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Week of 3.20.09

Transcript: Gambling With Health Care

BRANCACCIO: If you yourself have coverage you may think of the health insurance crisis as somebody else's problem. But with so many of us vulnerable to sudden layoffs in this economy and with so much health care tied to jobs...we may all be just one pink slip away from a health insurance disaster. This is playing out in many states around the country, including Nevada....where the rapidly shrinking economy is knocking holes in the medical safety net right when it's needed the most. Na Eng produced our report.

You sit down with Debby Frohberg figuring this is America: a smart middle class person in our great country can come up with the health coverage they need some how. But to learn something new, focus with me on Debby's story, an odyssey that began on the last horrible day of last July.

FROHBERG: I was diagnosed with cancer on July 31st of 2008. An hour later, while I was still at the radiologist's doing my test, my husband called me to let me know that his employer was letting go him from his job.

BRANCACCIO: After that shattering double-whammy, it was a scramble to find coverage. She had been insured under her husband's health plan because her own job at a hotel-casino doesn't come with any coverage. So right away, she applied for what are called COBRA benefits, confident that the federal law would let her keep paying for the couple's old insurance. But, surprise, she was rejected because of a loophole—the company where her husband worked had fewer than 20 employees.

I know most people think there's a federal law. And if you should lose your job, if you can pay the premium, you can get COBRA. It's not that simple, huh?

FROHBERG: No, it is not that simple. They denied us COBRA. I—was under the impression that you could not be denied COBRA. But it is amazing what I have gone through...

BRANCACCIO: She couldn't get on any private plans because of what was now a pre-existing condition. She also researched nonprofit groups and charities and again, came up short.

So Debby shopped aggressively to get the best price she could find for her cancer surgery. In the end, it took all of the couple's Savings to pay for a double mastectomy. The cost: $17,000 dollars. But now her doctors say she really needs to follow up her surgery with chemotherapy... you know what's at stake here: doctors say if she doesn't get chemo soon, the cancer could come back.

FROHBERG: I should've been in chemotherapy two weeks after my operation. It has been four months, and I am just taking my chances.

BRANCACCIO: With no chemotherapy?

FROHBERG: No chemotherapy. I'm doing exactly what our town is noted for, gambling on my life.

BRANCACCIO: It's a gamble that families across the country are taking as they're thrown out of work and lose their private insurance plans...five million people lost their jobs this past year. As the unemployment number keeps surging, so do the number of additional people who need help with health care.

At the same time, 47 out of 50 states face budget shortfalls because of the recession.... On the chopping block are public health programs like Medicaid—for very low income people and the disabled. And s-chip —the program that covers some the economy grinds downward, states have less money to pay for these, even as more people turn to these programs for help. For many families, we're talking life & death.

Desperate, Debby Frohberg tried to do something she never thought she'd have to do: she turned to her government for help:

FROHBERG: I stood in line with our Clark County Social Services Department. I was told to show up early, as early as midnight. I showed up at 4:30 in the morning one morning to find that I was 88th in line of 120 people. Waited until 8:00am only to find out that I was $100 over their income standards.

BRANCACCIO: You made $100 too much?

FROHBERG: Exactly.

BRANCACCIO: How'd you feel when they're saying, "Oh, you're $100 over. Sorry"?

FROHBERG: You feel devastated. I can understand where each and every government organization is out there has their income qualifying standards. But I really, honestly feel that those levels need to be raised. Just due to the fact there is no more middle class America.

BRANCACCIO: There is supposed to be a place of last resort to serve people who have nowhere else to turn. Public hospitals serve the indigent and those on Medicaid. The University Medical Center in Las Vegas is Clark County's only public hospital.

The hospital depends on Medicaid funds to stay afloat. Now, state politicians have chopped funding—forcing UMC to take some drastic cost-saving measures. In December, this big public hospital shut down the units that offer outpatient services to cancer patients and high-risk pregnant women.

So what is this room we are going in here?

ELLERTON: We're going into the infusion center

BRANCACCIO: Dr. John Ellerton is an oncologist and the chief of staff at U.M.C.

So before these cuts, what would be the scene in the room?

ELLERTON: Before these cuts it would have been full. On average, they treated 40 patients a day here.

BRANCACCIO: Patients in all these chairs?

ELLERTON: Patients in all these chairs, getting therapy.

BRANCACCIO: We're talkin' about cancer. We're talking about high risk pregnancies. It a little difficult to tell a person, "Well, just suck it up. These are lean times."

