Insurance Q&A

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Friday, October 28, 2005

Worker health plans fail checkup

Staff Writer Charlotte Observer
N.C. businesses nearly lead the nation when it comes to killing employee health plans.
Only Missouri had a bigger decline in employer-provided health care from 2000 to 2004, according to a report from the Economic Policy Institute, a think tank partly funded by unions.
The findings prompted North Carolina's largest small-business trade group to renew calls for state health insurance incentives. The N.C. arm of the National Federation of Independent Business also echoed support for a bill in the U.S. Senate that would allow small employers to buy insurance collectively through so-called association health plans.
The clarions come amid national angst over escalating health insurance costs, which have risen an average of 15 percent a year since 2002. EPI and others cite soaring costs as a key reason for employers dropping health plans.
The NFIB and the institute rarely find common ground. They're at polar opposites when it comes to raising the minimum wage, for instance.
However, the EPI study "confirmed what we know," said NFIB spokesman Jim Brown. "It doesn't matter who the source is."
The NFIB supported a General Assembly bill this year that would have extended a $400 tax credit per employee to small employers with 25 or fewer workers. Eligible companies would have to pay at least 50 percent of their employees' health insurance.
The group pulled support when a provision to boost the state's minimum wage by 85 cents to $6 an hour was tacked on. It hopes a stand-alone tax credit bill is reintroduced next year.
Meanwhile, the group hopes the Senate green-lights the Small-Business Health Fairness Act, which would let small businesses pool resources to buy insurance. The bill, co-sponsored by Sen. Elizabeth Dole, R-N.C., is in committee.
More than 1,300 organizations, including the American Nurses Association, the NAACP and insurers such as Blue Cross and Blue Shield of North Carolina, oppose association health plans.
A Blue Cross spokesman said the federal bill would strip state oversight of insurance coverage. Under the proposed law, employers could deny coverage to some now protected under existing statute, and make the appeals process more onerous.
Jim Bitzan owns a Vespa franchise in Charlotte. He hires about a half-dozen workers, all part time.
The state and federal small-business health initiatives whet his appetite.
"If I were able to offer health insurance, I think I could hire full-time employees," he said. "I could take some time off -- I haven't had a day off in 3 1/2 years."
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Tuesday, October 25, 2005

Top Ten Questions Consumers Should Ask About Viatical Settlements

From the New York State Insurance Department

Viatical settlements are sales of life insurance policies on terminally ill people to unrelated investors. Viaticals arose during the early years of the AIDS epidemic, but are now available to other terminally ill individuals. Licensed viatical settlement brokers typically offer suitable policies to viatical settlement companies. The terminally ill insured individual receives an amount of money less than the face value of the policy to use for his or her own purposes, such as medical expenses, travel, final wishes, etc. Investors receive the face value of the policy at the death of the insured.

The questions below relate to viatical settlements.

1) Do you have the required viatical settlement license?

Under New York State Insurance Law, viatical settlement brokers must be licensed. Do not deal with unlicensed viatical settlement brokers. If you are unsure, contact the New York Insurance Department to verify that the broker is licensed.

2) May I see it?

Under New York State Insurance Law, a viatical settlement broker must show you his or her license. If the broker is unwilling to show you a license, do not complete any transactions.

3) May I see a copy of the viatical settlement agreement?

You should make sure you see a copy of the viatical settlement agreement before signing and make sure all the provisions you verbally agreed to are contained in the agreement.

4) How many days do I have to rescind the agreement?

Under New York State Insurance Law, you have a minimum of fifteen calendar days to rescind a viatical settlement agreement.

5) Where is my settlement money deposited once I sign the agreement?

The proceeds from your viatical settlement agreement must be deposited in a New York State bank or other institution approved by the Superintendent of Insurance for proper distribution.

6) How much money is paid as compared to the face amount of the policy?

