By Sharon Cotliar Susan Schindehette Written by Ellen Shapiro and Champ Clark
Updated July 23, 2007 12:00 PM
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Is American health care in critical condition? The statistics are scary: According to the Centers for Disease Control, 44 million are uninsured, a jump of 2 million in the last year alone. The story isn’t always rosier for people lucky enough to have insurance. As controversial director Michael Moore chronicles in his new movie Sicko, premiums and out-of-pocket expenses are skyrocketing—and insurance companies seem to find new reasons for limiting payouts. “People assume that they’re buying protection,” says Mark Rukavina, executive director of the Access Project, a resource center that works with local groups to improve health care. “What we’re seeing is that there are all sorts of ways they’re avoiding paying the bills.” The insurance industry points out that millions of Americans are genuinely protected by their policies, but the following stories demonstrate the vital importance of reading the fine print.

DOUG CHRISTENSEN

Bought a $400-a-month policy—but didn’t read the details

As they held hands in the hospital admissions office, Doug and Dana Christensen’s only focus was on how the day’s surgery might halt the bone cancer that had spread to Doug’s lung. That is, until a clerk hunched over their paperwork said, “This is the worst insurance policy I’ve ever seen,” before asking for an $8,000 payment in advance. “I freaked out,” says Dana. “How were we going to come up with the money?” That morning in 2002, Doug, a California boat customizer, and Dana, a court reporter, learned the insurance they bought through MEGA Life for $418 a month would not help Doug in his hour of need. “We were told it would pay 80 percent of hospitalization and that all doctor visits were covered,” says Dana. Having survived a previous cancer scare, Doug had taken out a $100,000 supplemental chemotherapy policy. But that coverage topped out at $1,000 per day—even though his daily chemo ran as high as $18,000. In all, their insurance paid less than a fifth of his bills.

By fall, Doug, 49, knew he’d lost his battle—and had run up $450,000 in debt. “He asked me to divorce him so I wouldn’t be responsible,” says Dana. “I told him I believed in my vows, ‘In sickness and in health.'” Doug died that Oct. 2.

Widowed and pursued by bill collectors, Dana sued MEGA Life and won a settlement for $1.7 million. A company rep admits no wrongdoing: “We are diligent in our efforts to make sure customers understand the policies.”

But Dana, 49, has lobbied Washington for a change in the laws. “On one of his last days I found Doug looking out the window,” she says. “I asked him, ‘What’s up?’ He said, ‘This should not happen. This is wrong. This is just wrong.'”

ANNETTE NOE

A deaf girl’s insurer only agreed to provide a hearing device for one ear—at least at first

Doug Noe is a big fan of Michael Moore, the provocative director of Fahrenheit 9/11. Last year, he learned Moore was working on Sicko just as Noe was waging a battle with his insurer, CIGNA. His 3-year-old daughter Annette had been born deaf and needed a pair of high-tech devices known as cochlear implants, one for each ear, to hear and develop normal speech. But days before the scheduled surgery, CIGNA, to whom Noe had been paying $600 monthly premiums, okayed just one implant—deeming the second “experimental.”

Noe, 60, decided to e-mail Moore and tell him his story. He also fired off a letter to CIGNA: “The noted filmmaker Michael Moore is gathering health-care horror stories. Has your CEO ever been in a film before?”

The day before a conference call last May to argue his case, Noe got a voice mail from CIGNA saying the company had “redecided” his appeal. While not commenting on the specifics, CIGNA’s Dr. Jeffrey Kang says that, at that time, it was their policy not to cover two implants because of a risk for bacterial meningitis. But Annette Noe is making great progress with the two implants she received. “How can anybody deny treatment for a child with disabilities?” asks her father. “In this country?”

JACK BATH

Just when he needed life-saving heart surgery, his mom’s policy was canceled

Surgery was the only hope. The doctors broke the news to Jessica and Christopher Bath in 2003 that their day-old son Jack—born with a hole in his heart—would die without it. Jessica, a college student, had bought health insurance. But after scheduling Jack’s surgery, a letter arrived from Blue Shield of California: Her policy had been canceled. Says Jessica: “I was devastated, helpless.”

Reviewing her medical records, Blue Shield learned that Jessica had taken an antianxiety drug and been diagnosed with a common virus, but had listed neither on her application. The omissions had nothing to do with Jack’s life-threatening ailment, but Blue Shield said the policy was void because of withheld information. “They sell you an umbrella and take it back as soon as it starts raining,” says Jessica’s attorney Ray Mattison, who represents Jessica in a suit against Blue Shield. The insurer responds, “When we make the decision to rescind a policy, it is because of what was or wasn’t on the application and not anything else.”

Jessica got lucky. She found coverage for Jack’s open-heart surgery—which went off without a hitch—through state Medicaid. The now-healthy boy, 4, loves the beach and his toy trucks. But Jessica hasn’t forgotten. “What Blue Shield did to us was unspeakable,” she says.

KENNY MAIN

A Florida family learns the high price of low-cost insurance when their son gets leukemia

The Main family of Port Charlotte, Fla., learned the hard way that you get what you pay for. Struggling to find insurance coverage for a family of four on Tom Main’s $40,000 salary as an electrician, his wife, Hesper, 29, spotted a poster on a telephone pole. “It was right there,” she says. “Affordable health care for the self-employed.”

In November ’05, an insurance company rep visited the Mains, “talking 100 miles a minute,” says Hesper. The couple chose the Basic Hospital Medical Surgical Expense Plan for $227 a month.

Then the Mains’s son Kenny, 5, was diagnosed with acute lymphocytic leukemia. The company, MEGA Life and Health Insurance, has paid roughly $45,000 toward Kenny’s first 17 hospital visits, and “that’s pretty much what they’re going to pay,” says Hesper. “The rest of the expenses are out of pocket, and last time I looked, it was $500,000.”

Critics call this kind of undercoverage “junk insurance,” but MEGA Life maintains a comprehensive policy with another company could cost $12,000 a year and insists the Mains knew exactly what they were getting. Though considering bankruptcy, the Mains are grateful Kenny is in remission. “I thought I understood what we were getting,” says Tom. “Obviously, I didn’t.”