ELLERTON: Well—that's basically what the executive branch of the state has said you, basically, have to do.

BRANCACCIO: The funding shortfall is especially painful in a state like Nevada, which, even in flush times, invested comparatively little in its public health system. Nevada has no corporate or personal state income taxes... and spends the lowest amount of all states on Medicaid per resident. Dr. Ellerton says this means the latest five percent cut ordered by politicians has been disastrous.

ELLERTON: The reality is our health care system in Nevada ranks near the bottom in almost every area that you wanna look at. And this is probably something we wouldn't accept in tourism. We wouldn't wanna be last in tourism. But we accept it in our health care systems.

BRANCACCIO: Nevada is not alone. Public health systems from California to Georgia have been hit with cuts. We spent some time with a young couple in Reno to learn how families are coping with the erosion in the public health system.

Janet and Rafael are a hard working couple. Every weekday, dad gets up at four a.m. For his job at a warehouse. His employer does offer health insurance. But like many private plans, it falls short when it comes to covering life saving but expensive procedures. The couple's son, Rafael, jr., has a condition called Tracheobroncomalacia. Baby Rafael's airways are so weak that, over the next two years, he'll have to depend on this ventilator to keep breathing.

We go with the family as they pick up baby Rafael from the intensive care unit.... It's a great day for them, but there's also intense worry...tending for Rafael takes a heavy toll on caregivers like his mom.

JANET SALMELA: It gets really stressful, you know. It takes a toll on your body afterwards, you know. Your body just feels exhausted all the time.

BRANCACCIO: Rafael's doctor, Sonia Budhecha, has deep concerns as well.

BUDHECHA: Rafael is the first patient that I will ever in my career send home on a mechanical ventilator with no nursing care whatsoever.

BRANCACCIO: Before discharging Rafael, Dr. Budhecha goes over some important final instructions.

BUDHECHA: If you're bagging him and he's still turning purple, one of you bag him and the other one call 9-1-1.


BRANCACCIO: You see, baby Rafael is coming home with complicated medical equipment, which requires monitoring 24 hours a day. It took paramedics to make sure he got home safely. And until recently, a home nurse would come in and lend a hand to parents of kids with such specialized medical needs. But because of Nevada's increasingly tight Medicaid budget, Rafael's parents are on their own.

At eleven that night—Rafael's mom Janet starts the first of what will be a series of non-stop overnight shifts... she knows that if she falls asleep, her baby's life could be in jeopardy.

JANET SALMELA: I'm just nervous, you know, of not dozing off and not being able to hear the alarms. That's my main worry. You know, we've had such a long day. We haven't really slept you know. Good thing he's here; if one of us dozes off we can kind of bump the other one.

BRANCACCIO: It's seven o'clock the following morning and Janet managed to keep herself up all night. She has a full day ahead of her before she can get sleep.

And it turns out dealing with all of this medical equipment has not been easy. When baby Rafael suffered a blue spell, he counted on mom to get him breathing again.

JANET SALMELA: He turns purple. He starts gasping for air. His lips are blue and, you know, he gets into a really, like, his body gets really cold and really sweaty. And it just—it's horrible to see him like that.

BUDHECHA: I feel that we're not doing the right thing in our community with these patients, these are already families that we have already asked every—for every ounce of what they've got to help take care of their children.

And even when we did have nursing care available, it w—you know, that nurse wasn't there 24 hours a day. These parents were already taking par—care of their children for usually over 16 hours per day. We only had a nurse available so these parents could sleep. At this point we've even taken that away from them.

BRANCACCIO: These are among the families that president Barack Obama and supporters in Congress have vowed to help through the economic stimulus plan passed earlier this year.

Obama: Roughly 20 million more can breathe a little easier, knowing that their health care won't be cut due to a state budget shortfall.

BRANCACCIO: But it's not that simple. In order to get federal matching money, Medicaid requires that states pay their portion of the total cost. And even with the federal help, Medicaid is the second most expensive item in the budget. For places like Nevada—with big needs and a weak health system—the stimulus money may not be enough to prevent the cuts Rafael's family has to confront each and every night.

BRANCACCIO: Medicaid—are you a fan of that program?

DEAN: It is a fantastic program. People are healthier because of it.

BRANCACCIO: Before his stint as head of the democratic national committee, Howard Dean was the governor of Vermont and a medical doctor.

But increase money for Medicaid during this difficult period temporarily? Or would you increase it permanently?

DEAN: I would make it permanent. Look, we need a universal healthcare system in this country. We don't have one. We're the only industrialized democracy in the world that doesn't have one, and we pay a fortune because we don't have one.