The amount you are paid as a percentage of the face amount of the policy will vary based upon your life expectancy, current interest rates, etc. If you have certain estate needs, such as funeral expenses; the need to provide for a spouse; etc., you may want to explore other sources of funds, such as reverse mortgages, rather than selling your life insurance policy. You also should check with you insurer to determine if your policy contains an accelerated benefits provision which allows terminally ill insured individuals to collect a portion of their death benefit.

7) How much will be paid as compared to the policy’s cash surrender value?

"Cash surrender value" is the money you are entitled to when you surrender a life insurance policy. Cash values are typically smaller than the face value of the policy. Your payment under your viatical settlement agreement should exceed the cash value of your policy otherwise you would be better off surrendering your policy for its cash value.

8) Who will receive a fee, or other compensation concerning this agreement?

The viatical settlement broker usually receives a fee when completing the viatical settlement agreement. The fee is typically based on a percentage of the viatical settlement agreement in accordance with the contract between the two parties. Such contracts are approved by the New York Superintendent of Insurance.

9) May I review the information booklet before I sign the agreement?

Under New York State Law, viatical settlement brokers should have an information booklet available for your review. You should make sure you fully understand the information in that booklet.

10) Should I consult with any agency providing social, or similar services before I sign the agreement?

Your viatical settlement application should indicate that it is always a good idea before signing a viatical settlement agreement to contact the Department of Social Services (or similar agencies) to determine whether you would be eligible for any government-based financial assistance.

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Consumer Guide to Auto Insurance

News from NYS Insurance Dept.


Superintendent of Insurance Howard Mills today announced that the 2005 Consumer Guide to Automobile Insurance is now available online and in hard-copy form. With New Yorkers enjoying unprecedented auto rate decreases over the past year, the state Insurance Department's annual Consumer Guide is aimed at ensuring that drivers are getting the most for their premium dollar.

The Guide outlines mandatory coverages, such as bodily injury liability and personal injury protection, as well as optional coverages, like comprehensive (i.e., fire and theft), available in New York State and offers practical money-saving tips. Sample auto insurance rates from various New York territories as of July 1, 2005 are also included in the text so drivers can make meaningful comparisons.

"As auto rates continue to decline in New York State, it is important that New York’s drivers read the Department's current Consumer Guide to Automobile Insurance," Superintendent Mills said. "The Guide offers an excellent overview of typical premium rates in different parts of the state."

The publication is available online through the Department's Web site: A hard-copy version of the Guide can be acquired free of charge by those without Internet access by calling 1-800-342-3736.

"With nearly 200 state-licensed auto insurers competing for your business, drivers owe it to themselves and their families to shop around for the best coverage at the best price," Superintendent Mills stated. "The overwhelming majority of New York drivers will be saving money on their auto insurance this year. Make sure you are one of them."

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Monday, October 24, 2005

Fewer Pennsylvanians Get Health Insurance Through Their Jobs

Keystone Research Center finds 494,000 fewer Pennsylvanians Covered by
Employer-Provided Health Insurance Since 2000

