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No guarantees: 3 tales of insurance disaster readers reveal that even good health insurance is no guarantee of covered care. Three families found that their coverage wasn’t enough, that it didn’t exist when they needed it most, or that it ended with the loss of a job.

As the mother of a toddler who survives only because of the breathing tubes up his nose, the feeding tube in his gut, and the expertise of doctors in three cities, Courtney Elliott is keenly aware of the high costs of medical care — in every sense of the word.

Until her son, Linden, 2, was born with mitochondrial disease, a rare genetic disorder, the 28-year-old Tennessee woman had no idea that a bright, energetic child could hover constantly on the edge of death.

And she certainly didn’t know that a family with good income and excellent health insurance could be devastated by out-of-pocket medical fees that top $25,000 a year.

“We were very naïve, even dumb,” said Elliott, whose husband, Isaac, also 28, is a mechanical engineer with Bechtel Jacobs Co., a government contractor in Oak Ridge, Tenn. “I didn’t even know you had medical debt if you had insurance.”

The Elliotts are not alone. They were among more than 1,200 readers who shared stories of medical billing disasters in response to the site’s Dose of Reality health care series. Like much of the national debate on health reform, many stories focused on the plight of the nearly 46 million Americans who face daunting bills because they have no insurance coverage at all.

‘Why do I have to suffer financially as well?’
More surprising, however, were the tales of medical debt that came from people who said they knew that health insurance was important — and took steps to make sure they had it. For three families in particular, finding out that their medical coverage wasn’t enough, that it didn’t exist when they needed it most, or that it ended with the loss of a job was as shocking as it was shattering.

“You just want to say, ‘It’s bad enough having a kid with a horrible disease, why do I have to suffer financially as well?’” said Elliott.

That distress is shared by Michele and Kevin Thomas, Detroit-area newlyweds who lost their jobs this year to a failing regional and national economy. Michele Thomas had health coverage through her job at a furniture store until she was laid off in April. She was searching for a policy she could afford on her unemployment compensation when she developed a severe gall bladder infection and needed emergency surgery. Now the pair, still searching for work, face $15,000 in bills they can’t pay.

Those worries are echoed by Duane Thayer, a 51-year-old Colorado man who fell off a ladder putting up Christmas lights last year and nearly severed his left foot. He thought he had coverage for nearly $500,000 in medical bills, but he says the insurance company denied his claims, in part for a single late payment and in part because they said the surgery he’d had for a club foot as a child counted as a “pre-existing condition.”

Most coverage comes from jobs
About 159 million people in the United States got their health insurance last year through employer-sponsored health insurance, according to the latest data from the Kaiser Family Foundation. Another 14 million people bought insurance through private plans. Most of the rest who have insurance are covered by the government through Medicaid or Medicare.

For most customers, that system works just fine. But for some, simply having health insurance is no guarantee they can pay for health care, noted Len Nichols, a health economist at the nonpartisan New America Foundation. He’s a vocal advocate for insurance reforms now being crafted in Congress, so long as they make U.S. health care cheaper, more accessible and higher quality than it is now.

In part, the push for health reform is aimed at fixing a health insurance system that can financially ruin Americans who face sudden illness or injury. In 2007, nearly two-thirds of all bankruptcies in the U.S. were tied to medical debt, and nearly 80 percent of those who filed for protection were insured at onset of illness, according to a June study in the American Journal of Medicine.

“Basically, no one’s coverage is secure,” said Nichols. “A large number of people have not had a disaster in the health care system, so they don’t know how bad it is. It could happen to any of us at any time.”

For three families who responded to, it already has. Here are their confirmed tales of medical billing disaster.

Sick child ravages family finances
Before their second child was born, Courtney and Isaac Elliott shunned most things medical and didn’t understand why anyone wouldn’t. They had a healthy little girl, Aniyah, now 5, and good insurance provided by Aetna through Isaac’s job.

“I ate all organic and I never took any medicine and I had a medication-free birth,” said Courtney Elliott, who goes by the nickname “Courey.” “I had my baby at home.”

Linden arrived on Dec. 15, 2006, a dark-haired, dark-eyed baby who within days revealed severe problems. He had trouble breathing and needed surgery to correct a malformed larynx.

He couldn’t swallow well, and breast milk wound up in his lungs instead of his stomach. Within weeks, he needed to be fed solely through a tube. Other puzzling problems emerged as well: He couldn’t regulate his body temperature, he had trouble with motor skills, his bowels didn’t work right.

Results of a muscle biopsy confirmed his parents’ worst fears: Linden had mitochondrial disease, a rare genetic disorder that often leads to severe disability — and death.

“He could live 10 years or he could live 10 days,” Elliott said of Linden’s prognosis.

The disease results from the failure of the mitochondria, the part of human cells responsible for processing oxygen and energy.

It’s a devastating medical diagnosis that conjures for parents an endless cycle of care. And it’s a devastating financial diagnosis as well.

“It’s not possible, emotionally or financially, to prepare to have a child as ill as Linden,” said Linden's specialist, Dr. Mary Kay Koenig, assistant professor of

The family must travel from Tennessee to Texas at their own expense three or four times a year to see Koenig, one of the nation’s few specialists in mitochondrial disease.

