As if we needed more evidence that the US healthcare system is fundamentally broken, consider the story of Starla Darling, a pregnant 27-year-old mother who was laid off when Archway & Mother's Cookie Company in Ashland, Ohio filed for Chapter 11. With her job went her health insurance.
Starla began her maternity leave on October 1, 2008. Two days later, on October 3, Archway employees received a letter advising them that their jobs would end and their health insurance would be terminated on October 6. COBRA wsn't an option because the company was self-insured (administrated by Blue Cross Blue Shield), and the plan was being terminated.
So, Starla immediately did what any pregnant woman would do when unexpectedly laid off of an 8-year job who fears the loss of her health insurance: She called her midwife and insisted that her labor be induced and her child born within the three-day window in which she still had medical coverage.
Because her first child's delivery bill was approximately $9,000 three years before, and because she knew she would never be able to pay that amount for her second child's delivery, she decided "that we were getting this baby out, and it was going to be paid for."
On October 5, her delivery was induced, but excessive bleeding mandated an emergency cesarean section. Starla's daughter Kathryn was born three weeks early, and both are doing fine.
Because of the more than $700,000 in medical set-aside arrears that Archway was in when it shuttered, Blue Cross Blue Shield has denied payment for Starla's delivery based upon the plan's termination (i.e. no money, no plan, no coverage). She's now on the hook for more than $17,000 for the emergency cesarean section.
Starla hasn't been able to obtain unemployment benefits because recovering from the emergency cesarean section has left her "unable to work." Her husband Derek and her father Frank Phillips were also recently laid off, the father also from Archway the same day Starla was, after having worked there for 24 years.
Further reading available.