Health Access WeBlog

NYTimes has a horror story about diabetes and how it creeps up on you and "eat(s) you alive,'' as one doctor described it. In addition to being the leading cause of blindness and amputation, diabetes also affects the afflicted in a myriad other ways from head to toe -- depression, sleep issues, stroke, dental and hearing problems, liver and kidney problems, *paralysis (!)* of the stomach, ulcers, and various sexual problems.

Cases of diabetes are growing -- 8 percent of the US population had it in 2007. And by 2050, it could be 25%, according to the Centers for Disease Control.

I'm fixating on this for two reasons. 1) I'm genetically predisposed to diabetes; my father was diagnosed in his mid-40s. 2) Our insurance coverage trends make it very difficult for people to maintain and keep this perfectly treatable disease at bay.

As more people (not us, mind you) advocate for more stripped down health plans, devoid of disease maintenance, it creates all kinds of barriers to getting the meds and seeing the doctor -- all necessities for a person with diabetes.

I'll do a quick, shameless plug for our SB1522 here, which not only would organize the individual insurance market, but also establish minimum benefits -- such as doctors, hospitals and preventive services. It's one of the ways we could begin to tame the unruly individual insurance market, which has been rapidly degenerating over the past few years.... unless we want a nation of diabetic zombies by 2050.

Labels: Insurers, InTheNews, Legislation, Steinberg, Underinsurance

posted by Hanh Kim Quach | Permalink | 10:34 AM

David Lazarus at the LA Times had an excellent column last weekend about health insurers charging men and women different rates. When Blue Shield and other insurers admit they're charging women higher premiums because they are higher "risks'' (Read: more expensive), they're coming clean about the industry's already discriminatory practices against women. Though, in doing so, it further widens the gap between what women and men pay for health care. Women will wind up spending more, not only to *buy* care, but also to *use* care, as has been the case.

Since the steady increase of high-deductible health plans (and in the absence of stronger consumer protections such as community rating and minimum benefit standards) insurers have been permitted to passive aggressively charge women more based on the fact that women are trying to be conscientious about their health.

A Harvard Medical School study last year found women ages 18-64 with consumer-directed health policies wound up spending 218% more on health care than men. "High-deductible plans punish women for having breasts and uteruses and having babies,'' said Dr. Steffie Woolhandler, one of the authors of the study.

We require various gynecological exams. We need birth control pills (as a result of co-activities with men). Sometimes we have babies (as a result of said co-activities) -- though high-deductible plans don't cover maternity anyway. We go to the doctor when we hurt. We generally seek more preventive care than men. Hmmmm. And I thought I was just being responsible.

A world that allows high-deductible plans to proliferate -- as envisioned by John McCain -- is essentially a world that legitimizes deadbeat insurers, who want to thrust more and more costs onto women in the name of keeping prices low. But for whom?

Labels: Affordability, Insurers, InTheNews, Underinsurance

posted by Hanh Kim Quach | Permalink | 12:00 PM

How confusing and complicated is the individual insurance market? It makes the much-maligned mortgage industry look clear and simple in comparison.

I was reading a recent study in the Journal of Insurance Regulation (Winter 2007) conducted by Michael Wroblewski during his time at Consumers Union, and the comparison came up. From the article:

“The question remains how consumers choose individual health insurance when they are required to assemble the information on the relevant attributes themselves, because they do not have employers or unions acting as intermediaries for this purpose. And, unlike other financial decisions consumers make, such as mortgage products in which the market provides consistent information for standard products (e.g. 30-year mortgages), standardized information for individual health insurance products does not exist; hence, comparative cost, coverage and benefit data is much more difficult to come by.”

Our individual insurance market is like trying to figure out to compare mortgages where different companies had different terms and lengths, and its impossible to compare, with one company selling 27- and 32-year mortgages, another selling 31.5- and 26-year mortgages.

Contrary to those who mis-characterize the bill, SB1522 doesn’t prohibit the equivalent of a 28.5-year mortgage, if some insurer wanted to provide that “creative” product; it just requires that the insurance company offers a standard product—the equivalent of the 30-year mortgage—as a benchmark.

My hope with SB1522 is that we at least get to the place where people have a standard loan that they can compare between plans, that they are appropriately alerted when purchasing “subprime” insurance, and that we set a minimum standard to prevent the “junk” products that are the insurance version of predatory lending.

Obviously, with everything going on in the mortgage and housing crisis, there’s renewed attention whether those disclosures and consumer protections are enough. Yet it would be a major step to even get those basic protections in the individual insurance market.

Labels: Insurers, Underinsurance

posted by Anthony Wright | Permalink | 11:00 PM

Our efforts to reform the individual insurance market got more attention this week, by John Howard in the Capitol Weekly and Aurelio Rojas in the Sacramento Bee, which both profiled SB1522, by Senator Darrell Steinberg, and sponsored by Health Access California.

SB1522 passsed the Assembly Health Committee this week, and is now pending in the Assembly Appropriations Committee.

The Bee has the story of the Mary McCurnin and Ron Bednar of Rancho Cordova, who unwittingly bought a plan that the insurer Mid-West National Life Insurance Company called "definied benefit" coverage.

McCurnin and Bednar said they paid a monthly premium of $600 for what they thought was comprehensive coverage. But in 2002, after she was diagnosed with breast cancer and he had open-heart surgery, they learned otherwise.

