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Unaffordable?

One in four West Virginians were without health insurance for some part of last year. Insurance prices are rising faster in West Virginia than elsewhere. As state leaders struggle to find answers for the future, the Gazette offers this glimpse of the past.

In 1955, newly married, young Tom Kasey went door to door to collect health insurance premiums. "You'd go to people's homes and collect, like the paperboy," he said. "The milkman, the doctor, the insurance man — all of us came to your house back then.

"Most anybody who wanted health insurance got it. It was like your electric bill or water bill, something you paid without much thought. For about $12 or $20 a month in the '50s, you could have your family insured.

"The wage scale was lower, of course, but as a percentage of income, health care and insurance were a lot more affordable."

When his first child was born in 1956, for instance, his wife's semi-private room cost only $9.50 a day.

He felt good about his job. "You weren't asking people to give up something they needed when you offered them a chance to get health insurance," he said.

"I had one suit, the one I got married in. When we went out to work, we were required to wear a suit coat and white shirt and tie, even if it was 90 degrees outside. So I went to Penney's and bought myself a second suit.

"I had more invitations to come in and eat than I've ever had at any other time in my life. People told me things they wouldn't tell a preacher. It was scary to a shy young man like me. I'd think, 'Lord, I hope I'm giving these people the right advice.'"

Kasey has watched 49 years of changes in American health insurance. At age 71, he still meets with health insurance clients a few days a week at Silverstein, Maddox Wallace & Associates in Charleston. "But premiums are so sky-high now, I don't know how people can afford it," he said.

The average West Virginia family insurance premium is now about $750 per month or $9,000 a year, which is about $3,500 higher than it was in the 1950s. Health-care costs have rolled upward at a double-digit clip for the past three years.

At that rate, the average family premium will cost $18,000 by 2008, in a state where the average 2002 income was $23,000.

Kasey wishes health insurance could go back to "community rating." From the late 1920s through the 1950s, many insurance plans were community rated. Everybody paid the same rate, regardless of their age or health history.

"The idea was that if everyone was in the same pool, nobody would have to pay too much," he said. "The healthy would subsidize the sick, then later in life, they'd be subsidized in turn.

"We've lost that idea," Kasey said. "That's more of a shame than people know. It's all about the bottom line now."

Most insurance plans are experience-rated now, he said. The older and sicker you are, the more you pay. People who work in more dangerous occupations pay more. People who buy individually pay more. People who live in areas such as West Virginia that generate a lot of medical claims pay more.

Given the age and poor health of West Virginians, experience rating is not great for the state, Kasey said. West Virginians as a group pay some of the highest premiums in the nation, according to Mountain State Blue Cross/Blue Shield.

And U.S. rates are the highest in the world, Kasey adds. In the United States, health care costs twice as much as it does in other industrialized countries, according to the Organization for Economic and Community Development (OECD).

Since 2000, Kasey said, many large insurance companies have stopped writing health insurance policies. "They can't get the profit they want now." Companies that still write policies are leaving unprofitable areas like West Virginia.

Earlier this year, the state Insurance Commission said fewer than 10 companies are still writing health insurance policies in the state.

"It's all changing, but most people don't know it yet," Kasey said. "You saw that in the Kroger strike with health care," he said. "It took the company and the employees awhile to come to a common understanding of what the reality is."

He looks around and sees multinational, publicly-traded insurance conglomerates. West Virginia companies creating self-funded insurance plans that escape state regulation. Employees paying huge deductibles and co-pays. His old insurance company has become part of General Electric.

A lot of his clients can't afford prescription drug coverage anymore. "I give them the 800 number of a Canadian pharmacy," he said.

"We're headed for a time when almost nobody is going to be able to afford insurance at all," he said. "Maybe I'm getting old, but I think we're like frogs in cold water.

"They say that if you put frogs in a pan of cold water and gradually turn up the heat, they'll just sit there and cook and never jump. I think that's what's happened to us in health insurance. These changes have happened gradually over time. All of the sudden, a near-disaster is here, and we don't understand what happened."

