With all this talk of “individual responsibility” and mandates in health care reform, it’s sometimes easy to forget that people actually want health coverage. Desperately. If they don’t have insurance, they are the ones who face the consequences, which are to live sicker, die younger, and be one emergency away from financial ruin.
The issue isn’t that individuals don’t want coverage, but that there are barriers to getting it, in each of the three ways that Californians get coverage: through employers, public programs, or the individual market. In each case, health coverage is not always (or even often) available, affordable, or automatic. The point of health reform should be to remove these barriers.
Employer health benefits cover 19 million Californians, just over half of the population.
* Is it available? There are many who simply don’t have a connection to the workforce, like early retirees, students, or divorcees. Yet those that do work often find that their employer doesn’t offer coverage, or that they (or their family members) are not eligible for it. Over 80% of the uninsured are workers or their family members. Yet more employers are scaling back benefits or dropping it altogether.
* Is it affordable? For most, employers pick up most, if not all, of the tab of the premium. (Economists say that the costs are just made up in foregone wages, but such payments are at least spread thoughout the employer’s workforce.) Many employers do require workers to pay some share-of-premium, and a plan that has some cost-sharing, including deductibles and co-payments. As a result, there are some workers, particularly lower-income ones, who decline to pick up coverage because of the cost.
* Is it automatic? One of the reasons that employer-based coverage is so prevalent is that it is pretty automatic: you typically sign up at the workplace, which is most people’s main institutional connection to the world around them.
Public programs cover 10 million Californians, around a third of the state, largely though Medicare, Medicaid, and SCHIP. For the purposes of California health reform, let’s focus on the state versions of the two latter programs, Medi-Cal (with 6.5 million) and Healthy Families (with 800,000).
* Is it available? At the state level, Medi-Cal covers low-income seniors, people with disabilities, children, and in some cases, their parents. (Healthy Families covers children just above the poverty line.) However, these programs have stringent eligibility requirements, so that they don’t cover even the very poor comprehensively. A nonelderly adult without a child at home, even if she is under the poverty level of $10,210/year, would not get Medi-Cal coverage without a disability. Undocumented Californians are largely excluded from these programs. Other restrictions for Medi-Cal include an assets test that prevents people from having any real savings.
* Is it affordable? If you do qualify, the public programs do offer a range of benefits at free or with small co-payments. (Of course, there are always medical expenses that are not reimbursed.) There is limited premiums and cost-sharing in the Healthy Families program.
* Is it automatic? The restrictions listed don’t just exclude people who are not eligible for these programs, but many who are eligble as well. Given their complexity, many people don’t know if they are eligible or not. Even if they are, the bureaucracy and paperwork to enroll can be substantial and off-putting. Recent efforts have made strides in reducing the paperwork burden, and having children enrolled through schools and other social programs.
The individual insurance market covers under 2 million Californians, less than 5% of the population.
* Is it available? For many, no. Insurers often deny people from coverage because of “pre-existing conditions,” which could be health conditions such as diagnosed cancer or diabetes to relatively small diagnoses such as heartburn, childhood asthma, or simply taking a few prescriptions last year.
* Is it affordable? The individual market is the most expensive way to get health coverage, since individual consumers don’t have the ability to negotiate with the insurers like large employers and public programs do. Insurers are allowed to charge different rates based on age, health status, gender, and other factors. For many low- and middle-income, as well as older, consumers, the cost of health insurance is prohibitive.
* Is it automatic? Beyond the individual motivation to find health coverage, the individual market is confusing, just to find quality information abuot how to compare plans in a meaningful way. Many find they need to go to a broker to decipher the market.
From a practical perspective, these are the barriers that consumers face trying to get health coverage for themselves and their families. Coming soon: how do the proposed health solutions help remove or reduce these barriers?