Their plan covered only 10 percent of his hospitalization, and the company rescinded her coverage because she didn't disclose on her application that she was given a prescription for an anti-depressant years ago that she never filled.

With more than $250,000 in medical bills, the couple filed for bankruptcy protection and now face the loss of their home.

"Health insurance companies will do everything they can not to cover you," McCurnin said. "Having good (individual) health insurance is a myth."

The wife of the couple was rescinded under that now-infamous practice; the husband got "coverage," but found it covered only 10% of his costs because the benefit was capped. Examples like this inform consumer advocates' deep skepticism about the individual insurance market, and any attempt to expand it, as President Bush and now Senator McCain seek to do.

With little bargaining power, the individual consumer trying to get coverage will be at the mercy of the big insurance companies. SB1522 (Steinberg) tries to set some minimum standards in terms of benefits (doctors, hospitals, preventative care), and to place a cap on out-of-pocket costs. Other bills this year deal with rescission, or making sure than premium dollars go to patient care. All are consumer protections that attempt to make the situation a little more fair in an inherently unfair situation.

Even if all passsed, more reform will be needed. Both stories put this bill in the context of reconstructing health reform.

As the Weekly describes it, "Although the governor's health-care reform plan died this year in the Capitol's political crossfire, critical pieces have been resurrected and are quietly moving through the Legislature. One of the most important--already approved in the Senate and opposed by HMOs--would force health insurers to give consumers uniform, clear and accurate descriptions of their policies to aid comparative shopping."

And in the Bee, Senator Steinberg himself not only makes the clear case for the bill on its merits, and but ends the article making the case that the bill as a foundation for future, and more comprehensive, reform.

"As we move forward to more comprehensive reform in the future, creating confidence that people know what they are buying will be a key element," he said.

Labels: Insurers, InTheNews, Legislation, Steinberg, Underinsurance

posted by Anthony Wright | Permalink | 3:17 PM

Anne Eowan, lobbyist for the Association of California Life and Health Insurance Companies, made a marvelous suggestion in Assembly Health Committee.

She was opposing Health Access' sponsored bill, SB1522 (Steinberg), which would do lots of things -- including weed out junk insurance and organize the individual insurance market into five tiers so that consumers would know what they were buying if they bought a five-star plan, versus a one-star plan.

In opposing it, however, Eowan suggested that "more transparency would be good'' and welcomed efforts to have the California Health Benefits Review Board take measurements of the existing individual insurance market.

Luckily, we already have similar language drawn up on that. AB2289 (Chan) -- remember that from 2004? It was vetoed.

Then, though, Eowan's organization, along with her merry band of health insurers, took varying degrees of opposition, opining that having to explain how many enrollees they had in their various plans, what the deductibles, copays, out-of-pocket maximums were, etc. for various plans were, was far too onerous, expensive, burdensome, time consuming, etc.

Nice to see she's had a change of heart.

Labels: Insurers, Underinsurance

posted by Hanh Kim Quach | Permalink | 10:22 PM

75 million adults -- that's 42% of working age adults in the US -- had no insurance or really bad insurance (the kind that makes you pay up the nose anytime you sneeze) in 2007.

That's up from 35% of working age adults that were uninsured or underinsured in 2003, the first time Health Affairs did this analysis. A new analysis -- out today!-- updates the study from five years ago.

Among the findings:

25 million people who were technically "insured'' actually have really crappy insurance (that amounts to one-fifth of the entire "insured'' population)
The number of adults earning between $40k and $60k who were underinsured nearly tripled from 5% to 13%.
The number of adults earning more than $100k and were underinsured (meaning that they spent more than 10% of their income on out-of-pocket medical expenses) increased from 1% to 7%.

The series of studies is important because until recently, most analyses only tracked the number of people without coverage and how lack of coverage impacts a person's ability to stay healthy. Just as important now, though, is this tracking the number of people with inadequate insurance. High deductibles, high co-pays, high co-insurance and high out-of-pocket costs cause patients to behave in similar ways to a person who is uninsured -- they forgo care because of the expense.

Insurance companies like to argue that these low-quality, low-premium plans are at least a backstop to keep people from going into bankruptcy. But as our previous study has shown, people don't have much in the way of assets -- and a $5,000 deductible would wipe out the savings of 40% of Americans. Health Affairs (obviously a nerd's must-read publication) also recently published a study that showed uninsured families earning more than 300% of the poverty level had less than $4,000 in liquid assets. (Here's our blog post on that study).
From our perspective, being underinsured means you're paying premiums to be functionally uninsured. All in all, we don't really buy the insurance company logic on this and think they should be labeled and limited (and the most egregious ones banned) -- as SB 1522 would do.

Labels: Research, Underinsurance, Uninsured

posted by Hanh Kim Quach | Permalink | 11:32 AM

The effort to win national health care reform is heating up: lots of planning meeting and activities to ensure that there is a mandate for a new President and Congress to take this issue on, and to be ready to roll in 2009.

Consumers Union (a Health Access California board member) is spearheading a Cover America Tour: an RV that will criss-cross the country for four months, collecting stories about the issues that people have with the broken health care system.

