It was recently announced that the number of Americans
who have no health insurance rose to 47 million, or nearly 16 percent
of the population, from 44.8 million. But even people who have coverage through their employers are
struggling with health care costs.
Insurance, Not Assurance
According to a new study by Consumer Reports, 4 in 10 Americans
can't depend on their health insurance.
"Of the people who had health insurance, some told us they
postponed getting tests or treatment, going to doctor, or filling
prescriptions because they couldn't afford it," says Consumer
Reports senior editor Nancy Metcalf, the report's author. "They
could not pay for their share of their health care over and above
what insurance covered." Respondents said they raided retirement accounts, borrowed from
friends and family, or ran up credit cards to pay medical bills.
Three percent of insured respondents said medical bills forced them
to declare bankruptcy.
Coverage Uncovered
The Consumer Reports National Research Center surveyed 3,000
Americans between age 18 and 64. Its results mirrored the U.S.
Census findings: 16 percent had no health plan at all.
Between 2001 and 2005, the number of middle-income families --
those earning $40,000 to $80,000 for a family of four -- who received
health insurance through their employers declined by 4 percentage
points.
Half of those were because the employer stopped offering coverage
altogether, or offering dependent coverage; 15 percent gave it up
because they could no longer afford the premiums.
Slow to Change
The United States spends $2 billion a year on health care, more
than any other country. But efforts to slow the growth in health care
costs have failed for a number of reasons, Metcalf explains.
"People have been conditioned to believe that insurance companies
are making tons of money by denying care," says Metcalf. "That was
something they tried to do back in the '90s -- make people go
through their primary care doctor, make sure the care they
authorized was necessary.
"But our entire culture of health care rebelled against it," she
adds. "Doctors hated being second-guessed, patients felt they were
being jerked around; hospitals and specialists formed alliances and
maneuvered themselves into much stronger bargaining positions."
A Wage-Care Gap
Meanwhile, employers heard loud and clear from workers, who
demanded more choice. "What you see now is that a majority of employees are
in PPOs [preferred provider organizations], which are much more
permissive kinds of health plans where you have a large choice of
doctors and you don't need permission to see a specialist," says
Metcalf.
"The truth is that during that window when HMOs [health maintenance
organizations] were really strictly managing care, health care
costs slowed. Once the brakes came off, health care costs started running
at two to three times inflation. It's not a sustainable thing when
wages aren't going up."
The average family health care plan costs an employer about $12,000
annually, the report found. To maintain the same level of benefits,
companies are either keeping wages stagnant or asking employees to
pay more medical costs -- in higher premium shares or higher co-
pays and deductibles.
For example, between 2000 and 2006, the percentage of workers with
single PPO coverage who had a deductible of more than $500 rose to
38 percent from 14 percent. Last year, one in five employees
enrolled in HMOs and PPOs had plans that set no upper limit on the
amount of co-pays and deductibles they might have to pay in a year,
according to a survey by the Kaiser Family Foundation.
Open Questions
With open enrollment scheduled for October at many companies,
employees may be considering switching plans to save money. But do
an analysis that goes beyond the cost of the monthly premium.
"Experts told us over and over to think of health care the way you
think of homeowners insurance," says Metcalf. "Don't evaluate your
coverage on the basis of how it works when you're healthy; evaluate
what it will do when someone gets unexpectedly ill."
Most employers provide a summary plan description. Here are a few
items to look for before you choose:
Calculate the worst-case scenario for hospitalization.
This is the most expensive medical liability. What's the maximum
out- of-pocket cost per family member on an annual basis if an event
like an auto accident results in a long hospital stay?
Is prescription drug coverage included in the maximum amount
payable every year?
"It's the catastrophic illnesses -- cancer in particular -- that
can blindside people," says Metcalf. "Prescription drugs to treat
lymphoma can run $25,000 a year."
What's the coverage for outpatient therapies?
This includes tests, physical therapy, home health care, and mental
health treatment. Also be sure to check if the plan covers "durable
medical equipment." This is a must when oxygen equipment is needed
at home for a child who has asthma, say, or for other equipment
such as a wheelchair.
If you're choosing among several plans, check online to see if
your state department of insurance has received complaints about
them.
Considering all of these questions, a discount benefit plan, or Consumer Driven Health Care, may be a better way to go. There are many such companies providing discount plans, just apply these same questions to any plan you consider joining.
Sharrie Rose, www.affordyourdental.com