HARRISBURG, Pa., Oct. 21 /PRNewswire/ -- The number of Pennsylvanians with
employer-provided health insurance declined by 4.1 percent between 2000 and
2004 according to a new study by the Keystone Research Center and Washington
D.C.-based Economic Policy Institute.
The decline means that about 494,000 fewer Pennsylvanians get health
insurance through their employer today than did in 2000. One in seven of the
people who lost employer-provided health insurance coverage in the U.S.
between 2000 and 2004 lived in Pennsylvania.
"Ask most people what they think a good job is and you'll hear them answer
'one that provides health insurance,'" said Mark Price, a labor economist at
the Keystone Research Center. "By this widely accepted measure, the quality of
many jobs in Pennsylvania has declined over the last five years."
"The only real alternative for workers not earning a poverty wage who lose
insurance is to purchase coverage on their own. To replace employer provided
family coverage in 2004 would have cost Pennsylvania families about $9,000 or
21 percent of the state's median household income of $42,941," said Price.
"The loss of employer-provided health insurance is clearly a financial
challenge for middle-class families. We have created a world-class health
system that too few businesses and families can afford."
In the United States as a whole, over the last four years, about 3.7
million fewer people had employer-provided health insurance, while Medicaid,
including the State Children's Health Insurance Program (SCHIP), increased
nation wide by nearly eight million participants. This is a significant shift
from private sector coverage to public sector coverage, especially in the case
of children.
Although nationally, 2.5 million youth lost employer-provided health
coverage between 2000 and 2004, many were caught by the public sector safety
net as indicated by the enrollment of an additional 4.8 million more children
in both Medicaid and the State Children's Health Insurance Program (SCHIP)
over that same time period.
Because some employers have transferred the responsibility of insuring
their employees onto the public system, local governments in New York have
begun to adopt measures that require businesses to provide health insurance to
their workers, or pay into a government fund that provides coverage to
"In Pennsylvania we have to begin to think seriously about the
consequences of employers shifting the cost of doing business onto the
taxpayer." Price went on to say "Good employers would welcome reforms that
require their competitors who now shift health costs to the taxpayer to offer
In the United States as a whole, according to the EPI study, the number of
Americans without health insurance rose by over six million, from 39.8 million
in 2000 to 45.8 million in 2004. This increase was due primarily to the
precipitous decline in employer-provided health coverage for workers and their
No state in the Union experienced a statistically significant increase in
employer-sponsored health-insurance coverage. The states with the largest
declines, all over six percent were Maryland, Maine, Missouri, North Carolina,
and Wisconsin.
In the U.S. workers among the bottom 20 percent of hourly wage earners
were the least likely to have employer-provided coverage; 24.4 percent of the
bottom quintile were covered compared to 77.5 percent for workers in the
highest wage quintile.
However, no category of workers was insulated from the loss of coverage.
Even full-time, full-year workers and workers with a college degree
experienced declines in coverage between 2000 and 2004. Full-time, full-year
workers' coverage rates fell by 2.3 percentage points and college graduates'
coverage rates fell by 2.8 percentage points.
"These data demonstrate that the economy isn't delivering for families,
due to out of date policies, strong productivity growth is not translating
into a better life for Pennsylvania's families," said Price.
The EPI briefing paper Prognosis Worsens for Workers' Health Care, by
Elise Gould can be found on the EPI Web site at

The Keystone Research Center is a Harrisburg-based research organization
and leading source of independent analysis of Pennsylvania's economy and
public policy. Much of KRC's research is available free of charge on the web

SOURCE Keystone Research Center
Web Site:
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More employees sharing health-insurance costs

By Annemarie Franczyk
Business First of Buffalo
Updated: 8:00 p.m. ET Oct. 23, 2005
Greater numbers of area employees are boning up on their insurance terms.

Cost sharing, for example, means the boss is passing a portion of health-insurance expenses on to them. And out of pocket is where they're digging to pay for it.

According to an Internet survey of subscribers to Business First's daily e-mail edition, far more workers chip in a percentage of the cost of their health insurance today compared to five years ago.

The survey, conducted from Oct. 14 to Oct. 17, showed that about 80 percent of employers who offered health-insurance benefits required employees to pay for at least a portion of the coverage. During a similar Business First survey in 2000, the figure was closer to 50 percent.

MidCity Office Furniture Inc.'s 11 employees are among them.

"Up to four years ago, we paid 100 percent for it," said Kurt Amico, president. "We had to make employees at least pay the increases. They're now paying 40 percent of the total cost."

The Buffalo company's employees are among the 88 percent of American workers who contribute to their health-care premiums, according to a national survey by Benefits USA. The survey results indicate that during the last several years, the number of organizations that offer health care at no cost has decreased to 12 percent.

The study predicted that more large and small employers will ask employees to shoulder more of the burden. Fully 43 percent of employers reported increasing the employee portion of their health-care premiums in the last year, and 33 percent increased deductible levels.