The effort has a website and blog of interest, which includes a video of the launch of the Cover America Tour from Consumers Union's Yonkers headquarters, being cheered by staffers from the labs that test all those products that are evaluated in Consumer Reports. It should be an interest and informative trip, that I urge folks to follow along on the web.

The video prominently features the energetic Meg Bohne (pictured above, crouching), a Health Access alumnus, who has told me she give us partial credit (or blame) for her current assignment. On the website page that describes the whole enterprise, Meg Bohne cites her experience as a "a seasoned community activist, advocate and organizer, Meg has come to specialize in on-the-road campaigns in vehicles that have spanned a bus, an ambulance and, now, an RV." At left is the ambulance she drove up and down the state of California for Health Access, in the cause of lower prescription drug prices.

We wish Meg and the whole crew at Consumers Union luck in their trip and their effort. We look forward to hearing the stories, the personal health care experiences, and the adventures on the road!

Labels: ExpandingCoverage, Federal, HealthAccessCommunity, Underinsurance, Uninsured

posted by Anthony Wright | Permalink | 2:02 AM

As the Democratic presidential candidates debated whether their "universal coverage" plans were "universal"--and what that meant--there wass surprisingly little debate about the definition of "coverage."

What makes "coverage" coverage?

It's a good question, as Florida Governor Charlie Crist just signed a so-called health reform that doesn't expand coverage one bit, but rather strips down the definition of coverage to make the premium cheaper. Critics say that as insurers water down the benefits, at some point the value of the coverage is so little that it's not worth paying premiums for in the first place.

It seems people get coverage to prevent the real health and financial consequences of being uninsured. They literally pay a premium to 1) get the care they need, and 2) not face financial ruin as a result.

There are some products out there that don't meet this basic definition. For example, we've heard of products--some sold by disreputable outfits, sometimes on TV at 3am--that say they provide hospital coverage, but only reimburse $200/day. Only if you've been to a hospital do you know that such a plan doesn't begin to cover an overnight stay, and that such "coverage" from a masssive hospital bill is merely an illusion. It's "junk" insurance.

SB1522(Steinberg), which passed the California Senate Tuesday, would set a minimum standard for coverage as well, in two basic ways:

* It would set an overall cap on out-of-pocket costs, so people paying premiums would not face unlimited financial liability when they get sick or have an emergency. This won't eliminate your standard high-deductible plans, may be a (not great) option for a healthier, wealthier person who wants to save on the premium and who has the ability to self-insure a few thousand dollars of a deductible. But it would eliminate those plans which cover so little or impose so much cost-sharing on the patient that the person continues to be at risk of banktruptcy.

* It would requires that a plan should include doctor, hospital, and preventative care, preventing hospital-only coverage. This would prevent hospital-only plans that leave patients in a situation where cancer isn't covered, since most of the treatment is in a doctor's office, rather than a hospital. Even worse, you don't want an perverse incentive for people to want the more invasive, more expensive hospital treatment unless they need it. Again, these plans often provide a false security to patients--until its too late.

These "junk" plans, because they collect premiums but are far skimpier in paying out benefits, can be very lucrative for the insurers who sell them. But they have the capacity to undermine the very notion coverage altogether. What's the point of paying for coverage, if you still face financial ruin?

People are growing more and more concerned that their coverage will not be there for them when they need it. They are frightened that even if they are insured, there will some loophole or provision that leaves them with significant medical debt. That's why SB1522(Steinberg) and other efforts are so important, to make the definition of coverage mean something. Consumers with coverage deserve some security that with their premium, they will be protected.

Labels: Insurers, Legislation, Steinberg, Underinsurance

posted by Anthony Wright | Permalink | 11:52 PM

Senator Steinberg just presented SB1522 on the Senate floor. The preliminary count is that it passed, 21-14, largely on party lines.

Senator Cox was the only other speaker, in opposition. An insurance agent, Cox suggested that "Senator Steinberg should find himself a good agent," and that an agent could provide the information to help a consumer decide what coverage to get.

He argued that with the classification of health plans into five tiers, "you've taken away the flexibility" which will lead to a "higher-premium program with fewer enrollees."

In fact, the five tiers allow for lots of variation and flexibility within those tiers. Above some minimum standards (see below), there is total flexibility in benefit design. The tiers will simply provide consumers some guideposts, so they are better be able to make comparisons between insurers.

SB1522 does seek to eliminate some "junk" insurance that leaves patients with unlimited financial exposure, undermining the point of coverage in the first place. Coverage would have to have some overall cap on out-of-pocket costs. The minimum standard for coverage would need to include doctor, hospital, and preventative care, effectively restricting doctor-only or hospital-only health coverage--as if people can guess that not just the type of ailment they will have, but the type of treatment as well.

But other than that, there's lots of flexibility. As Senator Steinberg said in closing, the basic point of the bill is to have clear information. And, he asked, while many people may benefit from "a good broker like Senator Cox," what's the harm in providing everyone as much information as possible? "Information is a good thing, and provides greater flexibility" for consumers.

Labels: Insurers, Legislation, Steinberg, Underinsurance

posted by Anthony Wright | Permalink | 3:43 PM

SB1522(Steinberg), sponsored by Health Access California, is up for a full Senate vote this week.

