Kathleen Watson of Lake City, Fla., has been on a mission to find affordable individual health care since her husband's work-based insurance plan ran out.
But during her search, Watson discovered she lives with a medical condition that has considerably hampered her efforts to find coverage. With precursor symptoms to leukemia, Watson said she was been red-flagged by insurers for not initially informing them about her condition. Now she cannot find a health insurance company to cover her that she can afford. And with a pre-existing condition, most plans won't even take her.
"I'm very frustrated," Watson said. "We've lost our savings, our 401k, I've lost my business."
"Most people who do have leukemia lymphoma get treatment right away," she said. "I haven't gotten any treatment because I don't have insurance."
A study released today by health care consumer group, Families USA, reveal that Watson is not the only one. In a 50-state survey, Families USA found that states do not have adequate laws to protect individual health care consumers — people who are self-employed or ineligible for group health insurance coverage. According to Families USA, about 27 million people nationwide had individual policies in 2006. This is the first nationwide survey that examines how states oversee individual health coverage.
The Families USA study comes on the heels of a report released earlier this week by the Commonwealth Fund that found that the number of people who are "underinsured," or without adequate health insurance to cover their medical expenses, rose dramatically in recent years from 16 million people in 2003 to 25 million in 2007. The Commonwealth Fund report found that 42 percent of adults between the ages of 19 and 64 either don't have enough health insurance or don't have any at all.
Watson's home state of Florida is on the list released today by Families USA of states that do not do well when it comes to ensuring consumer protections. Others at the bottom of the list include Alabama, Delaware and Nebraska. States like New York and Maine, on the other hand, do a better job of ensuring consumer protections when it comes to individual health insurance, according to Families USA.
"When people try to buy coverage in the individual market, they don't have the same bargaining power that a group does," said Ron Pollack, executive director of Families USA. "That's why there are far more abuses in the individual insurance markets."
Pollack said many states do not have effective laws on the books that support the consumer in those cases. Whether denying coverage for preexisting conditions, charging sky-high premiums, or digging into family history and concluding that an applicant forgot to disclose information, Pollack said it's difficult for individuals to get health insurance they need.
"In many states, many of these practices are not illegal, which allows insurance companies to continue this abuse of practices," Pollack said.
According to the survey, 35 states do not have laws restricting how much insurance companies can raise premiums if health risks are found. In 21 states, insurers are legally able to exclude coverage for pre-existing conditions for up to one year.
But others this morning took issue with the survey, saying that consumers are protected in the individual health care market.
"It's important that consumers understand that there are consumer safe guards in place. Individual health care coverage is affordable, accessible and it's working for millions of Americans," said Robert Zirkelbach, a spokesman for the industry lobby group AHIP, America's Health Insurance Plans. "But we recognize that some individuals are falling through the cracks."
Zirkelbach said the industry is pushing for more reforms, such as third party review of claims and guaranteed coverage, but warns of adding too much regulation.
"It's important to consider the unintended consequences," he said. According to AHIP, strict regulations would drive health care costs up and force many out of coverage.
Heading into the presidential election, both Sens. John McCain and Barack Obama have pledged to fix the health care system. Obama's plan sets out to provide more group coverage to consumers, similar to the health package that members of Congress are offered. McCain's plan would offer more individual coverage, shifting away from employer-based health care.
Pollack said the survey shows that states don't have strong enough regulations to support McCain's plan.
"They'll be worse off than they are today," he said. "Some states do have decent regulations, but whatever exists would be weaker under a de-regulated, private insurance system that is the vision for the future by Senator McCain."
Pollack said the government should take action to better protect people looking for individual coverage.
"The most important thing that needs to happen is, there really needs to be a federal set of rules so no one has to worry about certain basic rights." Pollack said.
According to many in the health care industry, those are rules that would increase costs and force many Americans to abandon much needed coverage.
ABC News' Kate Barrett contributed to this report.