When you are denied health insurance

Sometimes even healthy people can't get a company to sell them a policy

msnbc.com Have you ever had irregular periods? A cesarean section? Allergies? You may find yourself unable to get health insurance coverage. Jacqueline Ruess was lying on a bed inside a hospital in Boca Raton, Florida, still woozy from anesthesia but hoping that, maybe just this once, she'd caught a break. She'd had laparoscopic surgery in order to examine a growth her gynecologist thought might be ovarian cancer. Ruess, who was 34 at the time, in the fall of 2001, feared that her two young boys, whose father died from a congenital heart defect three years earlier, were on the verge of losing her as well. "It was probably the darkest week of my life since my husband passed away," she recalls. But as Ruess regained consciousness, she saw her own mother at her bedside, looking relieved. She began to process what she was hearing: You're going to be OK. The growth was on the fallopian tube, not her ovary — a far less worrisome situation. Soon after, a pathology report would confirm that the tumor itself was benign. "The only thing I could think about was my boys," Ruess says, "and the great relief in knowing I was going to be around to raise them after all." But four months after Ruess's medical crisis passed, she faced a financial one. The Insurers Administrative Corporation (IAC), the company in Phoenix that managed Ruess's health care policy, completed what it says was a routine review of her records and discovered what it called evidence of a preexisting gynecological condition. Because Ruess had not disclosed the symptom on her application, her insurer said she had never been eligible for coverage of gynecological problems. The result: Ruess was on the hook for the cost of her surgery, which, including doctor and hospital bills, amounted to more than $15,000. Ruess was flabbergasted. "I was — please forgive me for lack of a better term — pissed off," she says. What IAC called a preexisting condition was a one-time notation in her file regarding "dysfunctional uterine bleeding" — that is, irregular periods, a common issue that at some point affects between 10 percent and 30 percent of women in their reproductive years. At the time she experienced erratic periods, Ruess had lost her husband and her father had died, too, which is why her doctor attributed the symptom to stress. Reassured that there was nothing medically wrong, Ruess quickly put the problem out of her mind and didn't even bother to fill the prescription for the birth control pills her doctor had given her to regulate her cycle. Even though there was a question on her insurance application about "abnormal menstruation" in the past seven years, she didn't think it applied to her because her symptom hadn't been attributed to an underlying medical problem. "It never crossed my mind to mention it on the form," Ruess says, noting that she'd been forthright about a more serious issue, her son's asthma, when she applied to another insurer for a policy for him. She'd correctly predicted that he would be declined coverage because of it. "If I was going to hold back anything," she says, "I would have held back that information." Here, too, she'd acted in good faith, she explained to IAC. Her irregular periods had nothing to do with the growth on her fallopian tube. The insurer, she felt, was simply looking for an excuse to avoid paying her bills. But IAC wouldn't budge and further informed Ruess she actually owed a few hundred dollars to her insurer, because her premiums should have been higher. Frantic, Ruess contacted attorneys, journalists, even the governor of Florida. Slide show Perspectives on health care A Daryl Cagle editorial cartoon roundup on the state of the U.S. health system. MSNBC "I am a healthy and honest 34-year-old widow raising two small children alone," she wrote in a formal complaint to the Arizona Department of Insurance in April 2002. "I am desperate." (A spokesman for IAC says that had the information on Ruess's application been "complete and accurate," she'd have been advised that the policy would have limitations, and she could have opted to apply elsewhere.) 1 in 4 Americans lack adequate coverage Ruess never expected to find herself in such a circumstance. She'd grown up in a comfortable, middle-class household; even after her husband died in 1998, she was able to remain an at-home mom because of his generous life insurance policy. She'd taken pains to make sure she and her sons were insured, first with a policy carried over from her husband's job (the federal COBRA law allows a spouse to continue coverage for three years after a death), and then by carefully researching and purchasing insurance at a cost of $350 a month for her and one of her sons. (She was able to get coverage for her asthmatic son from the state.) In other words, she did everything right. Yet she was facing major debt and was soon to be without thorough coverage altogether. Ruess says she told a supervisor in IAC's underwriting department that she hoped he'd never find himself or a family member in a similar situation. "I couldn't believe that I was an American citizen," she says. "As a middle-class woman who was more than willing to pay for my medical benefits, I was getting the short end of the stick." And the statistics suggest that women such as Ruess, who buy their insurance on their own, are particularly vulnerable to winding up in similar straits. The health insurance crisis affects millions of Americans. At any given moment, the United States Census shows, 47 million people are uninsured. Some 25 million more are underinsured, meaning their benefits aren't sufficient to meet their needs, according to a recent study by the Commonwealth Fund, a health care policy foundation in New York City. Combine those two groups and the total suggests that almost one fourth of Americans don't have adequate health benefits. But it's those who must purchase their own coverage, typically because they are self-employed or work for a company that doesn't provide benefits, who are in a uniquely precarious position. More than 27 percent of people who are self-employed have no insurance, compared with 13 percent for those who work for large companies. If you're buying your own health insurance, not only will you pay higher premiums than those who get a bulk rate as part of a group policy, but insurers in most states have much greater leeway to turn you down if they think their odds of losing money on you are too high. When confronted with an applicant who has any kind of medical history (including routine issues such as allergies, a past cesarean section delivery or acid reflux), insurers are usually perfectly free to charge much higher rates or to deny coverage altogether — leading to an entire category of women who are essentially uninsurable. A woman might not realize she is uninsurable until she needs coverage and finds that no one will sell her a policy. Or she might be hit with this information after months or years of dutifully paying premiums, when filing a major claim provokes the insurer to review her records. Such practices are not only legal but, from the standpoint of the insurance companies, also entirely logical: They are good for business.