The bill would standardize the individual insurance market, so that consumers have a better sense of the coverage they are buying, and allow for "apples-to-apples" comparisons between plans. It would create clear categories so that people would have a better sense of how comprehensive their plan was, and would set a minimum standard for benefits to include doctor, hospital, and preventative care, and have a overall cap on out-of-pocket costs. This would eliminate the "junk" insurance that leaves people to believe they are covered but finding out later they have significant financial exposure.

Below is the testimony of Susan Braig (pictured above, with Senator Darryl Steinberg, author of SB1522). With a limited income to pay premiums, she understood she was buying catastrophic coverage... but not that her "hospital only" plan wouldn't cover the significant costs of being treated for breast cancer, because most of those treatments were not in a hospital.

This is a excerpt of her testimony in the Senate Health Committee earlier this year:
I am a self-employed grant writer, whose Stage 2 Breast Cancer has, thankfully, not metasticized, though my credit card debt has.

In 2001, after a year with no health insurance, my 50th birthday sent me comparison shopping, and I went to Blue Cross. I purchased what I considered to be a “catastrophic” policy, their lowest tier, their BASIC PPO 1000. I thought my out-of-pockets costs would be limited to $3,500, comprised of a $1,000 deductible, plus a $2500 co-payment requirement before full coverage kicks in.

Blue Cross made it clear up front, this plan did not cover doctor visits, tests or prescriptions; I rationalized that, since I was healthy and rarely needed a doctor, why sweat the "small stuff?"

The important thing was, Blue Cross said they would cover 80% the big stuff: surgeries, emergencies, and hospitalizations, and with the big stuff, I would quickly spend $3500, and then Blue Cross would pay 100% of my care for the rest of the year.

Prior to my 2004 diagnosis, I assumed fighting a catastrophic disease like cancer involved the big stuff.

* What I didn’t realize then, but I know now, is that during the next 11 years, most of my medical services I would need in my battle with cancer would involve things not covered—specialist exams, ultrasounds, an $8,000 MRI, lab tests, prescriptions.

Even my chemotherapy treatments were considered doctor visits, unless I had the identical treatments an hour from home in a hospital.

* I also didn’t realize that the way deductibles and co-pays are calculated meant they didn’t count any of these non-hospital expenses to meet my deductible, and I would almost never reach my annual $3500 cap, no matter how much I spent.

It’s true that after I met my deductible, Blue Cross did cover 80% of in-hospital services, such as my Lumpectomy and a 3-day emergency hospitalization in 2004… although by the time I paid off my $1000 deductible, my various 20% co-payments fell $30 short of the $2500 co-payment requirement to get full coverage.
* For a time, due to my low income, I got help with the costs that Blue Cross didn’t cover from the state’s Breast and Cervical Cancer Treatment program. That was a lifesaver—even though I was still paying premiums to Blue Cross.

* I still have significant follow-up treatments. In each of the last few years, I have paid out over $5,000 a year in out-of-pocket costs, on top of what I pay in premiums, yet my insurance pays nothing. I expect these treatments—and these costs--to go on for several more years. I already have over $40,000 in credit card debt, mostly stemming from my illness and medical care.

With the ongoing costs of follow-up care, I begin to wonder, "I'm paying insurance premiums for WHAT?"

When people seek coverage, they should know what their options are, and what they are getting. When they have coverage, they should have the confidence that it will actually provide protection against financial ruin and bankrtupcy. SB1522(Steinberg), if it passes the Senate floor this week, will take a major step in providing that clarity and security.

Labels: Insurers, Legislation, Underinsurance

posted by Anthony Wright | Permalink | 9:32 AM

The New York Times had an excellent article this weekend about workers, who have health coverage through work, feeling financially strained.

The reason: businesses - unable to absorb higher health care costs - have decided that workers need to absorb more of these costs. Businesses are buying crappier coverage (this doesn't mean cheaper premiums, just cheaper than more comprehensive plans, but still expensive) and asking workers to pay a greater share of the premium. So not only are premiums for workers increasing, but the plans that they are getting are getting worse, which means higher copays, deductibles, and less coverage.

It used to be that worrying about how to pay for health care happened mostly if you didn't have insurance. Then, it started creeping into the ranks of the insured -- but only those who bought insurance on their own, without the benefit of a group buying in bulk to negotiate lower rates. Now, though, health cost worries are hitting the employer market -- where most Americans get their coverage.

One *insured* worker said he was losing the equivalent of a month's worth of pay with the higher premium and deductibles. That's in addition to the fact that the coverage isn't very good.

Another *insured* worker, who has diabetes, doesn't monitor her blood sugar regularly and can't afford to see an eye doctor on top of other normal everyday expenses.

The Times characterized these plans as "health insurance in name only.'' I like that: essentially people are paying to be uninsured under these plans.

My health plan colleagues would argue that having some kind of coverage is better than being uninsured. No?

But is it really? At what point does debt become so crushing that it doesn't matter if the number is $60,000 or $200,000 in debt, and accruing interest. Especially considering that families that are insured, earning more than 300% of the poverty level actually have negative (-$600) net financial assets according to the latest study by Health Affairs. On an annual income of $60,000, either way, you're screwed.