BRANCACCIO: Like many democratic strategists—dean wants a new American health care system to build on existing resources. He sees Medicaid and its sister program for the elderly, Medicare, as a path toward universal health care. When Dean was governor of Vermont, he expanded his state's Medicaid program—it has a cuddly name, Dr. Dynasaur —to insure a lot of kids.

tv ad clip: "I'm Dr. Dean here to talk to you about Dr. Dynasaur."

BRANCACCIO: 97% of Vermont's children have health insurance... one of the highest rates in the nation. Dean is adamant that we ought to do that for kids in the rest of the country.

DEAN: we made families who make less than $65,000—in a family of four eligible for their kids to have health insurance. Now, it didn't cost us hardly anything. We didn't raise taxes, although the federal government paid for a significant portion of it.

But the truth is there's no excuse for not covering people under 18 in this country. It's insane not to because if you don't, you pay for all that stuff later on when they turn 30 or 40 or 50 or 60.

BRANCACCIO: But Nevada is a long way from Vermont in many ways, including health coverage. Meet Heather and Logan Murray. They never thought they would need help covering their two girls. Until now.

HEATHER MURRAY: The power bill, that we're behind on. That's a red bill, means it's close to being disconnected.

BRANCACCIO: This is a family that has tried to do the right thing. For years, Logan Murray had a well-paying job in the construction industry. They bought a house within their means and sold it before the real estate market tanked. They also made sure to set something aside each paycheck to build a modest nest egg.

But then last April, Logan got downsized from his job and that left the family struggling to come up with a way to replace their health insurance. COBRA proved to be too expensive to cover the whole family for long. It was $1,500 a month. Now think about it: you could make the payments on four new Toyota Corollas for that amount of money. So Heather shopped around for the cheapest private plan she could find. But with less money coming in and those bills piling up, even that plan may soon be out of reach. How long can you hold on with the insurance payments that you're paying now?

HEATHER MURRAY: Maybe about a couple weeks. I mean, I could—I may have to let go of the insurance. Just can't hold on any longer. We've tried—to save and pay it and it's just getting too expensive. So, it could be any day.

BRANCACCIO: So if you get to the point in just a couple weeks, as you are telling us, that you might not be able to—

HEATHER MURRAY: I might have to drop it.

BRANCACCIO: That's not a decision that's gonna come lightly—


BRANCACCIO: —for you.

HEATHER MURRAY: Not at all. It's gonna bring many sleepless nights, many worries, lots of stress.

BRANCACCIO: The Murray's want to apply for what's called Nevada check up—that's the state health insurance plan for kids. But the program may not take ten-year old Priscilla and three-year old Alexis. Why? Well, Nevada's governor—Republican Jim Gibbons —has proposed a cap on the number of kids who can join Nevada check up—no matter what the need. Heather Murray finds that shocking.

HEATHER MURRAY: There shouldn't be a cap. Most families who have children, who have a family and know how hard it is to struggle and to keep health care insurance, we wouldn't even think about putting a cap on these programs. They don't need a cap.

BRANCACCIO: So, are you disappointed with the health care system? Because—

HEATHER MURRAY: I'm very disappointed. You struggle. You pay everything you should. You do everything you should. And at the end it doesn't work out that way because our government and our system doesn't fight for families like ours. We're the middle class, and we pay the majority of the taxes and we don't get the right coverage and health care programs out there for us.

BRANCACCIO: President Obama has promised comprehensive health reform within his first year of office.

obama: Let there be no doubt: Health care reform cannot wait, it must not wait, and it will not wait another year.

BRANCACCIO: And he's trying to appeal to Republicans by making the case that health care reform will actually save us money.

The Obama administration sees Medicaid and Medicare as vital pieces of any health care solution. It's an approach that will run smack into opposition from those who see programs like Medicaid as already too big and way too expensive. From what you've seen so far about President Obama's approach to health care reform, what concerns you already?

SMITH: There's a disconnection between some of the rhetoric and the reality. The reality is we already face enormous liabilities in the years ahead for the current public programs.

BRANCACCIO: Dennis Smith was the man in charge of Medicaid during the Bush administration.

SMITH: It really is not sustainable for Medicaid to take on even more of the burden. Medicaid, in many respects, has already been given too much of the—of the mission.

BRANCACCIO: Smith has a philosophical difference with the current administration. He is keenly worried the entire private system will be harmed.

smith: When you are taking people out of the private sector pool, yes, we have given them Medicaid or S-CHIP for kids, but what we have done is erode the private sector.

