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Health Care: Critical Condition

Aired April 26, 2008 - 20:00   ET


DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Health care is on the minds of a lot of people this election. There are nearly 50 million people without any health care insurance and millions more who do have coverage, but it's simply not enough. Our health care system is in critical condition. We're going to see how we might fix it and how bad it'll get if we don't.



GUPTA (voice-over): Dawn Zeigler puts on a brave face for her daughter. But the truth is, she and her husband William have gone through a terrible time. It began in 2004. Until then, they were living the quintessential American dream as real estate brokers in Las Vegas. Plenty of money, nice houses, fancy cars. Then, just like that, life changed. Dawn got pregnant.

D. ZEIGLER: I was excited. I was excited when we found out it was twins, and then I was nervous.

GUPTA: Twin girls. But Brooke and Alexa arrived early, too early, just 28 weeks. Little baby Brooke was in serious trouble.

D. ZEIGLER: When she came out, she was blue.

W. ZEIGLER: They had to resuscitate her. We didn't know that we'd have to have surgery within 10 hours.

GUPTA: And then another surgery and then another. Over the next 18 months, she had nine operations, including two open heart surgeries. To get the best care possible, she was air-lifted to hospitals in California, and then Indiana. The Zeiglers never thought about the cost. They had insurance, excellent health insurance. Did you worry about it at all?

D. ZEIGLER: Not at all.

GUPTA: So would it surprise to you know that this well-to-do couple is now broke and filing for bankruptcy? Insurance paid for a while, but there was a lifetime limit of $2 million for Brooke's expenses. It may sound like a lot, but it was nowhere near enough.

W. ZEIGLER: The insurance company paid the hospital, but it's still only a percentage, and it just doesn't last, especially when some days it was $30,000 and $40,000 a day to keep her in the ICU. The operations were $100,000 days.

GUPTA: Brooke's multiple air ambulance rides alone cost more than $250,000. And that had to be paid up front. No money, no aircraft.

D. ZEIGLER: They said, "We have a plane for you. We can get you -- you can leave in two hours, but you need to pay us first, and it's $30,000." So I called Citibank, I called Discover and called MBNA and they wrote checks, and we were on our way.

GUPTA: But the bills got bigger and the Zeiglers had to reach deep into their own pockets.

W. ZEIGLER: We ended up losing all of the houses, everything we worked for and put all of the money down on and we refinanced and took everything out and we had to live off of credit cards at times. In the end, it end up costing us everything. We're lucky to still have our house and our cars, but that's about it.

GUPTA: Things were about to get much worse. After seven months in intensive care at Riley Hospital for Children in Indianapolis, Brooke's heart finally gave out.

W. ZEIGLER: They worked on her for 35 minutes and I had to tell them to stop, because she had been almost eight minutes without oxygen. How do you tell a doctor to stop working on your kid? I was telling the doctor to stop working on her.

GUPTA: Brooke Zeigler was just 18-months-old when she died. A year later, a bill arrived in the form of a legal judgment. You owe Riley Hospital $700,000?

ZEIGLER: $708,000 they just sued us for and won for unpaid medical expenses.

GUPTA: Consider this -- in 2006, almost 1 million people filed for bankruptcy. Almost half, according to a Harvard study, were sunk in large part by medical expenses and the sad fact is, most of those people did have health insurance.

W. ZEIGLER: I think that if we were in Europe or in Canada, we would have gotten as good as care or better care than we got here. We wouldn't be financially bankrupt.

GUPTA: Is that an indictment of our health care in this country?

W. ZEIGLER: I think it's American society, everything's about money. That's what it comes down to.

GUPTA: Is that the way it should be done? Should health care be that way in this country, should it be more of a right?

D. ZEIGLER: When you're going through it day-to-day, it didn't matter the cost or if we lost everything, it didn't matter. The whole focus was on her and saving her.

GUPTA: Just two months after saying good-bye to Brooke, the Zeiglers welcomed a son, Cash, into the family.

UNIDENTIFIED MALE: Mama, come here.

