Laboring by the Insurance Clock

I'm feeling taciturn and mildly mopey today because I have a nasty sinus headache and the Tiger (who has tonsillitis) just yakked up his lunch. So, from the department of "it could be way worse" comes this news about how the recession is stranding people without health care. The New York Times (via Broadsheet) reports that when the Archway cookie factory in Ashland, Ohio (yes, Ohio again!) went belly-up two months ago, it left its employees stuck without health insurance.

While no one has died (yet) as a result, the company's irresponsibility made it shockingly hard for one baby to find its way into the world, as the Times recounts:

[Starla] Darling, who was pregnant when her insurance ran out, worked at Archway for eight years, and her father, Franklin J. Phillips, worked there for 24 years.

“When I heard that I was losing my insurance,” she said, “I was scared. I remember that the bill for my son’s delivery in 2005 was about $9,000, and I knew I would never be able to pay that by myself.”

So Ms. Darling asked her midwife to induce labor two days before her health insurance expired.

“I was determined that we were getting this baby out, and it was going to be paid for,” said Ms. Darling, who was interviewed at her home here as she cradled the infant in her arms.

As it turned out, the insurance company denied her claim, leaving Ms. Darling with more than $17,000 in medical bills.

I couldn't fathom how Starla Darling could be left stranded with those bills if she was still insured. It turns out the company misinformed her - or to put it bluntly, Archway lied. The Mansfield News Journal connects the dots:

On Oct. 4, [Darling] received a certified letter stating that, as of two days from then, she would no longer have a job or health insurance.

Darling says she asked and doctors agreed induce labor the next day, before the insurance expired Oct. 6.

After seven hours, with doctors about to send her home because the effort to induce was not taking, she began hemorrhaging.

"My placenta tore away from the wall and both the baby and I were literally inches away from death," she said. "We were rushed into emergency C-section, with both of us hanging tight to our lives."

Darling said doctors had to cut her open with no time to administer pain medications. Afterward, she learned her health insurance had already expired, despite the certified letter. Archway had stopped paying its part for employee health insurance months prior.

"Apparently, employees were paying their share of health insurance, but it has been reported that the company had not been paying since June," Meghan Dubyak, a spokeswoman for U.S. Sen. Sherrod Brown, told the News Journal on Friday.

Ugh. It's one thing for a company to slide into bankruptcy; it's quite another to lie to your employees. Also, can I just note that the credit crunch only began in September, not June? Archway had a problem for a good long time before credit froze up. It obviously had other mismanagement issues.

Former Archway employees are really stuck. Most can't afford COBRA coverage anyway on their meager unemployment benefits. But even if they could, their former employer's actions have rendered them ineligible. The Wall Street Journal gives more detail (via Michael Panzner at Daily Markets):

Archway was self-insured — and when it filed for bankruptcy on Oct. 6, there wasn’t enough money in its coffers to cover hundreds of thousands of dollars worth of outstanding health-care claims along with all its other debts.

Workers weren’t eligible for Cobra, a federal act that gives certain laid-off employees the right to temporarily continue health-care coverage at group rates. That’s because Cobra doesn’t apply when a company terminates its insurance plan.

This story is disgusting from start to finish. About the only thing Archway is not culpable for is the hemorrhage Darling experienced. To the best of my knowledge, induction of labor is not a particular risk factor for placental abruption.

Otherwise, Darling's story and those of her co-workers (follow the links above for those other stories) demonstrate why health insurance desperately needs to be de-coupled from employment. Insurance costs are bleeding employers (and indirectly, their employees, whose wages are depressed when premiums rise). As Archway's "ethics" show, a few employers can't be trusted to make their employees' health a priority in hard times. Most perniciously, as the recession/depression deepens, the number of uninsured is going to skyrocket.