How did we get here?

Tom Kasey was 2 years old in 1934 when Franklin Roosevelt decided to take national health insurance out of the Social Security Act. If Roosevelt had left it in the bill, Kasey said, U.S. health care and insurance would probably look more like European and Canadian programs today. It would cost less, too, if only because administration would be simpler.

The United States did not adopt the European model, in part because the doctors' lobby was much more in the United States, writes Paul Starr in his Pulitzer Prize-winning book, "The Social Transformation of American Medicine."

Five American presidents proposed national health insurance: Theodore Roosevelt, Franklin Roosevelt, Harry Truman, Richard Nixon and Bill Clinton. The American Medical Association campaigned against each proposal, sometimes defeating it before it got to Congress.

In 1917, opponents of national health insurance printed pamphlets that called it "a dangerous device, invented in Germany, announced by the German Emperor from the throne the same year he started plotting and preparing to conquer the world." In the '20s, as anti-Communist fears rose, opponents called it a bolshevik idea. When Truman proposed it, the AMA ran ads that contained an alleged quote from Lenin.

With no central administration to pay health bills, Americans developed an unplanned, patchworked non-system that covers some people and not others.

Part of the non-system developed in the private sector: In World War II, commercial insurance companies began to sell health insurance in earnest. Companies used it to attract scarce workers. People came to expect it with the job. Unions developed insurance plans. In Appalachia, the United Mine Workers set up a much-needed system of hospitals and health funds.

Part of the non-system is public: Roosevelt left a clause in the Social Security bill that said the federal government would give states money to provide health care for needy children. Later, the Veterans Administration and advocates for disabled people set up their own programs. Later, Medicare insured people over 64.

Each new funding system — public or private — created a new bureaucracy. Each new bureaucracy cost money. Each new set of rules forced the other bureaucracies to adjust. By 1985, American hospitals and doctors were hiring troops of people to deal with multiple funding channels.

It all adds to the cost of insurance. In 2003, the New England Journal of Medicine reported that U.S. health-care administration alone — per person — costs three times as much as it does in Canada. Most Canadian medical bills go through one central provincial administration.

'Don't they even want to save money?'

"It's gotten more complicated, but not more logical or fair," Kasey said. Government insurance programs get big discounts, uninsured people pay top dollar, and private insurance pays whatever price they can negotiate.

In the mid-'50s, when young Kasey went door to door collecting premiums for Life of Virginia, there was no such thing as a self-funded company insurance plan, and the alphabet soup of HMOs, PPOs and PSOs had not yet been created.

"By the mid-'80s, I was telling my wife, 'Maybe it's time for me to quit,'" he said. By then, he said, "Insurance companies had stockholders, and everybody was suing everybody. I'd take my boy to the ER when he got hurt playing sports, and they'd run tests they never would have run before, to limit liability."

Kasey thinks the recently passed Medicare bill will drive up prices. It bars Medicare from even asking the drug industry to give discounts. "Now why did they do that?" he said. "Forty million people, and they can't negotiate discounts? Don't they even want to save money?"

The cost of health care keeps rising. "I see more and more people asking for the highest deductible they can get," he said. "I hear them say, 'Well, at least I won't have to worry about being wiped out.' And given the prices, maybe that's the only way to look at it."

What advice would he give the average person? "Educate yourself," he said. "Something has to change, and there's a better chance of that if people know what's going on.

"We're part of the problem, too," he said. A lot of people don't take care of their health and don't try to understand what's happening. They won't even read their own policy," he said. "That's when we're like those frogs. Suddenly, we're in hot water, and we don't know why.

"I keep thinking about that movie where the guy sticks his head out the window and yells, 'I'm fed up, and I'm not taking it anymore,'" he said. "If enough people did that, we might all get some relief."

To contact staff writer Kate Long, use e-mail or call 348-1798.


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