At first, the family thought the medical expenses would be no problem. Isaac Elliott earns $72,000 a year at Bechtel Jacobs and his generous insurance covers 100 percent of services after initial co-payments.

But like many families coping with chronic illness, the Elliotts were surprised to learn that the co-pays for Linden’s condition would be extensive, unrelenting  — and a constant financial drain.

“Each time he has a tube change, it’s $150. Each hospital visit is $250. Each emergency room visit is $100. Each surgical procedure is $100,” Elliott said. “In the past 30 days, we’ve had two ER visits, a hospital stay, his prescriptions.”

The Elliotts spend at least $2,000 a month on out-of-pocket costs for Linden’s care, and often more. That leaves little for anything but the most basic family expenses — and sometimes not even those.

“I didn’t pay my electric bill this month and I didn’t pay my gas bill this month,” admits Elliott, who must stay home to take care of Linden. “We live paycheck to paycheck.”

They’ve managed to buy a tidy house in a vine-covered east Tennessee neighborhood thanks to a no-down-payment loan, but their furniture is well-worn and sparse. They rarely eat out, except when they’re in the hospital, and they confine family outings to free trips to playgrounds or parks.

There are times, Elliott adds, when she can’t afford all of Linden’s medications, even with generous help from relatives.

“There’s no worse feeling than having to weigh your child’s needs vs. what you can afford,” she said.

Still, Linden is hardly the sum of his symptoms. The sturdy, 34-pound toddler has a quick smile and verbal skills that test at a 4-year-old’s level.  His vocabulary includes words like “duodenum,” and he proudly shows off his stuffed ape, Chunky Monkey, who also sports a hospital bracelet and a tube in his tummy.

When he gets a little wild, Linden will hitch a ride on his IV stand, scooting with one foot, then rolling down a hospital hallway.

When the deep dimples fade, however, there are often flashes of pain. Linden tires quickly, retreating to the comfort of a pacifier and his mother’s arms.

“Owie!” the toddler cries as a nurse tests his blood to prepare for surgery. “I don’t like pokes!”

An operation on Oct. 12 was aimed at installing a port in Linden’s shoulder to allow fast regulation of his blood sugar. Without it, his glucose level has been vacillating wildly, creating constant risk of coma — or death.

Elliott says she never knows whether to expect a normal day or an emergency. Some children with mitochondrial disease have lived to adulthood, but others die very young.

“I think it’s very difficult for me as a mom to know that there’s nothing I can do,” she said. “I can try my best and he still might die. That is just an incredibly powerless feeling.”

On top of all that worry is the crushing financial burden.

“That’s the kicker,” she said. “You got the crappy end of the lottery and you got a medically fragile child and you’ll have to fight for his life. And now, we’re going to drain you financially, too.”

Health reform could ease the Elliott’s financial worries, if not the medical concerns, said Nichols, the health economist. The proposals under consideration mandating that virtually everyone purchase health insurance could boost the pool of potential payers and allow new limits on out-of-pocket costs.

For the Elliotts, such limits could be far lower than the $25,000 or more a year they now pay.

“You could afford that because you could get everybody in the pool,” Nichols said. “To make the pool reflect the whole population, it’ll be, on average, cheaper.”

Any change would be welcome, said Elliott, who supports a government-funded public health insurance option. 

“If my husband were to lose his job, we’d be broke in a week,” she said, adding later: “So few people understand they could be next.”

Lost job, lost insurance
In the spring, as unemployment rates in the Detroit region topped 22 percent, triple the national rate, 38-year-old Michele Thomas became one of the casualties of a spiraling economy. She was laid off from her job at a furniture store in April, four months after her husband, Kevin Thomas, 43, left his job as an apartment security worker after an intruder threatened him with a gun.

Kevin Thomas had health insurance through a $400-a-month private policy. Michele had good coverage through her work, but that ended when she lost her job. Living only on her unemployment payments of $774 every two weeks, she was still searching for an affordable policy in August, when the pain in her stomach started.

For several days, Thomas tried to ignore the symptoms, but when she started vomiting blood at 1 a.m., her husband insisted on taking her to an emergency room.

“I said, ‘Honey, I don’t have insurance. We can’t go to the ER,’” Thomas said.

When she got there, doctors quickly determined she had a gallstone the size of a golf ball and needed emergency surgery, plus two days’ recovery.

“When we heard ‘surgery,’ we were really panicking,” she said. 

Thomas came through the operation well, but with a $19,000 hospital bill to show for it. Even with the hospital’s no-insurance discount of $7,500, the bill topped $12,000. And when Thomas got home, she found $3,000 in past medical bills that should have been covered by her previous employer — and weren’t.

Now the couple, married less than a year and still out of work, face $15,000 in bills they can’t pay. It likely will scuttle their plans for a down payment on a house and will force them to postpone having children, even as their biological clocks tick louder.

“Every day, we look in the mail and think, please, please, don’t let this get any higher,” she said.

Thomas hadn’t thought much about health reform before this situation, but now it seems clear that the system has to change.

