CHANA JOFFE-WALT, HOST:
There are a lot of things in the health care law that was upheld yesterday by the Supreme Court that people hate. There are controversial big questions like, can you make people buy insurance? And then there are some changes, some quite dramatic changes, that just don't get talked about that much because pretty much everyone agrees they should happen.
CINDY HARTSBURG: Hi, Mary. This is Cindy Hartsburg with HealthPlanOne calling. How are you today?
JOFFE-WALT: Cindy sells health insurance to individuals who want to buy it, people who don't get coverage through their jobs. And Cindy doesn't work for an insurance company directly. She's sort of a middleman. People call her looking for coverage, and she helps them find it.
Right now, Mary is calling her. Mary needs insurance. She tells Cindy she hasn't had it for a while. And she also tells Cindy that she has fibromyalgia. And that - that's the end of the call.
HARTSBURG: Unfortunately, Mary, based on the different carriers that we represent, the condition that you have is considered high-risk, and it's an automatic denial for coverage. OK, sorry I wasn't able to assist you. Bye-bye.
JOFFE-WALT: That interaction - the Supreme Court just upheld the law that makes that interaction illegal. The law says insurance companies cannot deny people for pre-existing conditions, which is bad news for HealthPlanOne because denying people for pre-existing conditions is a huge part of their job. It is like the law was written to exactly erase this company. And just yesterday, the people who work here realized that is what is happening. Hello, and welcome to PLANET MONEY. I'm Chana Joffe-Walt.
ALEX BLUMBERG, HOST:
I'm Alex Blumberg. Today is Friday, June 29. And today on the program, the Supreme Court upheld pretty much every part of the Affordable Care Act and lots of lives are set to change as a result. Today, we're going to hear stories of people affected both inside the insurance industry and outside as well.
(SOUNDBITE OF SONG, "HUMAN THING")
BE GOOD TANYAS: (Singing) You're a human thing.
BLUMBERG: So by now, the shock is over. The Supreme Court upheld the law and, with it, one of the more controversial aspects of the law - the individual mandate. Everyone has to either buy health insurance or pay a penalty for not buying it.
JOFFE-WALT: And, Alex, I have to say, whenever I hear about that mandate, I think about Cindy Hartsburg, who you just heard denying people on the phone, because it was with her in her office that was sort of the first time I fully understand why the mandate is so important to the health care law.
BLUMBERG: And, Chana, you first visited HealthPlanOne back in 2009 when you did a story about them. This was when Congress was first writing the health care law. And there was all this talk at that time about this practice of insurance companies denying people with pre-existing conditions. And we kept thinking, wait; that's somebody's job - right? - to deny somebody with a pre-existing condition. And it turns out the person with that job, a lot of times, they don't actually work for the insurance company. They work for a third-party broker like HealthPlanOne, the place you just heard from, where people spend all day denying people health insurance.
JOFFE-WALT: Yeah, Cindy sits there. She takes calls in this room full of, you know, maybe 15 people with headsets. And they're all sitting at computers getting calls from customers who want to buy health insurance. And a lot of the time, their job is to figure out if the people calling them shopping for health insurance are already sick. So here's a little clip of the piece that we did back in 2009 when they were writing the health care law.
(SOUNDBITE OF ARCHIVED BROADCAST)
BLUMBERG: In this office, they call them pre-exes (ph) - pre-existing conditions.
JOFFE-WALT: Yes. And in the next cube over, it takes Andrew Seward (ph) 27 minutes into his call to find the pre-ex (ph).
ANDREW SEWARD: When she said she had been in a car accident recently and she's on multiple pain medications.
BLUMBERG: Here are some other things that may disqualify you from every individual insurance plan - depression, migraines, AIDS...
JOFFE-WALT: Obesity, asthma, pregnancy.
BLUMBERG: ...Pregnancy - that's a big one - heart disease.
SEWARD: Things like sleep apnea, you know, cancers, lupus.
HARTSBURG: If someone's insulin diabetic, cholesterol, back problems.
JOFFE-WALT: If you didn't hear yourself mentioned anywhere in there, I promise it's only because we cut them off. Cindy says about half the people who call in get denied.
BLUMBERG: And a lot of the people who call in who are sick have to pay more. And this, of course, completely violates the average person's sense of justice. It seems wildly unfair that an insurance company would pick and choose who they want to cover and refuse to cover people who need insurance the most.
JOFFE-WALT: OK. But to the insurance professionals in this room, it feels exactly the opposite. It seems totally inappropriate that people call up already sick trying to get covered. Bill Stapleton is the CEO, and he says people don't call him until...