GUPTA: Now they're moving to a rental house and getting ready to start over. Would you have done anything differently?

D. ZEIGLER: Absolutely not.

W. ZEIGLER: I would have basically closed down my business and if I would have closed down my business, then I would have actually been able to have been covered by the state, where I would have actually been able to get better care paid for by the state if I didn't have a job.

GUPTA: It boggles the mind. He would have had more help if he just went on welfare.


GUPTA: Terri King lives a stone's throw away and she knows where the Zeiglers are coming from. You see, she's been through a similar nightmare herself. Her son, Matthew, was born with a heart defect that stretched the family's health insurance to the limit.

KING: I would have never thought in a million years that, in this country, that families that do all the right things can be completely ruined.

GUPTA: Matthew, now two and a half, will need special care for the rest of his life.

KING: There needs to be something available for the middle class people because health care is so unaffordable. There needs to be something for those of us that fall through those cracks, because we fell through every single crack.

GUPTA: When King and her husband, Michael, sought help to cover Matthew's care, the advice they got was shocking.

KING: That we should get a divorce, that I should turn over all my joint assets to Mike, get a divorce, so that I could be a poor single mother, and then I could be on Medicaid along with Matthew and then Matthew would get full medical coverage on Medicaid.

GUPTA: The Kings say another counselor suggested they give up Matthew for adoption to a relative who could then collect full benefits for him through Medicaid. Eventually they convinced the Las Vegas Police Department where Michael is a detective, to increase their insurance coverage.

Last spring, they asked the Nevada State Legislature to help others in the same boat, a bill to let these families buy Medicaid coverage was introduced but then voted down, leaving Terri furious.

KING: I would like to know how they would feel if they were told to divorce their wife or to give up their child for adoption. I just think that if they were in our shoes, they would be doing something about it. Right now they don't have to worry about it, so it's easy to sit back, pass it back and forth and just do nothing.


GUPTA: Horror stories like these are pushing health care center stage in the run for the white house.

OBAMA: I will sign a universal health care plan into law.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: He said it was universal. He said it was sort of universal. He said it wasn't universal.

SEN. JOHN MCCAIN (R-ARIZ), PRESIDENTIAL CANDIDATE: Top in the domestic challenges for the 2008 campaign.

GUPTA: Today, nearly 50 million, more than 15 percent of all Americans, have no health insurance. And in a recent CNN poll, more than 60 percent say the system is so bad, it needs a major overhaul.

GEORGE W. BUSH, PRESIDENTIAL CANDIDATE: People have access to health care in America. After all, just go to an emergency room.

GUPTA: But are emergency rooms really the answer? Is that what we want health care to look like? Once the envy of the world, our health care system stands at a crossroads. We're taking a closer look at the problem and how this election might shape a solution.




GUPTA: If you have any doubt about the extent of our health care woes, here is a good place to start. This two-story office building in Newport News, Virginia. When I first came to the Patient Advocate Foundation, truth is, I didn't quite know what to expect. Take a look around here. All of these people answering phone calls and answering e-mails, two floors here, and six more centers around the country. And can you guess how many times people reach out to this particular organization for help? 6.5 million times last year alone.

What does that say about our health care system? Nancy Davenport-Ennis is CEO. She started this nonprofit foundation in 1996, after surviving cancer.

NANCY DAVENPORT-ENNIS, PATIENT ADVOCATE FOUNDATION: My diagnosis was probably the best thing that ever happened in my life, because until that diagnosis, I was so focused on my own family, my own community, my own career, that I really was not sensitized to what happens to you if you're diagnosed with a life-threatening illness. GUPTA: It began as a one-woman operation and today, these phone lines are literally jammed by the number of calls, more than 6 million people a year, begging this private outfit to do what insurance companies or hospitals or politicians have been unable to do, get them health care. What does that say about our health care system?

DAVENPORT-ENNIS: It says two things to us. No. 1, if we were not here to field the calls, what would happen to those Americans? We believe that a large number of those Americans would die much sooner than they do. It also says that the problem is not improving itself within the current system that we have.