Labels: Employers, InTheNews, MedicalDebt, Underinsurance

posted by Hanh Kim Quach | Permalink | 2:01 PM

Health Affairs has just released an excellent new study, which challenges the notion that high-deductible health plans with their low premiums are offering the otherwise a good alternative to going uninsured. Based on this research, and an updated report from the Government Accountability Office tells us who does benefit from these plans.

The Health Affairs study just confirms what advocates have been saying -- and debunks what insurance companies argue: high deductible plans are not a sound choice for families who are uninsured. One medical emergency would leave these families vulnerable to tens of thousands in medical debt, if not bankruptcy.

UPDATE: Check out Health Access' earlier report on "Thin Protections," also showing how high deductible plans provide little comfort for middle-income families that are often asset-poor.

Among the Health Affairs report's findings:

Only 21% of households with one uninsured person could cover a $1,000, along with their other obligations.
No more than 9 percent of households with one uninsured person could meet the out-of-pocket maximum of $5,000.

Also interesting:

$300: Uninsured families earning less than 300% of poverty ($63,600 for a family of four) had an average of $300 (!) in liquid financial assets. Incidentally, this is pretty much all they have too.

Higher income assets thin: Even for those families, who were uninsured, earning more than $63,600 -- assets were pretty scant. Gross financial assets -- which include stocks and mutual funds -- totalled $3,600 for these families. Families WITH insurance had more than four times that amount: $16,420.

So who are these high deductible plans for anyway? Well, a new GAO report tells us that:

The Government Accountability Office just updated their 2006 report on Health Savings Accounts, which can only be opened with a qualifying high-deductible health plan.

First -- only about half of the 4.5 million HSA-eligible plan enrollees opened an HSA.

And -- those who opened them have more money. The average income for the enrollees of these plans was $57,000. For those who opened an account, though, the average income was $139,000 -- more than twice as much.

I'm hoping some insurer folks or defenders of high-deductible plans can explain, again, why they still believe in light of this research that these plans are a good idea for the uninsured.

email me: hquach@health-access.org

Labels: Insurers, Research, Underinsurance

posted by Hanh Kim Quach | Permalink | 2:31 PM

One of the bills Health Access is watching that's up in Senate Health Committee this week is SB1603 (Calderon), which would authorize the state to license and regulate so-called discount health cards.

We question the very existence of these things. Not only do they annoyingly clog up the fax machine (you've seen those strange health "insurance'' offers), but they rely on consumer naivete to make money.

Their sin is that they're incredibly deceptive and provide questionable -- if any -- value to consumers. Discount health plans entice consumers with words like "no pre-authorization,'' "no pre-existing condition denial,'' and "no waiting period." They exaggerate their value, promising low prices -- discounts of as much as 80% -- at a vast "network'' of providers.

But often, neither is true. Consumers have no idea what the price for which the "discount'' is based on, rendering the discounts essentially meaningless -- and often, they could have received the discount anyway if they told the provider they were uninsured.

Mila Kofman, health policy expert formerly of Georgetown University, also tested out some cards and found that nearly three-quarters of providers contacted did not even realize they were part of the "provider'' network. Complaints filed against these cards in California show a similar patern.

Kofman's research also finds that the monthly cost for the identical card can range from $54.95 to $120 because of the pyramid-esque marketing for these products. Cancelling the cards can also be tricky, as many continue to charge a former subscriber's credit card even after they consumer quit the service.

Sadly, SB1603 would create a way to allow these fake plans to operate legally and continue to bilk consumers.

Boo.

Labels: Insurers, Underinsurance, Uninsured

posted by Hanh Kim Quach | Permalink | 10:27 AM

For those who were not able to witness Senate Health Committee in person, this week, it's not always as boring as you might think.

Committee Chair Sheila Kuehl and Sen. Dave Cox had an interesting exchange during testimony of our bill SB1522, which would help organize the individual insurance market and place caps on out-of-pocket costs. Most importantly, it would help weed out junk coverage and require at least mimimum coverage of doctor's office visits and preventive care.

Kuehl shared a story of a caller on a radio show who had ambulance workers lay a bill on her chest as she was being wheeled into the hospital emergency room.

"Surely,'' snorted Sen. Dave Cox, R-Fair Oaks, "they would do no such thing.''

Responded Kuehl: "Yes, Sen. Cox. And a hospital in LA would surely not dump patients on Skid row in the middle of the night.''

"Well...'' grunted Cox. "Maybe in Los Angeles.''

Labels: Legislation, MedicalDebt, Underinsurance, Uninsured

posted by Hanh Kim Quach | Permalink | 2:12 PM

It's really really annoying to me when people who talk about the "affordabilty'' of insurance only fixate on the premium prices.

And it's especially offensive when we have a person travel from Los Angeles to Sacramento to testify about junk insurance plans -- after having incurred $40,000 costs -- be told that "at least you had insurance.''

As part of an illustration for why we need SB1522 (Steinberg) to organize the individual health insurance market and weed out junk insurance plans, we brought up someone who actually had one of these hospital-only junk insurance plans -- Susan Braig, a former art teacher.

Susan was a conscientious consumer with a modest income. Approaching age 50, she decided she needed to get health insurance after having dropped it briefly in the late-90s during the huge run-up in premium prices. After carefully researching the balance of premium and benefits, she selected the coverage she could afford -- hospital-only, catastrophic coverage through Blue Cross -- the Basic PPO 1000. This has a $1,000 deductible with a $3,500 maximum out-of-pocket, and did not cover doctors visits. After the deductible, 80% of big-ticket services (like surgeries, hospitalizations, etc.) would be covered.