BILL STAPLETON: Guess what? I've got a medical problem. I better go get insurance. Gee, I showed up, and they wouldn't let me have insurance. Well, what's your problem? Well, I had an MRI. I think I've got a - you know, I think I've got a big problem. Of course you're not getting insurance. You can't show up and pay $100 and expect you're going to get a $10,000 procedure.
JOFFE-WALT: That's what insurance is for, though, right? The reason that you buy insurance is because when you get sick, you need insurance to pay for it.
STAPLETON: Yeah. You feel bad about it. On the other side of the coin is, why'd they drop their health insurance? You take a risk that something bad happens and then you're not covered.
BLUMBERG: Bill says that calling him up and asking for health insurance when you're already sick is like someone asking for fire insurance when their house is already on fire.
JOFFE-WALT: But Bill says there is an answer, and that is to make everyone buy insurance before their house catches on fire. Make people buy health insurance before they get sick. And the idea is insurance companies, they'll take everyone. They'll stop denying people if, in exchange, you make everyone get covered. You make everyone pay into the pool even when they're healthy. And that way you have both healthy and sick people paying into one big insurance pool so you can cover all the expensive stuff - all the pregnancies and cancer and back surgeries. And that, of course, is the individual mandate, which did make it into the health care law.
BLUMBERG: Insurance companies can't deny people for pre-existing conditions. In exchange, everyone has to buy insurance. It is exactly this tradeoff which landed the law in court, where justices considered this question - is this even legal? Can you actually make U.S. citizens buy something?
JOFFE-WALT: Yes. The court came out with their announcement yesterday at 10 a.m. And yesterday morning, I thought the place I want to be when this happens is HealthPlanOne because these guys are going to be watching it so carefully. You know, every computer monitor is going to have the news on it, and they're going to be blasting TV. And I had this idea in my mind that, you know, as it gets closer to the announcement, they're all probably going to crowd around with their Diet Cokes and shout at Wolf Blitzer, eager for this news that they've all been waiting for, especially Bill, the CEO.
Are you counting down?
STAPLETON: No. I really haven't worried about it. I was on vacation in Italy and didn't think about it for two seconds till I came back.
JOFFE-WALT: OK. But I asked Bill, you must be rooting for some particular outcome, right? Do you want the court to uphold the health care law, or do you want them to strike it down?
STAPLETON: Either way is fine with me.
JOFFE-WALT: The level of disinterest in this office was extremely curious to me.
Do you think other people in your office here are paying attention to this at all?
STAPLETON: I don't. I don't.
JOFFE-WALT: 10 a.m., Bill Stapleton, the CEO of a company that sells health insurance on the morning of the biggest ruling on health insurance ever, was telling me about innovative software for medical underwriting. And I interrupted him and said, aren't you even going to look at the ruling, watch the news or something? At which point, Bill stood up and said, oh, sure, you want to watch TV?
STAPLETON: I think we can. Let's go - let me call Justin (ph) and just ask him. Hey, Justin. It's Bill. Does the TV in the conference room - does that - can that play television? Can you turn the television on there?
JUSTIN: No, there's no cable.
STAPLETON: Anybody else have a TV?
STAPLETON: OK, thanks.
JUSTIN: All right.
STAPLETON: OK, bye.
JOFFE-WALT: It's not until Bill and I are walking to the conference room that I realize that this is not a man who doesn't care. This is a man who is just worn out. Bill spent years watching Congress debate the health care overhaul, gaming out how his company would survive under this version of the bill and that version of the bill. And then the law was passed. And then the constitutionality of the law was challenged.
STAPLETON: It's very difficult to plan because there's so much uncertainty out there. And that's - that doesn't sound like a big deal. It's a big deal if you can't plan out two or three or four years. How do you make an investment today? You know, your investment today doesn't pay off today. It pays off in three or four years.
JOFFE-WALT: Speaking of uncertainty, so Justin gets the TV working. And there's Wolf Blitzer on CNN with a big announcement.
STAPLETON: Struck down the individual mandate.
JOFFE-WALT: Of course, this information is wrong. CNN jumped the gun. But Bill didn't know this. So he walks over to one of his salesmen, Dan Moncherry, who turns to his computer.
DAN MONCHERRY: Well, Yahoo's saying it has survived.
STAPLETON: We have conflicting reports here. This is unusual. Go to, say, foxnews.com or another station just to see what they said.
MONCHERRY: I don't know who to trust right now at this point.
