For Many, Health Care Reform Can't Wait

President Barack Obama will host a health care policy summit at the White House this week. An estimated 46 million Americans are uninsured, and that number is likely to climb as the recession costs more workers their jobs, and their employer-provided health coverage. Money coach Alvin Hall tells how, for many Americans, health care reform cannot wait.

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CHERYL CORLEY, Host:

Healthcare is near the top of President Obama's agenda this week. He will host a healthcare policy summit at the White House on Thursday. And yesterday, the president named Kansas Governor Kathleen Sebelius as his pick to head the Department of Health and Human Services. He also chose a leader of a new White House Office of Health Reform.

For many Americans, it's an issue that just can't wait. An estimated 46 million of us are uninsured, and that number is likely to climb as the recession cost more workers their jobs and their employer-based health coverage.

So what's the future of American health policy, and what choices are available now for people who are worried about the cost of healthcare? Joining us to talk about that is TELL ME MORE money coach, personal-finance expert Alvin Hall. Welcome back, Alvin.

ALVIN HALL: Thank you, glad to be here.

CORLEY: Well, what can you tell us about the financial consequences of not having health insurance and the impact that that really has on the overall economy?

HALL: Having been raised without health insurance, I can tell you the impact can be quite profound. If somebody in the family gets ill, the people must really weigh whether it's worth taking them to the emergency room because there is no doctor you can take this person to.

I remember when I was very young, when my middle brother came down with a fever that was around 104 or 105 degrees. It was really severe, and the nearest hospital was 27 miles away, and my parents had to debate whether or not to take him to the doctor because we did not have the money to pay for the healthcare coverage.

In many families, if they are unemployed and something catastrophic happens, someone is diagnosed with cancer or some other really difficult disease, it can bring the family to bankruptcy. So not having health insurance costs the economy huge amounts of money every year.

CORLEY: Now, having health coverage, though, doesn't mean that you're insulated from the cost of healthcare, though. So talk to us a moment, Alvin, about the upward trend in the price of insurance and what it's meant for small businesses, for example, and individuals.

HALL: You're asking me every question that affects my own life.

(SOUNDBITE OF LAUGHTER)

HALL: As a small-business owner and a person that has to buy insurance, I've seen my own coverage go from costing me around $5,500 a year up to over $10,000 a year.

CORLEY: Wow.

HALL: If I have to buy it for anyone who works for me, luckily most people who work for me have their own coverage, it would drive my healthcare coverage up to staggering amounts of money every month.

A friend of mine who owns a small law firm estimates that he must pay somewhere around $100,000 per month for the healthcare coverage for everybody in his law firm. So the trend has been going upward, and the amount of co-pays have also been going upward.

S: one, people who really need this and understand the importance of health coverage, and those people who see or believe that if people get this, they're going to abuse it and somehow cheat on it.

CORLEY: And that obviously will be the discussion as this argument over health coverage continues, but there were problems, Alvin, though, before the recession with many Americans losing their jobs and their health insurance. So what options are available to them for keeping coverage, and how does the president's economic recovery address those costs?

HALL: If you got laid off from your job, there was COBRA, which allowed you to keep your insurance I think for up to 18 months after you left the job. That was the way that most people hung on to health insurance if they could afford it.

Let me give you a story. A friend of mine who earned around $54,000 a year was laid off from his job. He decided he was going to go after COBRA. COBRA, at his firm, was around $725 a month. How much was his unemployment? $405 a month. So his decision was, and you can understand this, well, I can't afford health insurance.

So then he decided to approach his company and say well, is there a way that I can increase my deductible and lower the cost? The answer was no. So then, if you didn't get it through COBRA, you had to go out and find health insurance on your own. The only way you could reduce the cost was to take a huge deductible, $5,000, $10,000 deductible. But how many people have that kind of money sitting in a savings account that they could use to cover the cost of healthcare in an emergency?

CORLEY: Not many.

HALL: Exactly, not many. So basically it left you with an option: no coverage, taking the risk that if you're healthy, you will remain healthy.

CORLEY: Well, if you're just joining us, you're listening to TELL ME MORE from NPR News. We're speaking with personal finance expert Alvin Hall about the cost of healthcare.

Alvin, let's talk about the big picture. President Obama has pledged to move towards universal health coverage. He's dedicated more than $600 billion in his budget plan towards that aim. Of course, people will say that this is going to cost much more, but that's the down payment. What is that 600 billion for, and how are ordinary Americans going to benefit from it?

HALL: Built into that 600 billion is 155 million to approximately 120, 126 community health centers across America. He believes that by giving this money to health centers, allowing them to modernize and upgrade their services, it will give huge numbers of uninsured Americans access to primary and preventive care.

Right now according to an estimate, I think one in 19 Americans use these federally funded government facilities for their healthcare and 40 percent of the people who come there have no insurance. So by doing that, he gives people like my parents and relatives, who were raised in a small town with no access to doctors, access to healthcare.

For other people, he hopes to do something with their employer-based coverage so that if you're laid off from your job, then, under the new plan, your COBRA would be extended, but the government would pay 65 percent of the monthly premium that you pay for that.

That, to me, is a huge, huge benefit. In the case of my friend who I mentioned earlier, whose COBRA coverage was around $725 a month, that meant that his cost was reduced to $220-some a month. That's a much more affordable number for the type of coverage that you got.

Also, he hopes to encourage insurance companies to offer policies to people at reasonable rates so that everybody can afford health coverage in America. Forty-six million Americans have no health coverage, and several of those are relatives of mine.

(SOUNDBITE OF LAUGHTER)

HALL: So I really, really am on board for this because I see the impact of their lives when they have diabetes, obesity. They have the effects of heart disease, or they break a limb, and they have no way of paying for it. Then they get into that cycle of getting into debt, the calls start coming in, and then eventually, where does all the money go? Where did all the energy go? To avoiding paying for those bills, and the nation eventually loses the money.

CORLEY: We have to talk about one issue, a historic low in the stock market, the Dow closing yesterday under 7,000, its worst level in a dozen years. You talked with us last week about what might happen if the Dow did close under 7,000. We've seen it now. Are the markets close to bottoming out?

HALL: I don't think so. I think there are still many losses to be reported by these entities as they continue to unwind all those derivative instruments.

I also think that the economy is contracting at such a huge rate that there are going to be further announcements of losses and/or reduced earnings by these corporations.

I have long believed that if the markets breaks through 7,000, we will settle somewhere near 5,500, but that's my personal opinion. It's my sense of the market. I think we still have some dark days ahead. I do believe that the middle of the summer's going to be the worst of it.

CORLEY: Personal finance expert Alvin Hall joined us from our bureau in New York. Alvin, thank you so much.

HALL: Thank you.

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