Sunday, December 7, 2008

When a Job Disappears, So Does the Health Care

When a Job Disappears, So Does the Health Care

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As jobless numbers reach levels not seen in 25 years, another crisis is unfolding for millions of people who lost their health insurance along with their jobs, joining the ranks of the uninsured.

The crisis is on display here. Starla D. Darling, 27, was pregnant when she learned that her insurance coverage was about to end. She rushed to the hospital, took a medication to induce labor and then had an emergency Caesarean section, in the hope that her Blue Cross and Blue Shield plan would pay for the delivery.

Wendy R. Carter, 41, who recently lost her job and her health benefits, is struggling to pay $12,942 in bills for a partial hysterectomy at a local hospital. Her daughter, Betsy A. Carter, 19, has pain in her lower right jaw, where a wisdom tooth is growing in. But she has not seen a dentist because she has no health insurance.

Ms. Darling and Wendy Carter are among 275 people who worked at an Archway cookie factory here in north central Ohio. The company provided excellent health benefits. But the plant shut down abruptly this fall, leaving workers without coverage, like millions of people battered by the worst economic crisis since the Depression.

About 10.3 million Americans were unemployed in November, according to the Bureau of Labor Statistics. The number of unemployed has increased by 2.8 million, or 36 percent, since January of this year, and by 4.3 million, or 71 percent, since January 2001.

Most people are covered through the workplace, so when they lose their jobs, they lose their health benefits. On average, for each jobless worker who has lost insurance, at least one child or spouse covered under the same policy has also lost protection, public health experts said.

Expanding access to health insurance, with federal subsidies, was a priority for President-elect Barack Obama and the new Democratic Congress. The increase in the ranks of the uninsured, including middle-class families with strong ties to the work force, adds urgency to their efforts.

“This shows why — no matter how bad the condition of the economy — we can’t delay pursuing comprehensive health care,” said Senator Sherrod Brown, Democrat of Ohio. “There are too many victims who are innocent of anything but working at the wrong place at the wrong time.”

Some parts of the federal safety net are more responsive to economic distress. The number of people on food stamps set a record in September, with 31.6 million people receiving benefits, up by two million in one month.

Nearly 4.4 million people are receiving unemployment insurance benefits, an increase of 60 percent in the past year. But more than half of unemployed workers are not receiving help because they do not qualify or have exhausted their benefits.

About 1.7 million families receive cash under the main federal-state welfare program, little changed from a year earlier. Welfare serves about 4 of 10 eligible families and fewer than one in four poor children.

In a letter dated Oct. 3, Archway told workers that their jobs would be eliminated, and their insurance terminated on Oct. 6, because of “unforeseeable business circumstances.” The company, owned by a private equity firm based in Greenwich, Conn., filed a petition for relief under Chapter 11 of the Bankruptcy Code.

Archway workers typically made $13 to $20 an hour. To save money in a tough economy, they are canceling appointments with doctors and dentists, putting off surgery, and going without prescription medicines for themselves and their children.

Archway cited “the challenging economic environment” as a reason for closing.

“We have been operating at a loss due largely to the significant increases in raw material costs, such as flour, butter, sugar and dairy, and the record high fuel costs across the country,” the company said.

At this time of year, the Archway plant would usually be bustling as employees worked overtime to make Christmas cookies. This year the plant is silent. The aromas of cinnamon and licorice are missing. More than 40 trailers sit in the parking lot with nothing to haul.

In the weeks before it filed for bankruptcy protection, Archway apparently fell behind in paying for its employee health plan. In its bankruptcy filing, Archway said it owed more than $700,000 to Blue Cross and Blue Shield of Illinois, one of its largest creditors.

Richard D. Jackson, 53, was an oven operator at the bakery for 30 years. Mr. Jackson and his two daughters often used the Archway health plan to pay for doctor’s visits, imaging, surgery and medicines. Now that he has no insurance, he takes his Effexor antidepressant pills every other day, rather than daily, as prescribed.

Another former Archway employee, Jeffrey D. Austen, 50, said he had canceled shoulder surgery scheduled for Oct. 13 at the Cleveland Clinic because he had no way to pay for it.

“I had already lined up an orthopedic surgeon and an anesthesiologist,” Mr. Austen said.

In mid-October, Janet M. Esbenshade, 37, who had been a packer at the Archway plant, began to notice that her vision was blurred. “My eyes were burning, itching and watery,” Ms. Esbenshade said. “Pus was oozing out. If I had had insurance, I would have gone to an eye doctor right away.”

She waited two weeks. The infection became worse. She went to the hospital on Oct. 26. Doctors found that she had keratitis, a painful condition that she may have picked up from an old pair of contact lenses. They prescribed antibiotics, which have cleared up the infection.

Ms. Esbenshade has two daughters, ages 6 and 10, with asthma. She has explained to them why “we are not Christmas shopping this year — unless, by some miracle, Mommy goes back to work and gets a paycheck.”

She said she had told the girls, “I would rather you stay out of the hospital and take your medication than buy you a little toy right now because I think your health is more important.”

In some cases, people who are laid off can maintain their group health benefits under a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1986, known as Cobra. But that is not an option for former Archway employees because their group health plan no longer exists. And they generally cannot afford to buy insurance on their own.

Wendy Carter’s case is typical. She receives $956 a month in unemployment benefits. Her monthly expenses include her share of the rent ($300), car payments ($300), auto insurance ($75), utilities ($220) and food ($260). That leaves nothing for health insurance.

Ms. Darling, who was pregnant when her insurance ran out, worked at Archway for eight years, and her father, Franklin J. Phillips, worked there for 24 years.

“When I heard that I was losing my insurance,” she said, “I was scared. I remember that the bill for my son’s delivery in 2005 was about $9,000, and I knew I would never be able to pay that by myself.”

So Ms. Darling asked her midwife to induce labor two days before her health insurance expired.

“I was determined that we were getting this baby out, and it was going to be paid for,” said Ms. Darling, who was interviewed at her home here as she cradled the infant in her arms.

As it turned out, the insurance company denied her claim, leaving Ms. Darling with more than $17,000 in medical bills.

The latest official estimate of the number of uninsured, from the Census Bureau, is for 2007, when the economy was in better condition. In that year, the bureau says, 45.7 million people, accounting for 15.3 percent of the population, were uninsured.

M. Harvey Brenner, a professor of public health at the University of North Texas and Johns Hopkins University, said that three decades of research had shown a correlation between the condition of the economy and human health, including life expectancy.

“In recessions, with declines in national income and increases in unemployment,” Mr. Brenner said, “you often see increases in mortality from heart disease, cancer, psychiatric illnesses and other conditions.”

The recession is also taking a toll on hospitals.

“We have seen a significant increase in patients seeking assistance paying their bills,” said Erin M. Al-Mehairi, a spokeswoman for Samaritan Hospital in Ashland. “We’ve had a 40 percent increase in charity care write-offs this year over the 2007 level of $2.7 million.”

In addition, people are using the hospital less. “We’ve seen a huge decrease in M.R.I.’s, CAT scans, stress tests, cardiac catheterization tests, knee and hip replacements and other elective surgery,” Ms. Al-Mehairi said.

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