Debt is a condition that can plague the uninsured long after they’ve recovered from whatever brought it on in the first place. Nearly half of all uninsured young adults have problems trying to pay off bills—taking second and third jobs, being hounded by collection agencies. Some analysts have noted the oppressive effect this can have on the economy at large: Debt pigeonholes the young into unwanted jobs, slowing down the overall job market. “The debt itself is devastating,” says Commonwealth’s Karen Davis. “Credit histories are ruined—it takes years, sometimes lifetimes, to come out from under it.”
Giselle Reesey, a 20-year-old aspiring musician who works at a Williamsburg coffee shop called Verb, is still reeling financially from what she described to me as “a really, really bad year.” Last winter, she developed a rare blood infection that spread to her liver and kidneys and cost her $3,000 to treat. At the same time, her husband, Ryan, who is 24 and waits tables at Suba, an upscale downtown restaurant, needed to have his tonsils removed. The surgery cost close to $5,000. They set up an installment plan and are expected to pay about $60 a month, not always an easy sum to come up with. “A few months ago, we were living in this hellish pocket of Bushwick and our apartment was robbed,” Reesey told me. “I literally went to the doctor’s office and was like, ‘Here, I was just robbed, all I have is this $12. I’ll make it up next month.’ ” Most frustrating about the debt, she said, is that the payments make it that much more unlikely that she and her husband will ever be able to afford insurance.
Debt isn’t simply a problem for the uninsured who incur it; unpaid medical bills reverberate through the whole system. “It filters down to the rest of society,” explains Cunningham. “Either the hospitals or the physicians absorb the cost, making the funding streams less certain and their capacity to deliver services more constrained. And premiums for everyone else go up.” This point has become a favorite among those advocating a system overhaul. “We, in essence, have become the insurers of the uninsured,” Victor Campbell, then-chairman of the Federation of American Hospitals, said last month when unveiling a proposal for universal coverage. And in January, when Arnold Schwarzenegger announced that he would make insuring every Californian the cornerstone of his second term as governor, he sold the plan by stressing the “hidden tax” paid by the insured to offset the debt created by the uninsured. As a stopgap measure to prevent the cycle of debt and higher costs from spiraling even more out of control, a handful of states have proposed raising the age under which children remain eligible to receive care under their parents’ plans. (In New Jersey, those as old as 30 now qualify.) Massachusetts has gone the furthest, passing a landmark plan to make health insurance like car insurance: legally required and relatively affordable. Yet for all the reform on a state level, analysts note that states don’t have the revenue to sustain these programs for the long term. As Cunningham puts it: “Eventually, the federal government will have to step in and figure out a way to make it all work.”
Facing nearly $40,000 in medical bills, Ondrejcak pleaded with the hospital. The only thing he could do, they told him, was apply for Medicaid assistance. He sorted through bank statements and pay stubs and submitted his claim: His documented income for the month of the surgery came to $507. (He didn’t include tips or off-the-books work.) A paltry sum, especially by New York standards. And yet a few weeks later he received a letter from Medicaid denying his request. The limit for assistance was an even paltrier $352.10. How was he expected to pay nearly $40,000 because he made $1,800 a year too much? File for an appeal, the hospital suggested. On October 13, 2004, Ondrejcak presented his case at the Medicaid Assistance Program on West 34th Street. “It was all very cut-and-dry,” he said. “Me, a woman representing Medicaid, and a judge-type guy. She was like, ‘I’m sorry, there’s nothing I can do,’ and the other guy gives me a look like, ‘Dude, you’re fucked.’ We all agreed in this itty-bitty room that there was nothing they could do to help me, but they all knew I was going to leave $40,000 in debt.”
Notes from creditors began appearing in his mailbox, and Ondrejcak grew desperate. “Here’s the deal,” he told the hospital. “I’m either going to file for bankruptcy, which will ruin my credit and ensure that you’ll never get any money, or I’m going to look into a malpractice lawsuit.” On March 20, 2005, almost exactly a year after the surgery, he received a letter stating that his hospital costs had been reduced—by 100 percent. The other doctors followed suit, offering substantial discounts, and in the end, Ondrejcak had to pay only $1,700. It was an extraordinary conclusion for him, but a common one for hospitals. When the sums are so high that a payment plan isn’t feasible, hospitals are often forced to simply write off the treatment as a loss. New York hospitals alone provide $1.8 billion in uncompensated care annually.