By Julius A. Karash, The Kansas City Star, Mo.

Mar. 23--As state and national leaders wrestle with the plight of 47 million uninsured, a report released Thursday points to Americans who have insurance but still struggle with medical debt.

"The Illusion of Coverage: How Health Insurance Fails People When They Get Sick" highlights the burdens imposed, often on low-income workers, who can run up extensive medical debt because of co-pays, coverage caps, confusing bills and other pitfalls. Those expenses often lead even those with insurance to avoid or postpone getting needed care, the report stated.

"Usually they had inadequate insurance because it was the only option offered to them or because it was the only option they could afford," stated the 71-page report released by The Access Project public interest group and Brandeis University. It was funded by the W.K. Kellogg Foundation and the St. Louis-based Missouri Foundation for Health.

Kathleen Stoll, health policy director at the Families USA consumer advocacy group, said 10.7 million insured Americans spend more than a quarter of their annual paychecks on health care.

"This isn't a problem of a few, but a national crisis of enormous proportions," said Stoll, who spoke at a teleconference.

The report's findings are based on telephone interviews with 45 people in California, Florida, Illinois, Massachusetts, Missouri, New York and Ohio. To participate, those interviewed had to have accrued medical debts at a time when they had private health insurance through employer coverage or an individual policy.

One of those in the report is Lynnette Swartz, a resident of Freeman, Mo., in Cass County.

In an interview this week, Swartz recalled that in the last weeks of 2004, as her husband, Robert, was dying of cancer, she found herself fearful every time the phone rang. The family had about $9,000 in medical debt.

"I was getting calls from collection agencies about every day," Swartz said. "They wanted me to pay for the whole thing all at once. They were ruthless. There were times when I had to make a choice between paying the doctor bill and paying the light bill."

The Swartzes had health insurance coverage through Lynnette's job, but hundreds of dollars a month in co-payments drained the family coffers.

Swartz said she has paid off most of the medical bills from her late husband's illness. But the experience of falling into steep medical debt has left her reluctant to seek medical attention unless she feels it's absolutely necessary.

"The majority of us are just one catastrophic illness away from financial ruin," she said.

The report did not seek to quantify the total number of insured consumers who struggle with medical bills.

"We already know from national data that large percentages of insured people face medical bill problems and medical debt," said Carol Pryor, senior policy analyst of The Access Project and lead author of the report. "We wanted to get behind the data and learn about the specific issues people face with their insurance that leave them with unaffordable medical bills."

Corrie Edwards, executive director of the Kansas Health Consumer Coalition, in Topeka, said the report "shows that health insurance is not fulfilling its function, to provide financial protection and guarantee access to needed care when people get sick."

Mohit Ghose, spokesman for the industry trade group known as America's Health Insurance Plans, said health insurers view affordable health care as "the No. 1 domestic policy priority in America."

However, Ghose said it is "too convenient" to pin all the blame on the health insurance industry. "We must address the cost drivers in health care if we are ever to improve the affordability of coverage."

Some of the biggest cost factors include an aging population, state and federal health coverage mandates, shortfalls in health-care quality, the rising cost of medical technology and the medical liability system, Ghose said.

The report said the interviews indicated numerous causes for medical debt among the insured. It said about two-thirds of those interviewed blamed premiums, deductibles, co-payments or co-insurance.

The Access Project, of Boston, is a research affiliate of the Schneider Institutes for Health Policy at Brandeis University.

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To reach Julius A. Karash, call (816) 234-4918 or send e-mail to jkarash@kcstar.com.

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Copyright (c) 2007, The Kansas City Star, Mo.

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