GUPTA: But whose fault is that? The show is called BROKEN GOVERNMENT. But is government really part of the problem? That's what conservative activist Grover Norquist says.

GROVER NORQUIST, AMERICANS FOR TAX REFORM: Health care is half controlled by the government. That's why it has problems.

GUPTA: Or is it the solution?

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: The government has really been a bystander, hasn't it?

GUPTA: It's easy to say the government deserves some of the blame. We'll get into that in just a bit, but who are the other suspects behind our broken health care system? Doctors, the pharmaceutical industry, insurance companies? How about you and me?

And if our system is broken, what would a different system look like anyway? This new baby came into the world with a frightening lung infection. A week in intensive care, and little Domino is cured. So what's the bill for this week-long hospital visit?


GUPTA: Translation? Nothing at all. That's because we're in France, where taxes pay for the government-run health care system, even for the sick. From the crucible of World War II, France, Britain, Canada, not to mention Germany, emerged with government-run health systems. President Truman wanted the same thing here.

HARRY TRUMAN, FORMER PRESIDENT OF THE UNITED STATES: Let us adopt legislation to provide our citizens with the homes they need, the opportunity for universal good health.

GUPTA: But the American Medical Association fought back. The battle cry? No socialized medicine. Truman's plan was defeated.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: This threat is with us, and at the moment, is more eminent.

GUPTA: When Medicare was proposed in the 1960s, Ronald Reagan was a spokesman for the AMA, urging listeners to stop it.

REAGAN: And if you don't do this and if I don't do it, one of these days, you and I are going to spend our sunset years telling our children and our children's children what it once was like in America, when men were free.

GUPTA: Now that those children's children are grown up, people are asking again, should the government do more? Every session of Congress, since he got there 53 years ago, Democrat John Dingell has introduced a bill to replace our current system with a national health insurance program. Before that, his father, also a congressman, did the same thing, all the way back to 1943.

REP. JOHN DINGELL (D), MICHIGAN: This was the only country in the world that doesn't have major program of national health insurance for our people. Every other industrialized nation in the world and every other advanced nation in the world has one.

GUPTA: But even if you agree the government should do more, it isn't the only problem. Let's go back to the usual suspects. Let's start with individual responsibility. Millions of Americans live unhealthy lifestyles. We don't eat well, don't exercise, don't get routine checkups and screenings, even when they're covered. All of that leads to chronic conditions like diabetes and heart disease, that strain the current health care system.

But does anyone have a vested interest in keeping our current $2 trillion system just the way it is? Drug companies are doing well. The top 10 pharmaceutical companies worldwide reported combined annual profits of more than $70 billion in 2006, and that bottom line gets help from federal law.

Americans are not allowed to import the same drugs from other countries where they're cheaper, and thanks to the 2003 Medicare bill, the federal government cannot negotiate for lower drug prices.

The industry trade group says the import law is need to protect against counterfeits and that high drug prices are the cost we pay for research on new medicines where America leads the world.

And how about doctors? Remember the American Medical Association pushed that whole Ronald Reagan campaign, but it's amazing how times have changed.

UNIDENTIFIED MALE: One out of seven of us is uninsured.

GUPTA: Now the AMA is running these ads called the voice for the uninsured.

UNIDENTIFIED MALE: But with this issue in mind, visit

GUPTA: Dr. Nancy Nielsen, president-elect of the AMA, says the organization would like to see everyone insured through a public/private partnership, rather than a government-run single payer system.

NANCY NIELSEN, PRESIDENT-ELECT, AMA: We do not believe that the American public wants a single payer system. What we know that they want, however, is health coverage for all. But the way to get there, in our view, is not a single payer system.

GUPTA: And then you have insurance companies.

UNIDENTIFIED MALE: I don't get it. Congress isn't passing the health care reform America wants.

GUPTA: Remember those 1993 Harry and Louise ads? That was the campaign sponsored by the insurance industry to sink Bill and Hillary Clinton's universal health care plan.