But, Susan rationalized, as many in her predicament might, that she's healthy, never used her insurance before, and could afford the doctor's visits here and there, but that $3,500 was a modest amount to pay if a catastrophic illness befell her.

Well -- shortly after purchasing the policy, she was diagnosed with breast cancer -- and over two years, her credit card debt increased from $5,000 to $45,000.

None of the series of doctors visits, prescription drugs, ultrasounds and lab tests were -- or will be -- covered by Basic PPO 1000. What's worse, it also did NOT count toward her deductible $1,000 deductible.

"Even my chemotherapy treatments were considered "doctor visits'' unless I had the identical treatments an hour from home in a hospital.''

Functionally, Susan is uninsured. This experience has left Susan wondering -- "I'm paying insurance premiums for WHAT?''

So it continues to gall me that the industry makes arguments that the "cost'' of insurance will go up if we weed out plans like Susan's. Up from what? Isn't $40,000 over two years enough already?

Labels: BlueCross, Insurers, Legislation, Underinsurance, YearOfReform

posted by Hanh Kim Quach | Permalink | 4:33 PM

And I'm a good bargain shopper. (My prize: 10-piece set of top tier Calphalon pots once for $70) Here are my rules for assessing a good bargain:

Is it a known product (do I know it's a quality product -- like Calphalon);
If it's marked down, is it a good price compared to other similar products;
Lastly, will I use it (because it does me no good to get a good deal on shoes if I'm not going to wear them...and I've done this way too much).

This mental checklist is meant to ensure that the product is of value to me.

Which brings me to the letters submitted by the health insurance industry SB1522 (Steinberg), which create standards for health insurance that would enable any person to go through such a checklist when buying insurance on their own. (See our Fact Sheet on SB1522.)

In short, SB1522 would:

Classify health plans into five "tiers'' so consumers would know what they were buying - i.e. a top tier plan means comprehensive, bottom tier means "catastrophic.'' (Known/quality product)
Insurers would have to have at least one plan in eacth tier, enabling apples-to-apples comparisons.
Establish minimum benefits, which would weed out junk insurance -- such as "hospital only'' plans that barely covers the hospital visit. (will I/can I use it?)

Let's step back a bit. Let's say you don't receive health insurance on the job now and have to go out and scavenge for a decent plan. Go to http://www.ehealthinsurance.com/ and you'll get hit with 107 plans with all manner and range of co-pay, deductible, premium, office visit policies.

The "choice'' argument: Insurers argue that SB1522 will lead to a reduction in consumer choice. First off, their argument is bogus. Choice will still exist, it will just be more organized and limited. And limiting choice for consumers is actually a good thing, according to research on a parallel issue-401(k)s (the research on choice can also be applied to choosing ice cream, jams and insurance policies):

"...Findings from this study show that an extensive array of options can at first seem highly appealing to consumers, yet it can also reduce subsequent motivation to purchase this product...the very act of making a choice from an excessive number of options might result in "choice overload,'' in turn lessening both teh motivation to choose and the subsequent motivation to commit to a choice....''

That research correlates with private polling of uninsured and individual market participants, which also reveals that consumers do not have confidence in their understanding of what the plans provide, nor do they trust the literature that is provided by the plans.

SB1522 would provide choice, but in an organized fashion so that consumers could go through their mental checklist and feel comfortable about a "known product'' and make comparisons against other plans.

Eliminating "lower cost insurance" argument: Lower cost insurance is only lower cost to buy; it's not lower cost to use. In fact, consumers who would benefit from SB1522 are spending twice as much on health care as those who are able to get insurance through their jobs. What insurers really mean here, is they want to get a check from you every month for your premium, but not have to spend any money on you until you've spent $2,000 (or whatever the deductible is) for doctors visits, medicines etc. Don't you love paying for something, just so that you can pay for more things? This violates Rule #3 in evaluating value: will i use it. Research has shown that consumers are half as likely to see the doctor, fill their prescriptions -- actually take care of their of their health.

That sure doesn't sound like a good deal to me.

Labels: Insurers, Legislation, Underinsurance

posted by Hanh Kim Quach | Permalink | 1:46 PM

Kiplinger's has a really strange and seemlingly contradictory article about how businesses can tackle their health care costs. One of their top bullets extols to businesses the value of Consumer-Directed Health Plans - which often carry high deductibles and do not have first-dollar coverage for preventive services.

The rest of their bullets outline a series of solutions that encourage preventive health, including free drugs to maintain chronic diseases, paying the full amount of preventive services, and preventive screenings -- pretty much the opposite of what Consumer directed and High Deductible health plans provide.

These bare bones plans are less likely to provide preventive services -- meaning patients would have to pay 100% of the bill for mammograms, colonoscopies, well-visits. Such a requirement makes enrollees in these plans are twice as likely to skip care. If businesses really want to save money in the long term and have a healthier more productive workforce, Consumer-Directed and High-Deductible plans are not the way to go.

Labels: InTheNews, Underinsurance

posted by Hanh Kim Quach | Permalink | 2:03 PM

Kudos to Prof. Tony Sheppard at CSUS, whose careful reading of the newspaper leads us to this story about McCain's recent doctor's visit and cancer screening.