“I’m hoping that Washington and Congress are listening to individuals, actually listening to the common man,” she said.

Nichols said reform proposals now in Congress could offer hope to the Thomases and others.

“In the new world, if you lost your job, you would be able to go into the health insurance exchange, and because your income is dropped, you would be eligible for subsidies,” he said.

Royal Oak, Michigan -- 10/13/09 -- Kevin and Michele Thomas at their home. Unemployed and uninsured Michele needed emergency gall bladder surgery recently and now they are faced with thousands of dollars in bills they can't pay. Photo by John Makely/ medical bankruptcyJohn Makely

Although the health reform bills being considered each include some form of an insurance exchange, wary insurers are waiting for the details that could spark fierce opposition.

“It's not over, friend,” said Nichols, who expects a tough fight to continue. “This is going to be Armageddon.”

Thomas said she’ll pay more attention to explanations of the exchange and other proposals because the consequences of the current system are devastating.

“I don’t think anyone should go broke or bankrupt paying for the medical care they need,” she said.

Catastrophic injury, coverage denied
Duane Thayer of Highlands Park, Colo., learned the hard way that a single misstep — both physically and financially — can quickly lead to medical disaster.

For years, Thayer, 51, took his Christmas cue from actor Chevy Chase, stringing at least 10,000 festive lights. That’s what he was doing last Nov. 8 when the ladder slipped, sending the information services director plummeting to the ground. As he fell, his left foot caught in the ladder, nearly amputating the limb.

“All the bones had severed and all the skin was gone,” said Thayer. “They tried to put it back together, but it fell apart.”

The damage required five surgeries and nearly a month in the hospital. Through it all, Thayer assumed he was covered through an $843-a-month COBRA health insurance policy that he kept after being laid off from a technology job in late 2007.

Although he got another job, working for the Visiting Nurse Association in Denver, Thayer turned down that insurance in favor of the more expensive COBRA policy because he thought the coverage was better.

Courtesy of the Thayer family

In February, after four months of covered care for his extensive injuries, Thayer was notified by his insurance provider that they were revoking nearly $300,000 paid toward medical bills that eventually totaled about $500,000.

When Thayer called for an explanation, he said he was told that his policy was being canceled retroactively to October because of nonpayment — and because he’d had surgery to repair a club foot problem as a child.

“She said it was a pre-existing condition,” he said.

Thayer’s bank records show that he missed a payment in October but later made that payment and subsequent payments after his injury. Records show that Ceridian, the COBRA administrator, debited his bank account — and then returned the funds, after his injury.

Thayer acknowledged the missed payment; he said he had to bail his 19-year-old son out of a sudden financial mess. But he said he quickly made up for the lapse and continued to try to pay the premiums after his injury, especially since his medical bills appeared to be covered.

“I was a few weeks late with ONE payment after timely payments for over a year — not to mention having paid every month for 30 years to other insurance companies — and they kill my coverage,” Thayer said. “This is so wrong. My mistake was to have my accident.”

Three insurance entities were involved in Thayer's medical coverage: TSYS, the former employer that extended COBRA coverage; Ceridian, the administrator that coordinated payment; and Blue Cross Blue Shield of Georgia, the insurance company that provided it.

Representatives for all three companies said that Thayer's missed payment automatically invalidated his policy starting in October 2008 — and that he was notified of the termination.

But none could explain why his bills continued to be paid for four more months. And none could say why Thayer would have been told his coverage had been denied because of a pre-existing condition.

But Thayer insists he knows what he heard.

“They are absolutely saying that I am lying. And why would I do this? What gain would there be for me to do this?” he said. “Personally, this never made sense, not even for insurance companies. How possibly could they hold me to a congential condition that occurred literally 45 years ago?”

Thayer's situation is not unique, said William Shernoff, a consumer rights lawyer in Claremont, Calif., who has written several books about insurance payment problems. Under federal COBRA law, insurance coverage may be terminated after a late payment, but it's not required to be. Often insurers will continue to accept late payments and extend coverage — until a large claim is filed.

“Once somebody has had an expensive procedure, most carriers do go back to find any loopholes to get out of paying, that’s very common,” Shernoff said.

Health reform proposals now being considered in Congress may prevent insurers from denying coverage based on pre-existing conditions, like Thayer’s childhood surgery. But Shernoff said scrutinizing late payments and other loopholes may get even worse.

"They're not going take less profit," Shernoff said. "If you shut one door, they open another. There will be more exclusions, more deductibles, more co-pays.”

That’s not encouraging to Thayer, who fears that a year after nearly losing his foot, the monetary fallout may turn out to be truly crippling.

“Right now the emotion that best applies is abject fear and worrry,” Thayer said. “I am terribly concerned about all the collection calls I am receiving, worried about holding onto my home and finding a way not to file for medical bankruptcy, fearful that if my appeal is not successful, what will happen to my family financially.”

Thayer, who follows politics closely, said he's been disappointed so far in both parties' handling of the health care overhaul.

“The irony is that I never expected to have a front-row seat in the health care reform debate,”  he said.

Coming tomorrow: For one family, death was the only way out of financial ruin.