Katie Hebert, age 4, is a very sick little girl. She gets severe seizure-like attacks that can last 11 hours from an undiagnosed neuro-developmental disorder. She is deaf in one ear, has a feeding disorder and requires daily medication for asthma. In her short life, she has been rushed to the emergency room six times and hospitalized twice. Her health was put at even greater risk when she lost her health coverage -- which meant no more regular doctor's visits, weekly therapy or attention from specialists.
To deal with this crisis, Katie's father tried to buy private insurance, but he couldn't afford the roughly $1,000 a month, about 30 percent of his salary, to pay for the insurance plan offered by his employer. And even if he could have afforded the insurance, it would not have covered all of Katie's health needs. On top of that, other private insurers would not accept Katie in their programs because of her pre-existing conditions.
The only alternative was the Texas Children's Health Insurance Program (CHIP). But her father made $260 a month above the limit that would enable Katie and her older brother, Nathan, 7, to qualify for CHIP. Mr. Hebert is a reliable worker who has helped maintain the computers for a banking system in Pasadena, Texas, over the last six years. He requested a voluntary pay cut in an already modest income so his children could get insurance, but his employer didn't respond. The family eventually spent down its income by paying for unnecessary child care to become financially eligible for CHIP. That wasn't the end of it, however. When Katie's father got an automatic three percent cost of living raise in December, the family's income once again exceeded the CHIP limit, this time by $20.54 a month. During the period that her father went through the process of having his wages lowered, Katie was without health coverage -- again.
Katie is one of millions of children in working families who face impossible barriers to obtaining health coverage imposed by insurance companies that make enormous profits and pay their CEOs and top managers fat compensation packages. They have the power to decide who gets coverage, what medical treatment they'll pay for, and they set the prices for coverage. The premiums these companies charge and the restrictions they impose are major reasons why 46 million Americans are without health insurance today -- including nine million children.
Insurance companies' massive profits and outsized executive salaries are largely made possible by soaring premiums, high deductibles and rising co-pays that put private health insurance beyond the reach of many moderate- and middle-income families. The average annual family insurance premium in 2008 was more than $12,500 or above $1,000 each month. Since 2001, the cost of family coverage from an employer climbed by almost 80 percent, compared with only a 24 percent rise in workers' earnings. Uninsured and underinsured Americans have had to bear the financial burden of high medical costs. About half the people in the United States with homes in foreclosure and a large portion of those who have filed for bankruptcy have named medical expenses as a cause.
There are a variety of ways insurance companies boost their profits while limiting payouts to cover health care costs for people they insure. Insurance companies routinely deny coverage to people like Katie with pre-existing medical conditions. They also refuse to cover those they think will become ill in the future. In these cases, the cost of treatment may come to tens of thousands of dollars that must be borne by the family as out-of pocket expenses. Individual health insurance policies bought by people who are self-employed or not covered through their employer are among the most expensive and frequently the most restrictive.
All of these restrictions harm insurance policy holders and increase the bottom line of insurance companies while decreasing the choices of families that work hard and play by the rules but never feel secure that their children will have health coverage from one year to the next. Congress must establish a strong public health insurance plan if we are to give families choices and foster competition in the private health insurance market that will bring escalating health care costs down. Why should we continue to let children fall between the chasm of profit-driven health insurance companies -- some pay their CEOs between $10 and $30 million annually -- and income-restrictive Medicaid and CHIP programs that are different in each of the 50 states?
Children need urgent help and all of us must act now to ensure that all children have access to affordable, comprehensive health coverage, wherever they live in whatever family. Our fragmented system of health coverage for children allows too many of them to go without the critical health services they need. God did not create two classes of children. Our children simply can't wait any longer. Let's make sure Congress hears this from us.
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CDF's goal is to provide affordable, comprehensive health coverage to everyone this year--especially children. Join Marian Wright Edelman for a live webcast to learn how you can step up and take action at this crucial time for our nation. Sign up and submit a question: www.childrensdefense.org/may12webcast.