The offending comment:

"Like most Americans, I go see my doctor fairly frequently."

Of course, he can. As a member of Congress, he has access to fancy health coverage through the federal government, which pools together millions of federal workers and provides a really impressive array of options.

For health advocates, though, this off-the-cuff comment belies a deeper concern: Sen. McCain's lack of empathy and understanding for what Americans face is startlingly scary. Because he believes that most have "fairly frequent'' access to the doctor, he sees nothing wrong with his health proposal, a scheme that would cause more people to have worse coverage and bear increasing costs to stay healthy and productive.

For 47 million Americans who lack health insurance and countless others who have inadequate coverage through high-deductible health plans or other products of that ilk, seeing a doctor "fairly frequently'' is a fiction. And given that approximately 2 million more Americans became uninsured annually every year since 2000, we can only expect that number to grow.

If you're uninsured, or have inadequate health coverage, and you're forced to foot 100 percent of the bill to see a doctor - you're not going to go. "I'm healthy; I don't need a mammogram; I don't need a colonoscopy?'' many rationalize. The evidence is there: uninsured patients spend less than *half* the amount that insured people do on health care, according to the Institute on Medicine. Specifically with regard to doctors - 71% of Americans with insurance see a doctor annual, versus 41% of those with no insurance.

Not getting medical care isn't just a problem of the uninsured. Patients who have inadequate coverage are twice as likely to either delay or avoid getting health care because of cost, and far less likely to follow treatments for chronic conditions such as arthritis, high cholesterol or hypertension, according to the 2007 EBRI/Commonwealth Fund survey. Again, specifically with regard to doctor visits -- those with inadequate insurance are nearly twice as likely to avoid seeing a doctor or specialist because of the cost.

This is what we'll be treated to under a McCain health care plan, where employers will be encouraged to dump their workers into a less regulated and less efficient, more expensive individual market to fend for themselves, and where consumers are encouraged to buy high-deductible health plans. Sen. McCain's remark may have been flippant, but shouldn't be ignored.

Labels: InTheNews, PresidentialCandidates, Republicans, Underinsurance

posted by Hanh Kim Quach | Permalink | 2:16 PM

The San Diego Union Tribune, today, has a story about an entrepreneur who is providing limited-benefit health plans, useable in both US and Mexico, and marketed toward low-wage workers.

Details on exactly how this works are thin, so I'm a little shaky on the economic benefits of this, but from what I was able to glean from the story, I'm not clear that consumers are getting THAT MUCH of a benefit.

So the premise is this: lots of low-wage Latino workers, who consider both countries home, don't buy health coverage because it's too expensive and it's not useful in both countries. So this company, Sekure, sells insurance policies at a cost of between $100 and $300 that can be used in both the US and Mexico.

Benefits are a $300 annual maximum on doctors visits, $3,000 maximum on hospital and discounts for doctors visits, prescription drugs, etc. from participating providers.

So essentially -- you get approximately $3,300 in actual dollar benefits (excluding discounts) for shelling out $3,600 in premiums. (The individual may not be responsible for *all* these premiums, the idea is employers would buy this kind of plan, rather than a comprehensive plan -- or no plan at all.)

The entrepreneur says he doesn't think this kind of plan is for everyone, and I'm sure he genuinely believes that. That's what they all say. But the reality is, given this option - versus a more expensive comprehensive option that actually provides coverage - some employers who consider their workforces "disposeable" will opt for this cheaper, bare bones plan.

I don't see this type of bare bones plan an "innovation.'' It's more of a distraction to what we really need to do, which is to somehow extend affordable coverage -- that is useful practically and culturally -- for all Californians. Lowering the bar for coverage hurts everyone.

Labels: InTheNews, Underinsurance

posted by Hanh Kim Quach | Permalink | 1:56 PM

In the rubble of reform, what we have now is Blue Cross -- the state's largest insurer, which was opposed to any change to the status quo -- petitioning doctors to turn in their patients with "pe-existing conditions,'' presumably so Blue Cross can drop them. The story is in the LA Times.

Doctors, fortunately, think this is wrong and are telling the state to step up and smack Blue Cross, calling the request "deeply disturbing, unlawful, and interferes with the physician-patient relationship."

My favorite line in the story, though, is Blue Cross defense of itself:

Blue Cross doesn't always cancel the policies of patients with discrepancies in their applications, (spokewoman) Troughton noted. Sometimes it may offer them another plan, she said.

Right. Like one with a gazillion dollar deductible, where a patient is essentially paying to be uninsured -- paying Blue Cross premiums at the same time they are paying full cost for all their medical services.

Labels: BlueCross, Insurers, Underinsurance

posted by Hanh Kim Quach | Permalink | 11:11 AM

Health Affairs has a new report this week about how hospitals recover a higher percentage of their charges from uninsured patients than those on Medicare.
On average, the prices uninsured patients paid in California, from 2004-05, were 20% more than Medicare.

Of course, advocates have tried to deal with this issue in past years -- in 2005 securing a signature on AB774 (Chan), which, among other goals, essentially bans overcharging of the uninsured and ties their rates to Medicare.