BRANCACCIO: Help me understand this, though. The way you lay it out, y—you get a picture of private health insurance companies saying, "Please, please, come with us into our plans." And then the government saying, "No, we want to expand our government plans. Please come with us." But the reality is more that there are people who can't get health insurance, and then the government plan insures them—the people who aren't in health insurance.

SMITH: But that's what I think the model should be. Stay in the private sector and we will subsidize you. We will provide you the assistance so you can participate in the private system.

BRANCACCIO: You don't love Medicaid that much. It's sort of ironic that it was your job to run it during the previous administration.

SMITH: I love the people on Medicaid. My perspective is we haven't built a system the best that we possibly can to support them.

BRANCACCIO: Smith makes no secret of the fact that he'd like to see federal support of Medicaid scaled back significantly and argues that most healthy moms and kids do not belong in the program.

SMITH: People on Medicaid, in my estimation—are—they have their—this isn't just about health care. It's about their liberty. It's about their way of life. It is about their freedom.

BRANCACCIO: In fact, the idea of freedom and individual rights is emerging as the cornerstone of the conservatives' campaign in the coming policy battle royale over health care. It's one of the arguments backed by industry players afraid of losing out under a new system.

Smith and other conservatives are pushing a model where the government gives consumers tax credits or debit cards to help them pay for the private insurance that they choose. Howard Dean also wants consumers to be able to choose their plans... but he thinks an affordable health insurance plan offered by the government should be one of those choices. He points out that our current system of mostly private insurers has also not exactly been cheap.

Critics of government health plans like to add up S-Chip, Medicare, Medicaid and say, "The costs of this are just gonna cripple this country." That we are offering this coverage—financing it, and your kids and my kids will have to pay for the coverage now.

DEAN: The problem with that argument is that we spend more than every other country in the face of the earth as a percent of our GNP.


DEAN: We spend I think 16 percent of our GNP. The next highest country is about nine or ten percent. And the European countries are generally between six and nine percent.

So the problem is we have no system. We have total chaos in this country in terms of funding. There is no organized thing. And there's tons of people that are not covered, including a lot of kids. That's insane. And we end up paying almost twice as much as the next country because of our incredible inefficiency.

BRANCACCIO: Meanwhile in Nevada, state lawmakers are holding hearings on how to fill the 2.2 billion dollar gap in their state budget. Next week, they'll consider whether or not to cut Nevada's bare bones Medicaid program even further.

And just two weeks after we met with the Murray family in their kitchen, they let their insurance lapse. They just can't afford the premiums. Now Alexis and Priscilla too are part of that swelling number of uninsured Americans.

And Debby Frohberg is still looking for a way to pay for chemotherapy. She's also living with a painful memory of how her husband, during his darkest hour while he was out of work, came to her with a horrific idea.

BRANCACCIO: We're seeing, because we're sitting with you—the struggle it's been for you. How's it been for your husband? This could not have been easy.

FROHBERG: It has not been easy. It has drove him to the point of suicide. It has drove him to quite a fit—bit of severe depression.

BRANCACCIO: He thought of taking his own life?

FROHBERG: Yes. We have been married going on 23 years. Our love and commitment together are very strong. He felt responsible. And looking at it with an attitude of, 'Alright. We do have a life insurance policy. I take my life, she'll get that. And she can live.'

BRANCACCIO: Mr. Frohberg was able to pull out of his despair. And in January, he found some work as a long distance truck driver. But Debby won't be eligible for his new health care plan until the middle of next year...

In Washington—even as Congress struggles to shore up the country amid the economic downturn... health care plans are gathering steam. There's word this week that three committee chairmen in the House of Representatives are working together on a health care plan that would likely offer government health coverage as one option. They want to get a full vote on the house floor by summer's end.

DEAN: I think this is exactly the time we should doing—be doing health insurance. And if we miss this opportunity, it'll be the greatest scandal in the last 60 years

BRANCACCIO: So we should—do you think we'll be able to this time?

DEAN: I hope so. We've got a huge Democratic majority in both the House and the Senate. We've got a democratic president who's promised and campaigned on universal health care. There's no excuse for it. If the Democrats don't do it, probably we won't get hired again.

BRANCACCIO: So...the health care headache evolves into a killer migraine if you lose your job. But there are some options to stay insured even when unemployed. Find specific health insurance advice on our website. Just direct your browser to

And that's it for NOW. From Las Vegas, I'm David Brancaccio. We'll see you next week

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