JOFFE-WALT: How appropriate, Bill says. This is exactly how the last few years have felt for us in the health insurance industry.
STAPLETON: This is ironic, very ironic.
JOFFE-WALT: Eventually, the news was clear - the law was mostly upheld. And it seemed to be the final conclusion of sorts for this company. Unless Bill's business dramatically changes what it does, it was just written out of existence. No more denying people is what the law says. And that is exactly what the brokers at HealthPlanOne do.
Also, the states in the law are supposed to set up exchanges where individuals can go and just look online to compare individual health care plans, which is the service that HealthPlanOne provides right now. They try to help you through that process. And another way HealthPlanOne was basically just written out of existence is that the law says insurance companies are supposed to reduce administrative costs. So they have to spend 80 cents of every dollar you give them in your premium payments - they have to spend that on medical stuff, not on administrative stuff. So that leaves less money for the insurance companies to pay third-party companies like HealthPlanOne.
So in some ways, like, when the public hears that they're going to cut the, like, excess administrative costs, in general, people feel good about that because they feel like, I pay my premiums and they should go to medical expenses specifically. But for you, that's like the public saying we don't think you should exist.
STAPLETON: Or you should exist on a lot less money. And I'm not sure that's bad. I'm not sure that's bad. But I can tell you there's been a...
JOFFE-WALT: See, I really respect you for saying that.
STAPLETON: I'm saying it from a public policy standpoint. Yeah, for a short-term running a company, it's bad for us.
JOFFE-WALT: It has already been pretty bad for HealthPlanOne. Bill has laid off more than half his salespeople. Cindy Hartsburg you heard at the top denying that woman with fibromyalgia insurance - Cindy's gone. Her desk is empty.
So what are you guys going to do now?
STAPLETON: We're thinking about a lot of things. We're testing a lot of things right now to see what is interesting - for instance, life insurance.
JOFFE-WALT: Or, Bill adds, we're thinking about car insurance, home insurance. The people who call us, they all have cars and homes, so they're going to need insurance for those things. At which point, I turned to Dan Moncherry, the salesman who's sitting with us. And I said, what are you going to do? What about you? And his phone lights up. He gestures, I'm going to answer the phone.
MONCHERRY: Dan speaking, HealthPlanOne, how can I help you today? Are you just shopping for insurance just for yourself? Or are you shopping for you and your family, your husband? How's your health right now?
BLUMBERG: How's your health right now? That's a question he will only be able to ask for another 17 months. January 2014, you're no longer allowed to deny people for pre-existing conditions - a huge change for the insurance industry.
JOFFE-WALT: And we wanted to spend the rest of the show talking about the people on the other side of the phone call who do not work in the insurance industry, but the people for whom this law means big changes as well.
BLUMBERG: And, in fact, all this week, I've been talking to people who didn't have insurance for a long time about what it's like without insurance. And one of those guys is Paul Brown (ph), who had had insurance through his work for his entire life, and then he lost his job and, with it, his insurance. And he said, losing insurance, it changed the way he thought about himself.
PAUL BROWN: At times, I wouldn't even go to the doctor, you know, because, you know, I didn't - I felt embarrassed. I really did. You know, I felt like, you know, I felt like a second-class citizen. People talk - they talk down to you. They - you know, you can tell the difference. You know, when you got insurance, you know, it's, you know, how you doing, sir? What can we do to help you? And then when you don't have it it's, you know, could you wait over there? It was like a shock to me, you know, because I've always had insurance. It wasn't like, you know, I was used to this because I worked all my life, so I always had insurance. It wasn't, you know - and then I'm 50 years old. And now I don't have insurance. It was - yeah, it was quite a shock.
BLUMBERG: The law that the Supreme Court upheld is going to take millions of people like Paul and transform them from uninsured people to insured people. And one of the main ways it's going to do this is by expanding Medicaid. Medicaid is the government insurance program for poor people. And Medicaid used to just cover people at or below the poverty level. Now, with the new law, it will expand coverage to people a bit above the poverty level as well, which means an estimated 17 million more people will now be eligible for Medicaid.
JOFFE-WALT: And we should say the court did have a problem with the way the federal government wanted to expand Medicaid and wanted to penalize states that refused to expand Medicaid. But for the most part, experts seem to think that the expansion will probably go forward in most states anyway despite this ruling.
