Obama's health-insurance story unraveling a bit?

Byron York did some digging into one of Barack Obama’s oft-told anecdotes about health insurers — and discovers that the facts differ significantly from Obama’s version.  Obama explained his passion for health-insurance reform during the presidential campaign as a product of the fight his mother endured to get coverage for her eventually-fatal illness, uterine and ovarian cancer:

“I remember in the last month of her life, she wasn’t thinking about how to get well, she wasn’t thinking about coming to terms with her own mortality, she was thinking about whether or not insurance was going to cover the medical bills and whether our family would be bankrupt as a consequence,” Obama said in September 2007.

“She was in her hospital room looking at insurance forms because the insurance company said that maybe she had a pre-existing condition and maybe they wouldn’t have to reimburse her for her medical bills,” Obama added in January 2008.

“The insurance companies were saying, ‘Maybe there’s a pre-existing condition and we don’t have to pay your medical bills,’ ” Obama said in a debate with Republican opponent Sen. John McCain in October 2008.

True story, or fabrication?  As with most personal anecdotes turned into political arguments, it’s a little of both, according to York and a recently published biography of Obama’s mother.  Ann Dunham did fight with an insurer to cover medical costs in the last months of her life, a battle that Obama himself waged on her behalf.  However, the policy in question was not for health insurance, but for disability coverage that Dunham wanted to cover her deductibles and out-of-pocket expenses — which, to be fair, were not insignificant.  Dunham took a job in 1994 with Development Alternatives, which provided her with health insurance, and dispatched her to Jakarta to work with an Indonesian ministry focused on women’s issues.  She began to suffer severe abdominal pain, which an appendectomy did not cure, and worried that she had something much worse.  Dunham went back to Hawaii in 1995, where the proper diagnosis was made.

According to Dunham biographer Janny Scott, a New York Times reporter, Dunham’s health insurance covered her illness without question:

That is the time during which Obama says his mother battled insurance companies to cover her illness. But Scott, who had access to Dunham’s correspondence from the time, reveals that Dunham unquestionably had health coverage. “Ann’s compensation for her job in Jakarta had included health insurance, which covered most of the costs of her medical treatment,” Scott writes. “Once she was back in Hawaii, the hospital billed her insurance company directly, leaving Ann to pay only the deductible and any uncovered expenses, which, she said, came to several hundred dollars a month.”

Scott writes that Dunham, who wanted to be compensated for those costs as well as for her living expenses, “filed a separate claim under her employer’s disability insurance policy.” It was that claim, with the insurance company CIGNA, that was denied in August 1995 because, CIGNA investigators said, Dunham’s condition was known before she was covered by the policy.

Dunham protested the decision and, Scott writes, “informed CIGNA that she was turning over the case to ‘my son and attorney, Barack Obama.’ ” CIGNA did not budge.

In September 1995, Dunham traveled to New York for an evaluation at the renowned Memorial Sloan-Kettering Cancer Center. Returning to Hawaii, she began a new course of treatment. She died in November.

Dunham’s death was tragic, of course, and Obama might have a valid reason to be angry at CIGNA for refusing to cover some of the expenses.  But if Scott gets the story right, then Dunham’s health insurer actually did meet its obligations to cover the portion of Dunham’s bills for which it was liable.  She didn’t face the prospect of paying the entirety of her bills without coverage, but the portion that her insurer wouldn’t have covered anyway — without the ability to earn a paycheck, which would have been daunting enough.

The anecdote in its actual form would make a good case for someone who wanted to reform disability coverage.  It looks like Obama exercised some significant poetic license into an argument that health insurers are evil corporations that need government control in order to fulfill their contracts.