Viral Uncertainties: the limitations of American Medical Insurance

By Nathalie Padros-Ross and Francis Léveillé 

In the midst of the pandemic, stories of exorbitant treatment costs for the virus are covering newspapers across the United States. While federal and state governments have stepped in to cover some of the costs of testing and treatment, when individuals read stories such as that of Danni Askini, who, after multiple visits to a hospital in Boston, received a positive COVID-19 test result alongside a US$ 34,927.43 bill (Abrams, March 2020), uncertainty over testing and treatment is heightened. The un- and underinsured may start fearing the cost of testing and treatment more than the virus itself. They are left wondering how they will pay, and when they might have to pay these bills, as well as what will happen if they cannot work or lose their job.

In their decision-making, individuals have to manage the potential risks between health and finance. The American private insurance industry designed around a neoliberal rhetoric of individual responsibilization is complex to navigate and is permeated with uncertainties. We argue that risky health behaviours—such as the deferral of care—are reinforced by the unequal exposure to these uncertainties. The most vulnerable segments of the population not only have to manage the burden that these uncertainties entail, but also potential detrimental effects on their health. This situation exemplifies the inefficiency of a system based on segmented risk in dealing with a mass problem such as the current pandemic.

A refrigerated truck is seen next to Wyckoff Heights medical center in New York City. Photograph: Pablo Monsalve/Corbis via Getty Images

In contrast to public healthcare which is premised on the ‘pooling’ of risks together, which are distributed across the population as a whole (for instance, see the Canada Health Act), the private healthcare model has been premised on the ‘unpooling’ of risks, creating different markets for risk by disaggregating the population into different risk groups. Following this principle, insurance companies manage their clients by sorting them in specific ways based on a variety of information and criteria. This triage produces categories of “standard, sub-standard and uninsurable risks” (Ericson et al. 2000, 534). Therefore, the cost for protection, as well as the kind of protection they offer, is not homogenous and results in “standard, sub-standard and uninsurable” clients. This technique, which takes into account sociodemographic characteristics and medical history is seen as a way of democratizing health insurance by giving seemingly fair access to individuals with various health conditions, and is presented as more capable of mitigating risk through its disaggregation into more flexible market arrangements (Mulligan 2016).  However, in reality, the ‘unpooling’ of risks through complex financial arrangements has led to the segmentation of healthcare across social classes and consequently fosters various health behaviours in regard to the risks associated with the pandemic.

Private insurance companies take advantage of the uncertainty inherent in these complex and opaque arrangements in order to extract profits from their clientele, charging high premiums for a growing number of ‘pre-existing conditions’ (Mulligan 2016). Ways in which value is rendered unclear include hiding administrative costs or externalizing costs to care providers or even to patients by promoting self-assessments. Insurance companies actively “game” the system to extract as much profit as possible from their clientele (Mulligan 2016). In addition, insurance plans change frequently, and individuals often alternate between insurers to benefit from various timely offers and save on their premium payments. When these recurring changes are coupled with the profit-seeking goals of private insurance companies, individuals justifiably become uncertain of what is covered by their insurance plan. Seeking healthcare services, treatment or tests, becomes an uncertain and often financially risky decision to make.

In the context of the pandemic, people may encounter problems when trying to prove to their insurers that their treatments were related to the novel coronavirus. For example, Christopher Hoffman, whose treatment for what was deemed a “pneumonia” amount to $US 3,800 of out-of-pocket costs, says that he does not know what his insurance company will cover as he cannot prove that his illness was related to the coronavirus (Riordan Seville & Lehren April 2020). Thus, the American healthcare system creates uncertain situations in which deferring care becomes a rational option even at a time of pandemic.

In a recent article in The Guardian (Holpuch April 2020), American healthcare practitioners note that individuals often refrain from getting tested due to concerns about healthcare costs and high debt: “More Americans are afraid of paying for healthcare if they became seriously ill (40%) than are afraid of getting seriously ill (33%), according to a 2018 poll by the University of Chicago and the West Health Institute.” (Holpuch April 2020) During the COVID-19 pandemic, uncertainty regarding coverage has only been reinforced through rapid and ongoing changes in public policies and private coverage. Ultimately, risky health behaviours reflect the unequal exposure to the uncertainty fuelled by the neoliberal rhetoric of the private medical insurance industry.

Since the system is not adapted for far-reaching public responses, as well as clear-cut and inclusive insurance policies, many individuals will remain afraid of potential treatment costs. The pandemic highlights that uncertainty regarding healthcare services and costs, triggered by the private and profit-driven insurance model, reproduces inequality, endangers citizens, and erodes social solidarity.

References

Abrams, A. (2020, March 19) “Total Cost of Her COVID-19 Treatment: $34,927.43.” Time.

Ericson, R., Barry, D., & Doyle, A. (2000). The Moral Hazards of Neo-Liberalism: lessons from the private insurance industry. Economy and Society, 29(4), 532-558.

Holpuch, A. (2020, April 16). “Profit Over People, Cost Over Care: America's Broken Healthcare Exposed by Virus.” The Guardian.

Mulligan, J. (2016). Insurance Accounts: the cultural logics of health care financing. Medical Anthropology Quarterly, 30(1), 37-61.

Riordan Seville, L. & Lehren, A. W. (2020, April 11). “Got Coronavirus? You May Get a Surprise Medical Bill, Too.” NBC News.