MidCity did something similar. In addition to shifting the cost, the company took a plan with increased copayments to lower the overall cost of the benefits.

"But there's only so much you can do with that until you go with a lesser plan," Amico said.

Those employers that do offer any kind of assistance with health insurance most often will do so only for full-time workers, and often not extend the benefit to coverage for their families. The BISON Scholarship Fund Inc. is one such employer, but workers there have the option to have pre-tax deductions taken from their paychecks to cover family benefits, up to $5,000 annually.

"We are a small not-for-profit organization, and although the company covers the employees' health insurance, we are unable to assist with employees' family benefits," executive director Kathleen Christy wrote in her survey response. "Although difficult, we cannot justify taking donors' contributions and using them anywhere but for our program expenses. This is just a fact of life and employees know and understand that - in order to keep their places of employment viable and healthy."

Appliance Associates of Buffalo, too, provides health benefits for its 20 employees, but additional coverage is paid for by the workers. Some big employers have made headlines by switching to a single carrier, but Appliance Associates continues to offer the area's three major insurers: BlueCross BlueShield of Western New York, Independent Health and Univera Healthcare.

"We feel it's the cost of having employees here. It's the cost of doing business," said Kevin Telaak, vice president.

A handful of businesses are coupling slightly scaled-back managed-care plans with reimbursement accounts - a combination that some in the industry are calling "consumer-driven lite" plans. Two years ago, Aurora Consulting Group Inc. overhauled its health benefits by shifting to a single carrier and asking employees to pay any premium increases. The money saved helped the company fund $1,900 health-reimbursement arrangements for each of the 54 full-time employees. Workers can use the accounts to cover any out-of-pocket expenses such as copayments, over-the-counter drugs and dental and vision care. The combination is a retention tool, said President and CEO Jeff McCaskey.

"We're always looking at how we can retain people. The focus is on quality of life," McCaskey said.

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When Health Insurance Is Not a Safeguard

CAMBY, Ind. - Until the fourth trip to the hospital in 1998, Zachery Dorsett's parents thought their son was an average child who was having trouble getting over a passing illness. He was 7 months old, and it was his second case of pneumonia.

The Dorsetts, Sharon and Arnold, were concerned about Zachery's health, but they were not worried about the financial consequences. They were a young, middle-income couple, with health insurance that covered 90 percent of doctors' bills and most of the costs of prescription drugs.

Then the bills started coming in. After a week in the hospital, the couple's share came to $1,100 - not catastrophic, but more than their small savings. They enrolled in a 90-day payment plan with the hospital and struggled to make the monthly installments of nearly $400, hoping that they did not hit any other expenses.

But Zachery, who was eventually found to have an immune system disorder, kept getting sick, and the expense of his treatment - fees for tests, hospitalizations, medicine - kept mounting, eventually costing the family $12,000 to $20,000 a year. Earlier this year, the Dorsetts stopped making mortgage payments on their ranch house, in a subdivision outside Indianapolis, because they could not afford them. In March, they filed for bankruptcy.

"Zach was really mad at us when we told him we were going to lose the house," Mrs. Dorsett said. "We told him we had to make a choice: whether to pay for medical bills or the house."

She added: "I didn't want the kids to hate their father for working all the time, but I also didn't want them to think we were irresponsible. I was worried about Zach feeling guilty or his sister blaming him that she has to leave her friends. But whatever we gave up is a small price to pay for his health."

Never have patients had so many medical options to extend, enrich or alter their lives. But these new options are expensive, and with them has come a change for which many Americans - even those with health insurance - are financially ill prepared.

After decades in which private and government insurance covered a progressively larger share of medical expenses, insurance companies are now shifting more costs to consumers, in the form of much higher deductibles, co-payments or premiums. At the same time, Americans are saving less and carrying higher levels of household debt, and even insured families are exposed to medical expenses that did not exist a decade ago. Many, like the Dorsetts, do not realize how vulnerable they are until the bills arrive.

