face constraining marginal taxes in the American system — often trapping people in poverty or near-poverty, instead of a slightly less outlandish executive salary — are people like Matthew. How many other people could make plenty more money, but choose not to for fear of being sucked into the insurance nightmare?
The American health-care system is such a dystopian tangle of complexity, failure, and outright fraud that it is easy to lose sight of how easy in principle it would be to fix. Indeed, we have already largely done it for the elderly and the poor — and the main problems with those programs has to do with their eligibility requirements. Just upgrade, combine, and extend those programs to cover all Americans. Do it directly without bothering with private companies, especially their need for profit. Everyone could have the same security and peace of mind that Matthew now enjoys — and without needing to fuss around with means tests or other such nonsense.
Doesn't that sound nice?