The number of these "underinsured" people rose by more than 50 percent from 16 million in 2003, according to the study by the New York-based Commonwealth Fund, a nonpartisan health research center. Half of those defined as underinsured go without care when they're sick, compared with 68 percent of those who have no coverage.
Paying 10 percent out-of-pocket for medical expenses was chosen as a definition of the "underinsured" because it's the standard most frequently used in studies on the topic, the researchers said.
"They also look very much like the uninsured in what they don't do, like not filling prescriptions and not getting recommended follow-up care," said Cathy Schoen, senior vice president at Commonwealth Fund, in a telephone interview.
Insurers are increasing co-payments for patients and prescriptions and trimming benefits to hold down the cost of premiums, the fund said. Even insured families of four earning $85,000 a year face economic difficulties because of their health plans' limited coverage, the study said.
"These aren't just people going into medical debt," Schoen said. "They are using their savings, they're taking out second mortgages, they're going into credit-card debt for these bills."
Overall, 5.7 percent of spending by Americans went to health care in 2005, the most recent year reported by the U.S. Bureau of Labor Statistics. That compares with 32.7 percent for housing, 18 percent for transportation and 12.8 percent for food.
The underinsured were more likely than those with "adequate" coverage to be in health plans that limited the annual number of doctor visits, didn't provide dental or prescription drug benefits and set a maximum annual coverage limit for care, the Commonwealth Fund researchers said.
For 20 percent of the underinsured, premiums alone account for 10 percent or more of the family's income. More than half work for firms with more than 500 employees, the report said.
Almost half of the underinsured, 45 percent, reported being contacted by collection agencies or changing their way of life to pay medical bills, the study found. The data was gathered from a survey by the Commonwealth Fund of 3,501 adults conducted from June 6 through Oct. 24, 2007. The data from 2003 came from a previous survey by the fund.
"There's this whole gray area of people who have health insurance but potentially face bankruptcy if they get sick," Schoen said.
Policymakers should consider the adequacy of coverage when talking about extending insurance to everyone, she added.
The U.S. has about 47 million uninsured. Sen. Barack Obama of Illinois, the presumptive Democratic presidential candidate, and Sen. John McCain of Arizona, his Republican rival, have said they would take steps to get insurance coverage for everyone.
"Affordability isn't the only thing, but also the contents of the insurance," Schoen said.
Blue Cross/BlueShield ranks 1st in satisfaction
Blue Cross and Blue Shield of Florida Inc. has the best member satisfaction rating in Florida, according to J.D. Power and Associates.
The Jacksonville-based insurance firm earned a score of 751 out of a possible 1,000 points in J.D. Power's 2008 National Health Insurance Plan Study. The average score for insurance companies in Florida was 733.
The study was based on responses from members about their overall experience with seven key elements of their health plan, including coverage and benefits, provider choice, information and communication, approval process, claims processing, explanation of benefits statements and customer service.
The study ranked coverage and benefits, provider choice and information and communication as the three most important elements.
Founded in 1944, Blue Cross and Blue Shield of Florida Inc. is nonprofit policyholder-owned, mutual company. The company is headquartered in Jacksonville and is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield companies.
Kaiser Daily Health Policy Report
The Arizona Republic on Friday examined how the practice of health insurers rescinding and canceling the health care policies of beneficiaries has been "scrutinized from California to Connecticut with some states passing tough measures or pursuing regulatory actions and assessing fines to restrict these retroactive health policy voids."
According to the Republic, rescissions have been "generating many complaints to government regulators and some lawsuits claiming insurers have improperly dropped coverage." Policyholders and lawyers contend that the rescissions often occur after a policyholder is diagnosed with a costly life-threatening illness, such as cancer. However, insurers maintain that the practice is needed to prevent applicants from intentionally withholding pertinent medical history or other information to receive coverage. Insurers also maintain that the practice helps maintain and reduce costs for all beneficiaries.