Lawyers and accountants say that for the more than 1.5 million American families who filed for bankruptcy protection last year, the most common causes were job loss and medical expenses. New bankruptcy legislation, which went into effect Oct. 17, requires middle-income debtors to repay a greater share of their debt.

The Fight for Solvency

The Dorsetts' filing came after years of accumulating relatively modest bills, often just co-payments on doctor visits or prescriptions. Almost since Zachery's birth, they had finished each year with more credit card debt than they had the year before. Even when they took out a second mortgage to pay off their credit cards, by the end of the year they were in debt again, with higher mortgage payments. And each year, their projected expenses were greater.

On a late summer morning, Mrs. Dorsett, now 32, sat with her son in Room 4013 at St. Vincent Children's Hospital in Indianapolis as a colorless infusion of immune globulin, a treatment made from blood plasma, dripped slowly into his left arm, supplying the antibodies that his immune system does not produce.

The monthly infusion, which has become a regular part of his childhood along with soccer practice and family camping trips, costs $54,000 a year, of which the Dorsetts will pay more than $5,000.

"My friends don't understand it," Mrs. Dorsett said, looking back at the family's relentless, inevitable process of insolvency. "They think, How could it get so bad so quick? Unless you have a sick kid, you don't know what it's like."

For the Dorsetts, this is what the end looked like, according to the family's bankruptcy filing: They had $1,431 in their checking and savings accounts; they owed $29,146 on various credit cards; and after refinancing their house to pay down their credit cards, they could no longer afford the payments on their house or car.

Mr. Dorsett, who works on commercial heating and air conditioning systems, sometimes stitching together 90-hour weeks, earns $68,000 a year. It is more money than his father ever made, but not enough to cover the bills, especially with the monthly infusions starting.

Mrs. Dorsett recounts the impact their medical expenses have had on the family: They buy their clothing at yard sales, and skip vacations and restaurant meals. Mr. and Mrs. Dorsett argue, like many couples, mainly about money. Mr. Dorsett has had to work nights and weekends, with little contact with his wife and children; Mrs. Dorsett has tried to create a home for the children.

"We don't live a frivolous life, but I need to make my kids' life normal," she said. "They still need bikes. My husband says, 'Kids in the third world don't have those things.' I say, 'We don't live in a third world country.' "

As the bills mounted, it was Mrs. Dorsett who forced her husband to acknowledge that he could not simply work more hours. "I showed him, even if I went back to work, we'd still be in debt in 10 years," Mrs. Dorsett said. "Our kids could not go to college."

In a study of 1,771 people who filed for bankruptcy, reported this year by four researchers at Harvard and Ohio University, 28 percent said the cause was illness or injury. Most were middle class, educated and had health insurance at the start of the treatment. Many lost phone service, went without meals or skipped medications to save money. Although the study relied largely on people's own accounts of their finances, the figure suggests that as many as 400,000 American families file for bankruptcy each year because of medical expenses.

"Not only are the bills higher, but the way we pay for care has changed," said Elizabeth Warren, a professor at Harvard Law School and one of the study's authors. "My mother always carried a bill with the doctor, but every dollar she paid went to principal.

"Today, the doctor takes a credit card, and a family might be paying that off at extraordinary interest rates. So people may recover physically from major medical injury, but may not recover financially."

A Shift in Burden

Though health care costs have been rising for decades, changes in insurance starting around 2001 have put more pressure on consumers, especially those who need the most treatment, said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research group financed primarily by the Robert Wood Johnson Foundation.

The families driven into bankruptcy by these costs include those dealing with both rare and common medical conditions, and others who simply saved too little or owed too much in the false confidence that there would not be unforeseen medical problems, or that their insurance would protect them.