UNIDENTIFIED FEMALE: The problem is, they don't get it.

GUPTA: But today, the world is a very different place. So much so that the health insurance trade group is now lobbying for universal health care.

KAREN IGNAGNI, AMERICA'S HEALTH INSURANCE PLANS: What's important about our plan is that we would get everyone in, and that has to be the fundamental goal of health reform proposal.

GUPTA: Sheila Krumholz is executive director of the Center for Responsive Politics in Washington, which tracks campaign contributions and lobbying.

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: The health insurance industry, the AMA associations representing the industry, have jumped on board with universal health care, but not without a fight. They're looking at the writing on the wall. There is such disgust with the current situation, this is something that they're being essentially forced to do.

GUPTA: Even though, Krumholz warns that change will not be easy. Keep in mind, these well-funded interests have much at stake. Since 1988, according to the Center for Responsive Politics, the health care sector has spent $2.6 billion on lobbying, with the pharmaceutical industry alone spending almost half of that. And that buys a lot of influence.

KRUMHOLZ: Politicians talk a big game when it comes to health care, and when they're on the stump, they're promising all kinds of things. But once they're in Washington it seems difficult for politicians to resist the influence of the health care industry.

GUPTA: Karen Ignagni with the Health Insurance Trade Group says insurance rates are determined largely by medical costs, and everyone, including the insured, are going to have to pay for it. But she agrees, Washington needs to step in.

IGNAGNI: Whether we have the will to do it is a question. It's not about insurance premiums. It's about underlying health care costs and not one candidate, Democratic or Republican, or one member of Congress or one governor has, thus far, stood at the head of the line and said, "I'm going to campaign for this being a priority."

GUPTA: Coming up --

UNIDENTIFIED MALE: I'm just crawling for the ropes to reach Medicare.

GUPTA: One man's battle with the United States health care system. That's next.




GUPTA: Jim Matthews is an optometrist who was making over $100,000 a year. Then he got sick. It forced him to sell his practice.

JIM MATTHEWS, OPTOMETRIST: You know, it's a chronic condition and I had open heart surgery, which cured it.

GUPTA: Or so he thought. Soon doctors found an aneurysm in a major artery, and he lives, knowing he may need major surgery at any time.

MATTHEWS: You like to try some contacts?

GUPTA: At age 55, no job means no health insurance.

MATTHEWS: Let's start out with the refraction.

GUPTA: And for Jim Matthews, that's just not an option. This optometrist can see the writing on the wall.

MATTHEWS: If you have health problems, you're not poor enough for Medicaid, you're not old enough for Medicare and you don't have a health insurance through your work, you're really out of luck, unless you have wealth.

GUPTA: And the sad fact is that in America today, even with coverage, many of us are just one illness away from disaster. Today, more than 158 million Americans rely on their jobs for health coverage, but that safety net is getting smaller. In just the past eight years, thousands of companies have stopped offering insurance. Those who still do are asking workers to pay more, a whopping 55 percent more.

REGINA HERZLINGER, AUTHOR: It's kind of crazy that we get insurance for our employers. After all, we wouldn't want them to buy our cars or our houses, our clothes, but we trust them to buy something that is so important to us, which is our health insurance.

GUPTA: Harvard professor Regina Herzlinger says the system is a disaster for employers, too.

HERZLINGER: It's a terrible problem for globally-competitive kind of businesses.

GUPTA: Companies like General Motors are spending billions on health insurance, costs that competitors in Europe or Japan don't have.

HERZLINGER: General Motors has to engineer $900 of costs out of the car to be competitive with Toyota. Can they do that? Not a chance in the world.

GUPTA: The American system of health care is an accident of history. During World War II, the government froze wages to head off inflation, but allowed companies to get tax breaks by providing benefits, like health insurance. Today if you try and get insurance on your own, it's incredibly expensive. More than $12,000 a year on average for a family of four. But what would happen if employers were out of the picture?

HERZLINGER: If they said to their employees, instead, "Look, I'm going to give you some money, go out and buy health insurance."