BLUMBERG: And since the Affordable Care Act passed two years ago, we've had the chance to learn a lot about Medicaid and the way it impacts people's lives. There was this huge, huge research project on Medicaid, one of the largest of its kind, that was started in 2008. But then in 2011, after the Affordable Care Act passed, data started to become available from this project. We did a show about it recently. In it, researchers sent out tens of thousands of questionnaires to detailed interviews with hundreds and hundreds of people. And what they heard over and over again was what Paul Brown talked about, the shame of living without insurance. Another thing they heard was something that Robin Boros (ph) told me about. She'd also lost a job and, with it, her insurance. She no longer had access to a doctor. So if she was sick, one of her only options was going to the emergency room. But that, she said, wasn't really an option either, as she found out one day soon after she lost her coverage when she fainted.
ROBIN BOROS: My husband called the ambulance. And then they came and got me and took me to the hospital. And the hospital bill was, like - I mean, it was atrocious. It was in the thousands. We couldn't pay it.
BLUMBERG: They never did figure out what caused the fainting spell. But after that, Robin and her husband tried to avoid the doctor as much as they could. And this is something else that many people in that study said. They couldn't afford to get sick. And if they did get sick, it often led to a bill that they couldn't pay, which led to lots of hassling calls from collection agencies.
Robin and her husband took every precaution they could. They washed their hands all the time, and not just their hands.
BOROS: Wash doorknobs. You wear masks, things like that.
BLUMBERG: You would wear masks around the house?
BOROS: Oh, yeah, yeah, if the kids were sick, yeah, because I didn't want to get sick.
BLUMBERG: When a tree fell on Robin's husband's hand, crushing it, he didn't go to the doctor. When Robin's blood pressure medication would run out, she'd try borrowing pills from friends and relatives with their own prescriptions. And if that didn't work...
BOROS: We tried to get it off the streets.
BLUMBERG: Really? So you would actually go to, like, drug dealers for your blood...
BOROS: Go to someone - yeah, someone that - you just look around out on the street. You find people, and you just ask.
BLUMBERG: What was that like the first time you went to a drug dealer?
BOROS: Awful. That was awful. I mean, I didn't - you know, but you do what you got to do.
BLUMBERG: There is a huge debate about Medicaid. Is a government program the best way of providing health insurance for the poor? Could the private market maybe provide the same or better care for cheaper? But given the choice between nothing and getting on Medicaid, most of the people in that survey felt the way that Robin Boros does. She recently got on Medicaid after having no insurance for a long time. And she says Medicaid, it's much better.
BOROS: I mean, I have a regular doctor I see, you know, every - whenever I need. I just call in and make the appointment, and I get in. My health is better. It's just so - the stress is gone of, you know, having to worry about, how am I going to get my high blood pressure medication?
BLUMBERG: So presumably, there are millions of people out there in the country who are facing some of the stresses and burdens Robin and Paul were facing, who, because of expanded Medicaid coverage and because of these other rules that are in the Affordable Care Act, will experience the same relief, will finally have insurance.
JOFFE-WALT: But, you know, there's one other thing I just wanted to bring up because we've talked about it so many times on this show, but we are not really going to talk about it on this show. And that is...
BLUMBERG: I know, I know.
JOFFE-WALT: ...Costs - money, right? We have talked many times about how this country spends a huge amount on health care. And the share the federal government spends on health care is set to eclipse all other spending pretty quickly. And as things currently stand, it's not sustainable. The government is going to need to start bringing in more money, which means higher taxes, or figure out some way to slow the growth of health care costs. We just have to say that.
BLUMBERG: Right. And the Affordable Care Act, the largest overhaul of the health care system in decades, doesn't actually do much about the growth of health care costs, which is arguably one of the biggest priorities facing the country. The law does create a bunch of experimental programs that people hope will demonstrate ways to effectively control costs. But for the most part, this is the big gaping hole in the health care law. We've rearranged things so that the private market will cover more people. We've expanded the government's role to cover more people still. But we haven't figured out how we're ultimately going to pay for it all.
JOFFE-WALT: I believe, as we say in the news business, Alex, we'll have more on that story as it develops.
BLUMBERG: I'm sure we will.
(SOUNDBITE OF SONG, "HUMAN THING")
BE GOOD TANYAS: (Singing) You're a human thing. You're a human thing.
BLUMBERG: As always, we would love to hear your thoughts, questions, concerns. Please write to us at firstname.lastname@example.org.
JOFFE-WALT: We're online at npr.org/money. I'm Chana Joffe-Walt.
BLUMBERG: I'm Alex Blumberg. Thanks for listening.
(SOUNDBITE OF SONG, "HUMAN THING")
BE GOOD TANYAS: (Singing) Move me. Move me. Could it really be so wrong to let somebody, somebody see? Move me.
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