In Pfafftown, N.C., Glenda and Robert Lee Gantt filed for bankruptcy protection after Mrs. Gantt's rheumatoid arthritis forced her to give up working as a security guard. In Houston, Roy and Patsy McKanna filed for bankruptcy after helping their adult daughter pay for breast cancer treatment.

"We were just trying to keep them from sinking until things got better," said Mrs. McKanna, 71. "They took bankruptcy a little more than a year before we did. We managed our budget for 52 years. You never know what life's going to throw at you."

In the 1990's, as medical expenses rose faster than inflation, insurance companies limited costs of coverage by limiting patients' treatment options through the system known as managed care. Even as hospitals and drug companies introduced expensive new treatments, out-of-pocket costs for patients actually fell during the decade.

But as consumers have objected to the limits imposed by managed care, insisting on more choice, the trade-off has been higher insurance premiums and higher out-of-pocket costs, said Arnold Milstein, medical director of the Pacific Business Group on Health.

Dr. Milstein said companies had two rationales for shifting expenses to consumers: to "share the pain" that came with higher overall costs and to encourage patients to seek care judiciously.

"But what if you're unlucky enough to get sick?" he said. "Now you pay a lot more out of pocket. One of the unintended consequences of cost-shifting is that sicker people - the ones who most need insurance - are the ones who end up paying more of their bills."

From 2000 to 2005, employees in the most common type of insurance plan, known as preferred provider organizations, saw their premiums for individual coverage rise 76 percent, to $603 from $342, while their deductibles - the amount they pay out of pocket before insurance kicks in - rose almost 85 percent, to $323 from $175, according to the Kaiser Family Foundation. By 2003, a survey by the Center for Studying Health System Change estimated, 20 million American families had trouble paying their medical bills. Two-thirds of these had health insurance.

Twists of Fate

Mr. and Mrs. Dorsett never expected to be part of this group. They met more than a decade ago at a gas station where she worked part time while studying to be a nurse.

Mr. Dorsett liked to talk on his way home from work. Both wanted to have a big family. They married with plans to have six children. Mrs. Dorsett hoped to finish her studies and work as a nurse; Mr. Dorsett thought she should stay at home with the children.

But shortly after Zachery was born, they knew something was not right. He got the same illnesses or infections as other children, but while others got better, he would get worse. A cold would turn into bronchitis; a sinus infection would require 45 days of antibiotics, and often turn into pneumonia. He needed follow-up doctor visits, refills on prescriptions, X-rays, CAT scans - each time ringing up co-payments of $10, $15, $30 or more.

On a blazing summer evening, the Dorsetts sat at their kitchen table. Their one extravagance, a large-screen television, occupied the children: Zachery, 8; Dakota, 5; and Jessica, 4. Mrs. Dorsett bought the television with her mother as a present for her husband, from money she had earned baby-sitting. Mr. Dorsett, she recalled, had complained about the expense.

At 40, Mr. Dorsett has a ruddy complexion, buzzed blond hair and a light beard. As he nursed a can of supermarket-brand cream soda, he seemed to wish he could turn back the calendar, find some alternative to bankruptcy court. It is a source of recurring friction between them: Mr. Dorsett never wanted to file; Mrs. Dorsett convinced him that there was no alternative.

"I make good money, and I work hard for it," Mr. Dorsett said. "When we filed for bankruptcy, I felt I failed."

He said one of his hardest moments was telling his father about the bankruptcy. His father had worked two or three jobs during hard times, but always managed to pay his debts. Arnold Dorsett made more money than his father ever had, he said, but what good did it do him?

"At work," he said, "the single guys say our insurance is good. Well, it's good for them, because they don't have kids, or don't get sick. When you have a kid who's chronically sick, it's totally different."

On his long days, Mr. Dorsett usually skips lunch rather than spend $6 or $7 at a fast food restaurant. He wishes he could take the family to the Grand Canyon, or afford a house where the girls could have their own bedrooms. But when asked about his sacrifices, he said the luxury he missed most was time, not money. "Zach and I had no relationship until two years ago," he said. "Dakota hardly ever talked to me. I was putting in 80, 90 hours a week, not having a relationship with my children."