It will be interesting to see an update on this study looking at rates after the law's implementation in 2006. We're getting mixed reports from the field about whether hospitals are properly advising uninsured (and underinsured) patients of their rights to apply for discounted rates, and whether information about the policies are properly posted. We also have no idea if patients are getting the reduced rates.

In the meantime, also because of AB774, the Office of Statewide Health Planning and Development (yes, it's a mouthful) has launched its own website on hospital fair pricing. (and yes, we know the URL is really awful and makes no sense) that allows consumers to search hospital discount policies in their area.

Labels: InTheNews, Research, Underinsurance, Uninsured

posted by Hanh Kim Quach | Permalink | 3:30 PM

The Senate Health Committee heard a number of Republican bills on Wednesday. All but one failed. The special session bills were resurrected from 2007, where many either failed or were not heard in committee. Following is a list of the bills, purpose, and outcome:

SBx1 5 (Cox): Would redirect First Five tobacco tax funds to pay for health care services. FAILED
SBx1 9 (Runner): Directs state to issue licenses to open more clinics, including in retail locations. FAILED.
SBx1 10 (Maldonado): Would create a tax credit for those who have Health Savings Accounts, which are used with high-deductible health plans. Efforts to conform state and federal tax laws on Health Savings Accounts have failed the past two years because tax credits through them are predicated on the fact that individuals are underinsured. FAILED
SBx1 16 (McClintock): Allows out-of-state insurers to offer health coverage in California, essentially negating the voter-approved HMO Patients Bill of Rights guaranteeing 23 protections such as cancer screening and children’s immunizations. FAILED
SBx1 21 (Cogdill): Creates a tax credit for providers practicing in rural areas. FAILED
SBx1 23 (Ashburn): Creates a tax credit for businesses that set up a Section 125 account for their employees, which enables use of pre-tax dollars for health expenses. PASSED

Labels: Legislation, Republicans, Underinsurance, YearOfReform

posted by Hanh Kim Quach | Permalink | 2:56 PM

It's an evocative term. In fact, "subprime" is the "Word of the Year," according to the American Dialect Association. (It beat out other noteworthy words, including Googleganger, vegansexual, and waterboarding.)

Typically use in reference to mortgages, it's clear that such a designation is needed in the world of health insurance. There's lots of "junk" health insurance out there, where people pay a premium and may not realize how little it covers--until it is too late. This includes disease- or treatment-specific coverage, "bare-bones" or "skeleton" plans, coverage that is capped, etc. It includes products sold by companies like Mega with daily caps and other signficant cost-sharing, and simply some of the high-deductible policies, like Tonik, sold by Blue Cross.

Some represent a trade-off that some wealthier people can afford to make, to have greater cost-sharing in order to get cheaper premiums. But other plans are, frankly, close to consumer fraud, and should not be certified to be sold in the market. In the interest of disclosure, some of these plans should, at the very least, be clearly marked as "subprime," so people know what they are buying the first place. Right now, there's no minimum standard for health insurance--It's just "let the buyer beware."

With support from the national group Community Catalyst, Health Access is working with Western Center on Law and Poverty and several other consumer and community groups over the next several years to work on issues of "underinsurance." This Health Initiative on Overcharging and Underinsurance ("Health IOU" for short) will work to prevent medical debt that too many insured people face.

We will work to better implement AB774, the law against hospital overcharging we passed in 2006. But we also want to do a better job providing oversight of these "subprime" insurance plans as well.

The proposed health reform does set a minimum standard for coverage, that is inclusive of "physician, hospital, and preventative services," as well as "existing coverage requirements under law." It doesn't do all we wanted, but it does much more than what exists in the status quo, including creating a process to set more specific standards, including on cost-sharing. It establishes a framework to work from, including organizing the insurance market in tiers, so people have a much better sense of what kind of coverage they are buying in the first place.

In other words, if health reform passes, there's still will be work to do. If health reform does not pass, there will be a helluva lot of work to do, to protect consumers from the perils of subprime insurance.

Labels: Underinsurance, YearOfReform

Killing us softly...

Wednesday, July 02, 2008

Deadbeat Insurers

Tuesday, July 01, 2008

Mortgage metaphor...

Tuesday, June 24, 2008

Buyer beware, indeed...

Sunday, June 22, 2008

Let's do it, then.

Tuesday, June 17, 2008

An Unhealthy Trend

Tuesday, June 10, 2008

We knew her when...

Sunday, June 01, 2008

What constitutes coverage?

Tuesday, May 27, 2008

The debate on SB1522...

When cancer isn't covered...

Healthcare Armageddon

Tuesday, May 06, 2008

Who are these made for anyway?

Friday, May 02, 2008

On top of student loans...

Sunday, April 20, 2008

Fake Plans

Monday, April 14, 2008

Only in LA?

Friday, April 11, 2008

Chaps my hide

Wednesday, April 09, 2008

I love a good bargain...

Friday, April 04, 2008

Smart Business

Wednesday, March 26, 2008

In McCain's small universe

Monday, March 24, 2008

Cross Border Coverage

Thursday, February 28, 2008

What we're left with

Tuesday, February 12, 2008

New Paper. Old Problem.

Wednesday, February 06, 2008

Republican bills: Revived, then Rejected

Thursday, January 17, 2008

The word of the year, the work of the next several years

Tuesday, January 08, 2008