Families held hostage by health-care costs

WASHINGTON — Single parent Donna Johnson, an office manager for a private school near Baltimore, lives on $42,000 a year and counts herself lucky that she doesn't have to work two jobs to afford health insurance for her children.

The reason, she says, is that for $57 a month, Maryland allows her to enroll her son Evens Cross, 12, and daughter Josie Cross, 9, in the state's version of the State Children's Health Insurance Program, or SCHIP, which accepts families earning as much as three times the poverty level: $51,510 for a family of three.

That's a lot cheaper than adding the kids to her individual HMO policy, which she said would jack up her monthly $200 premium to $500 or more.

"It helps out abundantly," said Johnson, who owns a town house. "It covers their eye exams, it covers their annual physicals, and if they get sick, it covers that. Their doctor knows them. If there is a problem, the doctor will take my call. ... You sleep better, because anything can happen. And if you don't have insurance coverage, who are you going to turn to?"

Throughout the nation, there are families like the Johnsons, working hard to make ends meet. Many have full-time jobs but seldom take vacations. They meet monthly bills for basics such as food, car insurance and housing but have little or nothing left for dining out, college savings or band uniforms.

Without affordable health coverage for their children, many say, insurance costs and medical bills would threaten to break the family budget.

It is families such as these who are at the center of the political controversy in Washington that will come to a head Thursday, when the Democratic-led House attempts to override President Bush's veto of an expansion of the children's-health program Congress passed last month by sizable bipartisan majorities.

The expansion would boost federal tobacco taxes to pay for the program, raising the levy to $1 a pack on cigarettes, an increase of 61 cents.

The fight, playing out in television and radio ads and in plenty of arm-twisting on Capitol Hill, is over how much money to spend — and on whom to spend it.

At a current cost of $5 billion a year, SCHIP provides health coverage to about 6.6 million people, including 6 million children. It was designed for families that earn too much to qualify for Medicaid but not enough to buy insurance on their own.

The new legislation would expand the decade-old program by $35 billion, for a total of $60 billion over the next five years, enough to boost enrollment to about 10 million kids.

The president has repeatedly criticized the proposed expansion as an excessive governmental intrusion into health care that would siphon middle-class families away from private insurance.

He favors a more limited $5 billion increase, for total funding of $30 billion over the period, although recently he said he might be willing to go higher. Bush thinks the program should focus on serving children from families that earn less than twice the poverty level: $34,340 for a family of three and $41,300 for a family of four.

According to the Urban Institute, a Washington think tank, about 70 percent of the children who would gain or retain coverage under Congress' bill are from families whose incomes are at, or below, twice the poverty level.

The program already grants states considerable leeway to cover kids above that level, and those that do generally require higher-income families to pay modest premiums.

The legislation preserves that flexibility and would allow states to cover children from households making as much as three times the poverty level fairly easily. That means limits of $51,510 for a family of three or $61,950 for a family of four, above the amounts Bush favors.

The bill's backers point out that, according to the Congressional Budget Office, Bush's proposed funding is too little even to maintain coverage for children already in the program. They accuse the president of withholding needed money for uninsured children at home as his administration spends hundreds of billions on the war in Iraq.

In Salisbury, Md., Nikki Nelson has watched her son, Alexander, who will turn 2 in December, suffer a string of illnesses, including salmonella poisoning that required hospitalization, croup, ear and eye infections and a tear-duct problem that required surgery.

"He's had so much happening," said Nelson, a customer-service representative for a global-positioning-system tracking company.

As she and her husband, Seth, both 26, struggled to keep Alexander healthy, the family's annual income peaked at about $41,000 and at times dipped to $35,000. After paying $570 a month for their mortgage, $400 a month for child care, plus the cost of food, car insurance and other bills, there wasn't much left for health insurance, Nikki Nelson said.

She pays $32 a month for health coverage for herself through her job. Putting Alex on the policy would increase the monthly premium to $250. That's far more than the $57 a month the family pays for Alex to be in the state program, which covered all of his medical bills, including the surgery.

"If we didn't have this program, honestly, my husband and I would probably be working two jobs apiece to pay for the health care," Nelson said. "We can't afford to do the extras. We don't eat in restaurants; we don't do McDonald's; we don't do any of that stuff."

Last month, Seth Nelson lost his job as a salesman at a company that sells building supplies. The family's annual income plunged to $19,500, barely above the poverty level of $17,170 and well within Maryland's SCHIP eligibility limits.

For now, the only one going without health insurance is Seth Nelson.

Material from The Seattle Times archives is included in this report.