While Mr. Dorsett works, Mrs. Dorsett juggles child care with the seemingly endless wrangling with insurance companies and, until the bankruptcy filing, with creditors.

Managing a Medical Mystery

On an August morning at home, Mrs. Dorsett prepared a lunch of corn dogs and macaroni and cheese while Zachery got ready for soccer camp. By all appearances, he is a healthy-looking boy with a somber disposition. Though he has missed as many as 42 days in a school year because of illness, he has friends and keeps up with his classes, his mother said. His worst problem at school, she said, is pushing himself too hard.

Until earlier this year, no one knew what was wrong with him. His immune disorder, known as common variable immune deficiency, can be detected through a simple blood test, but as Mrs. Dorsett took him from doctor to doctor, usually with small problems that would not go away, the doctors looked elsewhere. Some treated only the immediate symptoms; others made Mrs. Dorsett feel she was overtreating her child.

"I felt there was something wrong," she said. "But you can't walk into a doctor's office and say you think you know what it is because you saw it online. They're the ones with the prescription pads, and I didn't want to make them mad."

As the family went from one doctor to the next, without a diagnosis of the root problem, the insurance company often questioned the expenses. Why did Zachery need four doctor visits or five rounds of antibiotics for an ailment that most children shook off in a couple of days? Mrs. Dorsett spent days on the phone, often in voice-mail loops, and often long-distance, pleading her case.

"Like when they refused to pay for antibiotics when he had pneumonia" last year, she said. "The antibiotics cost $373, and we didn't have it. But we couldn't just not give it to him. I knew the review board would come around eventually, but he needed the medicine right away. Finally the doctor gave us samples."

She managed the expenses, like many people, by constantly applying for new credit cards, rolling the debt from the old cards into the new ones, which usually came with low introductory interest rates. In a good year, they would have the rolling charges on their credit cards down to $5,000 or $6,000, but the charges always went up again.

Gradually the debts started to catch up with her. When she fell behind on one of her heavily used cards, the company raised the 2.9 percent interest rate to 14 percent. Suddenly, she could not find a card with a low interest rate or a line of credit of more than $5,000, when the family balance exceeded $13,000. She tried playing dumb with the company, saying she was sure she had sent the check. "But they weren't buying it," she said.

With Mr. Dorsett's insurance, Zachery's bills were not astronomical, but they were just beyond what the Dorsetts could afford. Finally, Mrs. Dorsett asked one of the hospitals for assistance. "They said all I could do was go to churches," she said. "Which is worse, filing for bankruptcy or - I'm going to say it - begging at churches?"

Now, Uncertainty

Since the couple filed for bankruptcy protection in March, the creditors have stopped calling for money. The Dorsetts filed for, and were granted, protection under Chapter 7, which means that a trustee will liquidate their nonexempt assets to pay their creditors. But as in most Chapter 7 cases, there are no assets to liquidate.

In the meantime, since they are resigned to losing their house, they are putting aside the money that would have gone to the mortgage for the next round of big expenses. For the first time since Zachery's birth they are saving money.

Even now, credit card companies still offer them cards, which they have turned down. But because of the bankruptcy, they know they will not be able to secure a mortgage on their next home. Many of their friends, and especially the mothers in Mrs. Dorsett's preschool group, do not know about the bankruptcy.

Even with their debts cleared for the moment, there are no guarantees that the Dorsetts will be able to stay above water. The immune globulin may keep Zachery out of the emergency room this winter, but it may not. They have no credit to buffer unforeseen expenses - a sudden car repair, a slowdown at work, braces.

Mrs. Dorsett tried to put the best spin on the contingencies that loom over their lives: "If we get another house for under $800 a month, if nothing else happens, if the treatments work, we'll make it."

And if things do not work out, they will face that another day, and for many days after that.

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