GUPTA: Here's the idea. If your company weren't buying insurance, it could pay you a higher salary and you could afford your own coverage. That's what Senator Tom Coburn wants to encourage. The only practicing physician in the Senate has introduced a bill to give individuals the same tax break as big companies.

SEN. TOM COBURN (R), OKLAHOMA: So what we're going to be doing is incentivizing everybody to be in the market.

GUPTA: He says if people shop for their own insurance, competition would drive down prices.

COBURN: We will create a true national market on health insurance, just like you have on auto insurance, where you can actually buy what's best for you.

GUPTA: But that's a big gamble, especially for anyone who has what's called a pre-existing condition, like cancer or heart disease or diabetes or asthma. These people have a terrible time finding insurance, people like Jim Matthews.

MATTHEWS: I've been through the perfect storm. I've hit the 55- year-old mark, I'm self-employed, I have health issues.

GUPTA: When he went looking for individual health coverage after his heart surgery, it wasn't just expensive, it was nonexistent.

MATTHEWS: They basically laughed at me and they said you know, you don't have a hope with open heart surgery of having any broker write you a policy in the state of South Carolina. You are uninsurable.

GUPTA: There was just one option left, keep working. Today Matthews leases space at a Wal-Mart. It's just a small office, but it makes him eligible for a small business policy. Even for that, he has to pay through the nose.

MATTHEWS: A little under $18,000 this year for a policy. If you add up copays and coinsurance and deductibles and medicine, it will be about $23,000 this year just for health care. GUPTA: To help people like Matthews, 34 states, including South Carolina, have started what are known as high-risk pools. They're supposed to cover people who would otherwise be uninsurable due to preexisting conditions.

In practice, Consumer Advocate Nancy Davenport-Ennis says it doesn't work. Of all those uninsured millions, fewer than 200,000 are covered by a government-funded risk pool.

MATTHEWS: I did pursue that. It's incredibly expensive, a lot more expensive than what I'm paying now.

GUPTA: And what if Jim Matthews ever gets sick again or needs that surgery?

MATTHEWS: I would be in big trouble. If my health condition changes, I'm just one step away of not being able to afford it. Suppose I can't work anymore, I will be one of the 47 million uninsured.

GUPTA: So retirement is out of the question.

MATTHEWS: I have no hope of retiring until I'm 65. I'm just crawling for the ropes to reach Medicare.

GUPTA: In the meantime, he and his wife will keep their fingers crossed and pay the premiums each month for as long as they can afford it.

When we come back, this man may die of cancer because he doesn't have health insurance. His story, when we return.



UNIDENTIFIED MALE: If you just want to make your plate you can start right here.

UNIDENTIFIED MALE: We need one more chair, don't we? Oh, right here.

MARK WINDSOR, CANCER SURVIVOR (voice-over): I did not expect here this Thanksgiving.

GUPTA: When Mark Windsor was just 27 years old, doctors removed a large cancerous tumor from his neck. The surgery was a success and Windsor thought he was cured. A few years later, he left a good job with company paid health insurance to become a photographer.

WINDSOR: You can just shoot all day, you know? Taking pictures makes me a happy man.

GUPTA: A happy, uninsured man.

WINDSOR: I had gone a few years without recurrence. I just felt confident I couldn't let that dictate my life.

GUPTA: But looking back after 25 years, cancer has dictated everything in Windsor's life. After more than a decade in remission, the cancer returned. With no insurance, and little money, he was about to face an extraordinary dilemma. But in the beginning, Windsor got by with plain old good luck. He found a hospital and charitable surgeons who agreed to remove the tumors at no charge. Again and again. Eight times over the next 16 years.

WINDSOR: You knew that you weren't going to get anything extra, you were just going to get this tumor out of your body.

GUPTA: One solution, radiation treatment. It probably would have cured him. But here is where things got tricky. Windsor couldn't get it because he couldn't afford it.

WINDSOR: If I had probably gotten some good treatment several years ago, I probably would have been cured. This was taken July, by the way.

