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 Category: AllReal InsuranceJune 8, 2007
The Los Angeles Times carried a story on Sunday about the struggles some consumers face with their high-deductible health insurance plans.
The Times reports on a couple that bought a policy with a $2,500 annual deductible and a $335 monthly premium. "We were just looking for something [with a premium] we could afford," Nancy Warrington said. "The high deductible didn't even dawn on me." ?The insurance was a mixed blessing,? the Times reports. ?Although it covered Nancy's appendicitis, Todd's back injury and an assortment of other medical needs over the years, the annual deductible also saddled the San Diego couple with more than $10,000 in debt.? Caveat emptor. The Warringtons made a decision to purchase insurance with premiums they could afford in order to have insurance protection for potential major medical bills that they likely couldn't afford. That's how real insurance works. Their policy no doubt protected them from tens of thousands of dollars in medical bills, but not from the deductible they agreed to. When people buy homeowner's and car insurance, they don't buy insurance that covers having their plumbing fixed or their oil changed because they know that would be too expensive. Instead, they pay for routine maintenance themselves, knowing they have insurance to protect them if they have a fire or a major accident. People with high-deductible insurance are making a similar trade off. Most people would rather have policies with low-deductibles and low co-payments, but few families can afford the $10,000 or more in annual premiums the insurance would cost. Those with high-deductible policies generally save money on lower premiums, but that means being prepared to pay some costs out of pocket. The last quote of the article captures why we have the problems we do in the health sector: The Times reports that a San Fernando woman ?had a dizzy spell [last year] but put off going to the emergency room partly out of financial concern, she said. It turned out to be nothing serious.? "Still," she said, "there should be no consideration of dollar figures when it comes to your health." Simply put, the attitude many people have regarding health care is: Someone else should pay. Can we have all of the medical care we could ever want for free, no strings attached? Single-payer advocates who write to me passionately believe that is the case. What's Latin for, ?There's no free lunch?? *********** The Health Policy Consensus Group has produced yet another important policy document, outlining policy steps for the best way to provide health insurance coverage for children and families. As Congress prepares to begin consideration of reauthorization of the State Children's Health Insurance Program, 37 health policy experts from the main market-oriented think tanks offer a brief summary of our larger vision of expanding access to health insurance through free-market reforms:
*********** Joel White, Galen Institute visiting senior fellow and head of JCWhite Consulting, is heading a new coalition -- Health IT Now! -- which is urging quick action on health information technology legislation. After many years in leadership roles on Capitol Hill, Joel knows how to get things done. He will be working with former Sen. John Breaux and former Rep. Nancy Johnson, co-sponsors of the coalition, and a prestigious list of patient, practitioner, and employer groups, including the National Association of Manufacturers. The group will work to promote existing legislation that meets its goals, including federal leadership on a private-public partnership to develop interoperability standards, product certification, and quality measures; creation of federal financial incentives for providers; consumer empowerment; and privacy. NAM president John Engler said health costs are ?our biggest struggle, no question. And the cure isn't aspirin, it's IT.? Go, Joel. *********** I traveled to Palm Coast, Florida, (and back) yesterday to give a speech to a conference of labor union executives and managers of public employee benefit programs who wanted to learn about health savings accounts. Even these groups that are very cautious and conservative find themselves pulled into the world of consumer-directed health care. Here is my PowerPoint presentation. I was very surprised to see the level of interest in the experience of other companies in experimenting with ways to engage employees in being better managers of health care resources. I used as one example the biggest labor union in Manitowoc County, WI, which has agreed to HSAs for its members. Employees pay no premiums, the county puts $3,000 a year into each employee's HSA and that fully covers the deductible. What employees don't spend, they keep. Thanks to the plan, Manitowoc County expects to save $1.1 million in 2008, and employees will save $685,000. Money talks. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
HEARING ON FDA'S ROLE IN EVALUATING SAFETY OF AVANDIA The controversy over the diabetes drug Avandia intensified this week during a hearing called by Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform. Food and Drug Administration Commissioner Andrew von Eschenbach said during the hearing that Avandia and a competing diabetes drug, Actos, must carry stiffer warnings for prescribing physicians about cardiovascular risk. Responses from the think tanks:
Mark McClellan, former commissioner of the Food and Drug Administration, recently testified before Congress on the issue of drug safety and the need to use modern information technologies to learn more about the effectiveness and safety of medications over their life cycle. The Vioxx withdrawal shows the imperative for change, said McClellan. We can no longer rely ?on the hope that overly busy health professionals will file individual reports on adverse events involving drugs,? he said. Instead, we need a systematic, electronic infrastructure to monitor the safety of drugs and ?extensive use of electronic, interoperable, real-time clinical data systems for active safety surveillance.? A more sophisticated reliance on electronic data could have detected the "significant association between Vioxx use and serious cardiovascular events? in months rather than years, said McClellan. U.S. INDEX OF HEALTH OWNERSHIP The Pacific Research Institute's John Graham has created a new ?U.S. Index of Health Insurance Ownership? to rank each of the 50 states on a new measure of health care freedom. Utah came out on top and New York state last in the degree to which their citizens are free to utilize health resources free from state overregulation. To rank health ownership among the states, Graham considered 24 factors, including the burdens of regulation and mandates, the degree of competition among providers, and innovation in public programs. PAPER KILLS: TRANSFORMING HEALTH AND HEALTHCARE WITH INFORMATION TECHNOLOGY The Center for Health Transformation ?guides the reader on a tour of the evolving health information technology and health policy landscape,? in a new book that covers topics ranging from protecting patient privacy to building health information exchanges and achieving interoperability. The book examines ?the role of state governments, health plans, and hospitals in implementing health information technology, as well as the potential of health IT to promote the adoption of best practices in ambulatory care and focus on prevention, wellness, and early detection.? Paper Kills was edited by CHT's David Merritt, includes an introduction by former House Speaker and CHT founder Newt Gingrich, and features contributions from leading thinkers in health care, including Brandon Savage of GE Healthcare, Ed Hammond of Duke University, and Michael Heekin, chair of the Governor's Health Information Infrastructure Advisory Board for the state of Florida. POLICY OPTIONS TO IMPROVE THE U.S. HEALTH CARE SYSTEM The National Restaurant Association has launched a new health care campaign that promotes ?market-based solutions over blanket government mandates.? The Better Care, Lower Costs, Fewer Mandates campaign recommends policies that ?expand accessibility to quality health care; improve affordability for both employees and employers; promote flexibility to meet the diverse needs of the industry's workforce; and enhance portability to help America's increasingly mobile workers take their health insurance with them from position to position.? The NRA describes the legislative and regulatory policies that would help the industry move away from ?a government-mandated, one-size-fits-all program.? Recommended policies include the creation of small business health plans, allowing cross-state purchasing of health insurance, offering refundable tax credits to help lower-income workers purchase health insurance, and equalizing the tax treatment of health insurance. The NRA has also published a booklet that describes the experiences of some NRA member companies with these programs. A survey released by the National Federation of Independent Business finds that many small-business owners lack knowledge about health savings accounts and are unaware of the plans' benefits. The survey indicates that small businesses need more ?education and information on HSAs from their insurance brokers and agents?while some businesses have reduced costs more than 40 percent by using the accounts versus traditional plans, the level of understanding goes up consistently with a firm's number of employees.? CONTAINING COSTS OR RESTRAINING HEALTH CARE? Jacob Arfwedson of the Brussels-based Centre for the New Europe and Peter Pitts of the Center for Medicine in the Public Interest examine four cost-containment mechanisms commonly used to restrain health spending: Health Technology Assessments, Rational Use of Medicine, Evidence-Based Medicine, and Relative Effectiveness. All four policies ?are population-based, have rigid exclusion criteria and can't integrate new information or innovations," write the authors. EBM, for example, has been distorted by health administrators ?that impose top-down, one-size-fits-all restrictions on patients and their doctors.? The authors conclude that these policies should give way to patient-centric and cost-efficient 21st century evidence-based medicine that promotes innovation and quality. UPCOMING EVENTS: Medicaid Financing: Challenges for Missouri and the Nation Quality Care and Comfort at the End of Life: Changes Needed? What Should Congress Do about Generic or Follow-On Biologic Drugs? The Second National Medicaid Congress: Strategies for Navigating the New Medicaid Innovations in Consumer Driven Healthcare Plan Designs 5th Annual Health Care Conference 12th Annual Wall Street Comes to Washington Conference Who Killed HealthCare? America's $2 Trillion Medical Problem-and the Consumer-Driven Cure Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors. CommentsNo comments Add Comment |
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