For Sergio Branco, a 33-year-old New Jersey resident who was recently diagnosed with leukemia, 26 cents was nearly the difference between living and dying.
As the Star-Ledger reports, Branco was denied health coverage because his wife accidentally paid his $518.26 insurance premium with a check that was 26 cents short. His family assumed they had paid the bill correctly and had no idea he was going uninsured. They didn’t find out until just two months before Branco was scheduled to undergo a bone marrow transplant to prolong his life — a procedure that would put the cost for his total medical expenses at more than half a million dollars.
How did Branco slip through the cracks of the health insurance industry? Essentially, it’s because the U.S. relies on a employer-sponsored health insurance model. That means most people access health coverage through work — and when they lose or switch jobs, that coverage is thrown into jeopardy. Branco was one of those people. After he was diagnosed with leukemia, he took three months of leave under the Family and Medical Leave Act (FMLA) to begin treatment, and ended up being fired from his job as soon as that period of leave ended.
When employees are let go, they have the option of continuing their old employer-sponsored health insurance through the Consolidated Omnibus Reconciliation Act (COBRA). Employers pick up a big part of the tab for their workers’ health insurance premiums (that’s why it’s “employer-sponsored”). Under COBRA, however, terminated employees must cover the entire cost of their health insurance premium themselves — which means that health care becomes a significantly bigger expense for people after they lose their job. Workers receive written notification that they are eligible for COBRA coverage, and have 60 days after that point to decide whether they want to accept it.
Branco’s family knew he needed health care while he was battling cancer, so they opted to pay for COBRA coverage after they received a notice about it on May 1. Paychex, the third-party benefits administrator that handles COBRA paperwork for Branco’s former company, told them it would cost $518.26 each month. Around the end of May, Branco’s wife Mara mailed a check to Paychex — but she made it out for $518, accidentally leaving off the 26 cents.
Paychex cashed the check, and Branco’s family assumed everything was going as planned. Branco continued to receive chemotherapy and prepared for his upcoming bone marrow transplant, scheduled for the middle of August.
But in June, the hospital told Branco he didn’t have health insurance. Confused, his wife called Paychex — and learned about the 26 cent shortfall for the first time. Mara Branco assumed she would simply be able to pay the 26 cents and straighten out the issue, but it turned out to be a little more complicated than that. Paychex said it couldn’t accept any more payments from the Branco family because they had failed to pay their first bill. Branco’s former employer claimed their hands were tied. Branco’s wife called the Department of Labor several times to no avail.
Eventually, Branco’s doctor stepped in. He wrote a statement to the companies explaining that Branco “will most certainly die in the very near future if he does not proceed to transplant; therefore I am writing to request that every effort be made to reinstate his health care insurance coverage.” That didn’t work, either.
“They’re playing with my husband’s life,” Mara Branco told the Star-Ledger. She just wanted to pay the missing 26 cents. The Brancos ended up hiring an attorney.
Finally, the Branco family received some good news on Friday — the federal government will fix the mistake and restore Sergio Branco’s coverage. His transplant will proceed as planned later this month. “The Department of Labor said the company will reinstate him from May till now,” Mara Branco explained. “They said the company did it wrong. I am super happy. It’s like a weight has lifted off my shoulder. It’s better than winning the lottery.”
Fortunately, Branco’s 26-cent nightmare is anomaly. But the headaches that can ensue from the United States’ current employer-based health model are not. When Americans are asked about their top concerns related to health insurance, they consistently say that they’re most worried about losing their coverage. Many Americans remain in jobs longer than they would have otherwise liked to because they’re afraid of losing their health care — and American seniors are increasingly putting off retirement for that reason, too. Those fears are understandable. For the people who lose their jobs, COBRA is often cold comfort. Thanks to spiraling health costs, paying for high COBRA premiums eats up most of Americans’ unemployment benefits.