GUPTA: Think about that. If he had treatment years ago, Windsor may have been cured today. He wouldn't have to hold his neck up like this. He wouldn't have had the operations. And he wouldn't have what is now almost certainly an abbreviated life.

The American Cancer Society says as things stand now, patients without private insurance are 60 percent more likely to die within five years of their diagnosis.

By the fall of 2006, the cancer was back. And the surgeon who donated his services was gone. If Windsor were poor, he could have found insurance through Medicaid. But his $30,000 income was too much to qualify.

And so seven months after his cancer returned with tumors creeping into his neck, Mark Windsor made a desperate decision. This past spring, he and Val Chamberone (ph), a good friend, got married. And Chamberone put him on her health insurance.

GUPTA: People get married obviously because they fall in love.

WINDSOR: I don't think I want to answer that.

GUPTA: Can I ask you, did you get married because of health care insurance?

WINDSOR: Well, uh, some, yes.

GUPTA: Is that where we've arrived at?

WINDSOR: That's where we've arrived.

GUPTA: You had to get married to get health care insurance?

WINDSOR: I didn't have to. I could have just -- the tumor was getting so bad, I would have been dead by now. REP. JOHN DINGELL, (D) MI: We have the finest health care system in the world. But we've got the worst system of paying for it.

GUPTA: For years, Congressman John Dingell has pushed a bill to create a national health insurance program run by the government. He says the current system is not just immoral, it's a massive waste of money.

DINGELL: What happens is some 47 million Americans without health care simply go to the energy rooms and everybody else winds up paying for the cost because that shows up in the bills of everybody else.

GUPTA: And while it's a long shot, 87 other members of Congress are pushing another bill to expand Medicare to cover all Americans. National health insurance would make us more like Canada, or Great Britain, or France. Places where no one gets married just for health insurance. You don't have to pay hundreds of thousands of dollars to get treated for cancer.

The World Health Organization says France has the best health care system in the world. Based on admittedly subjective measures of quality, cost, and fairness. Everyone in France has government health insurance. Most people buy extra coverage. But we found out the cost is nothing like here. A French family on average pays just $146 a month for the insurance. And if that's too much, it's not a problem.

FREDERIC VAN ROEKEGHEM, FRENCH NATIONAL HEALTH INSURANCE FUND: Everybody is covered. If your income is lower, then you pay less. And if you have no income, you are still insured.

GUPTA: Patients with serious chronic disease like cancer pay nothing at all. It is certainly worth noting that the French health care system is paid for by high taxes. And high taxes don't sit well with most Americans. Also consider this -- men in the United States are actually less likely to die of cancer than men of France, or in Canada, or Great Britain.

SEN. TOM COBURN, (R) OK: And we shouldn't kid ourselves about the choices we're going to make. In England, if you're diagnosed with breast cancer today, the average wait before you start chemotherapy is eight and a half months. In this country, it's two weeks. Why do we have a different outcome?

GUPTA: Maybe because the care in the United States is better. At least for those who can afford it. Let's compare the United States and Canada. Need an MRI? The U.S. has nearly five times as many machines per person. Surgery, 14 percent of Canadians have to wait six months or more for elective surgery. Only four percent of Americans wait that long.

GROVER NORQUIST, AMERICANS FOR TAX RETURN: We've seen in other countries, the big government solutions don't work. People leave Canada and come to the United States to get health care that they don't want to sit around and wait months or years to get. We have seen the future. It's Canada. It's waiting in line. It's not getting health care. It's rationing.

GUPTA: Canada spends just under 10 percent of GDP on health care. We spend more than 15 percent. Maybe Canada isn't spending enough to make its system work. The problem is, we in the United States don't always get bang for the buck. Americans see doctors much less often than people in Canada, France or Great Britain. We're less likely to get a flu shot, and we pay much more for prescription drugs. Everything here costs so much, critics say, we're basically rationing health care by leaving out millions who just can't pay.

SEN. EDWARD KENNEDY, (D) MA: The fact that a family today, when they have illness and have sickness in their family are not guarantied that they're going to be able to get a doctor's attention or be able to afford what a doctor is going to pay is just absolutely wrong. It's morally wrong.

GUPTA: Here's an especially grim bottom line. The number of preventable deaths is an absolute disgrace. One hundred and one thousand Americans each year, even though we have the know-how and the technology to save them. After getting married, Mark Windsor was able to get insurance. And get care. But tumors don't pay attention to weddings. Mark Windsor knows he will likely die because of them.

WINDSOR: I don't think it's right that anybody shouldn't have at least the opportunity to have insurance. And if not, that's where our government, you know, who protects us against crime and wars, should step in and protect us against this mean old tumor, if that's what it takes.

GUPTA: Coming up, Massachusetts, where the government says everyone must have health insurance or else.


GUPTA: Fifteen years ago, the country was abuzz about the Clinton health plan. That plan suffered a crushing defeat in 1994, forcing the health care debate out of the spotlight. I saw that first hand in 1997 and 1998 when I worked as a non-partisan White House fellow in Hillary Clinton's office.

Today, there is one place in this country that does have health care for all. At least in theory. Massachusetts. So how is it working? In 2006, Massachusetts passed a bill for universal health care. After a remarkable deal between a Democrat, Senator Ted Kennedy, and then Republican Governor Mitt Romney.

KENNEDY: Massachusetts, for example, said we're going to take leadership. And there's probably a dozen other states that are attempting to do what Massachusetts has done.

GUPTA: Here's how it works. Companies with more than 20,000 employees are required to offer them health insurance. And here's the bold and controversial part. If you don't have insurance through a job, the law says you have to buy it on your own, or pay a penalty. Two hundred nineteen dollars this year. More than $1,000 the next. UNIDENTIFIED MALE: Whether it's a broken bone appendicitis or cancer, you can't afford to pay a huge bill. You need health insurance.

GUPTA: In 2006, about 500,000 people in Massachusetts were uninsured. But not anymore. Since the law passed, almost 300,000 of them are now covered. Many enrolled during a last-minute media blitz of sign up events, mailings, and commercials.

UNIDENTIFIED MALE: Get health insurance now, through the state's health connector.

UNIDENTIFIED FEMALE: You were having trouble with your asthma?

GUPTA: At this clinic, run by the Cambridge Health Alliance, patients had good things to say. Even some who found they are now paying for care that used to be free. UNIDENTIFIED FEMALE: It's like we're all in this together. I shouldn't get it for free if I can pay $5 and help somebody else.

JONATHAN GRUBER, MIT ECONOMIST: I think Massachusetts was really the shot heard around the world once again.

GUPTA: Economist Jonathan Gruber helped design the plan.

GRUBER: This is not socialized medicine. It's basically using the private sector to solve the problem of the uninsured.

GUPTA: To be fair, the state does pitch in, picking up the tab for the poor and offering subsidies to those who earn less than $31,000 a year. But is it enough?

UNIDENTIFIED MALE: No health insurance comes with this job.

GUPTA: Smoke Bolja (ph) and his music producer Miles Wheeler make too much to get a subsidy from the state.


GUPTA: They're making money but still struggling to make a living as artists. And this some say is an example of where the Massachusetts model hits a roadblock.

UNIDENTIFIED MALE: Gas, inflation, recession, people can't even pay their mortgage. What makes you think we're going to have, five, six, 700 a month extra to give to the government?


GUPTA: Dr. Steffie Woolhandler lobbies for government-run health care. Like in Canada or France. She says the requirement for individuals to buy insurance is a bust. That just seven percent of those people who don't get a subsidy have signed up.

Now the state insists the numbers are better. But there's no dispute, most of that middle income group, even faced with the new law, still have not bought insurance.

WOOLHANDLER: And if you look at the cost, you'll understand why. They simply can't afford it.

UNIDENTIFIED MALE: I try so hard to be a law abiding citizen and now it's against the law to not have health insurance? I didn't understand that.

UNIDENTIFIED MALE: It makes you feel like you're breaking the law when you don't pay for health insurance.

WOOLHANDLER: Like yeah, what are they going to send the FBI to come get me? The CIA?

JOHN KINGSDALE, COMMONWEALTH HEALTH CONNECTOR: It's a long process and politically very challenging.

GUPTA: John Kingsdale runs the Massachusetts health care program.

KINGSDALE: If that individual were to fall off the curb and get hit by a bus, he or she would expect to be picked up by an ambulance, transported to an emergency room, given the best in patient care, for tens and tens of thousands of dollars. And what we're saying is if you expect that to happen, and we as a society won't let you just lie there and die, we're going to take care of you, then you need to contribute to the financing of this health care system too.

GUPTA: Smoke and Miles don't know what they'll do next year, when the fine goes up to more than $1,000.

UNIDENTIFIED MALE: That means that I'm going to be even more broke than I already am. That means that I'm going to have more bills and that's going to be less food for my son, that's going to be, you know, less things that I'm used to having because I am forced to pay health insurance.

GUPTA: Faced with complaints, the state is now granting thousands of waivers to people who can prove they can't afford insurance. People simply too expensive to insure.

Next, health care and the election. We'll be right back.



GUPTA: So what are the candidates in both parties saying about America's health care crisis? For the Democratic front-runners, the buzz word is ...

CLINTON: Universal health care.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: Universal health care. GUPTA: Universal. Hillary Clinton and Barack Obama would require coverage for children, expand Medicaid for the poor, and they'd require most companies to offer insurance to their workers. Here's the big difference, though. Under Clinton's plan, everyone else would be required to buy their own. That last part, Obama says, is unfair. Insurance, he says, is just too expensive.

OBAMA: And the reason people don't have health care is not because they're running away to avoid getting health care, it's because they can't afford it. If people can't afford it, it doesn't matter what the mandate is, they're not going to buy it.

GUPTA: But who can afford insurance really? According to the U.S. Census, more than 9 million of the uninsured are in families earning more than $75,000 a year. To many people, that seems like enough to buy some coverage, but there is one key thing on which Clinton and Obama both agree. They don't want a health care system like Europe or Canada that's run by the government.

CLINTON: I just don't think that most Americans would be willing to have such an abrupt departure, and I understand that.

GUPTA: Maybe the candidates understand that according to the World Health Organization, the United States ranks first in patient satisfaction.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Divided we do fail and we have to fix health care in America, and it's got to be the great debate.

GUPTA: Now, what about John McCain? He says the Democrats' plans are too expensive and would lead to more red tape.

MCCAIN: They offer their usual default position. If the government would only pay for insurance, everything would be fine.

GUPTA: McCain would use a different approach. Tax breaks to help people buy their own insurance, around $5,000 for a family, $2,500 for an individual. And he would expand health savings accounts. Those are tax-free dollars you can put aside to pay for medical expenses.

WINDSOR: Actually, right here in the same area ...

GUPTA: The challenge, of course, what to do with people who still aren't covered. McCain hasn't said. McCain also has his sights set on saving Medicare. He says wealthier Americans should pay more for their prescription drugs.

MCCAIN: People like Bill Gates, Warren Buffett, don't need their precipitations underwritten by taxpayers. This reform alone will save billions of dollars.

GUPTA: There are a lot of different opinions on how to get out of this health care mess. But what about people whose lives have been so profoundly affected? Like William and Dawn Ziegler, who spent their life savings trying to safe their infant daughter.

D. ZIEGLER: I just think it's truly the parents' responsibility to make sure, you know, that she's covered and that we're covered and I think that we all saw from Katrina and other events like that that you can't rely on the government. You have to be able to make your own way.

GUPTA: When a patient is in critical condition, that patient can be revived and nurtured back to good health. The same thing can be said about our health care system. It can be healed, and you can deliver the prescription on Election Day. I'm Dr. Sanjay Gupta. Thanks for watching.