State Efforts
Health Net is among the companies that have faced scrutiny over rescissions, according to the Republic. The lawsuits against the insurer are pending in California and Arizona, where lawmakers have been urging more stringent policies to address the issue. California's Department of Managed Health Care launched an investigation into Health Net and Kaiser Permanent that resulted in reinstatement of coverage to 1,000 former policyholders. After the settlement, Health Net announced that it would seek approval from a third party before canceling a policy.
New Mexico Gov. Bill Richardson (D) recently signed into law a bill that raises the burden of proof for insurers to prove fraud in policy cancellations. Arizona officials contend that the practice is not prevalent enough to create legislation.
Mohit Ghose, a spokesperson for America's Health Insurance Plans, said, "It is very clear to our members that rescissions are not necessarily the way to go. We want to make sure people are covered," adding, "You also have to have mechanisms in place to prevent fraud." The industry has made its own recommendations for improvement, according to the Republic (Alltucker, Arizona Republic, 5/30).
Sick and deserted
The Arizona Republic
Jun. 6, 2008 12:00 AM
That is because when you or your family need it most it is . . . gone?
Wait. That can't be right. How can health insurance disappear after you buy it?
It is called rescission, and it means an insurance company can retroactively eliminate your coverage. It can happen after a policy has been issued, treatment approved and doctors have been paid. It can mean those payments to doctors, labs and other providers have to be repaid by the person who thought he or she had coverage.
Ostensibly, rescission is intended to protect insurers from people who lie about their health to get coverage. By guarding against fraud, the logic goes, insurance companies can keep costs down for people who don't cheat. That's fair enough.
But stories are mounting about policies being rescinded so insurers can dump people after they are diagnosed with expensive health problems.
California and New Mexico are aggressively moving against this problem.
In Arizona, we lack data to review what's going on, let alone reveal abuses. The Republic's Ken Alltucker reported that Arizona law does not require insurance companies to report the number of policies they rescind in Arizona.
"That's what jumped out at us," said Jeanine L'Ecuyer, spokeswoman for Gov. Janet Napolitano.
L'Ecuyer told The Republic's Editorial Board the governor is directing the Arizona Department of Insurance to take a close look at what California and New Mexico are doing and report back within 60 days on whether Arizona needs to pursue action, as well.
That's a sound approach.
There is anecdotal evidence that raises real concerns and warrants further study.
At least three lawsuits have been filed in Arizona claiming that two insurance companies dropped clients who were in need of extensive medical treatment.
Two of those Arizona cases were against Health Net. In February, a California arbitration judge ordered Health Net to pay $9 million for ending a woman's policy while she was receiving chemotherapy for breast cancer. Health Net said the woman gave the wrong weight on her insurance application and failed to report that she had a heart condition.
Internal company documents made public during the arbitration hearing showed that Health Net paid bonuses to employees who met quotas for canceling policies.
Citing what he called "egregious" actions, California Judge Sam Cianchetti wrote in his ruling that "Health Net was primarily concerned with and considered its own financial interests and gave little, if any, consideration and concern for the interest of the insured."
Health Net has since said it will not rescind policies without a third-party review, but insurance rescission by insurance companies remains the target of concerns of state regulators and elected officials in California.
New Mexico recently passed a bill that requires an insurance company to show a consumer has been "willfully fraudulent" before a policy can be rescinded.
That is an improvement over allowing insurers to rescind on the basis of an innocent oversight or mistake on an application. But defining "willfully" may simply lead to more court battles.
Arizona will need to consider that and a great many other important questions as it begins to investigate insurance rescissions.
For example, it is unclear whether all policyholders are fully informed of the consequences of misrepresenting their health history on an insurance application. What's more, some companies, such as Blue Cross Blue Shield, try to work with policyholders to correct problems before rescinding a policy.
What is clear is that people who purchase insurance in good faith should not lose it when they are most in need of the protection it offers.
Employers need to better understand the terms being used in many of the healthcare-reform proposals, as different groups may use the same term, while having different meanings in mind. Health reform may be a make-or-break issue for some companies.
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Employers will be part of paying for healthcare no matter what public policy is in place.
Should the government role be greatly expanded to match other nations, employers would either pay higher taxes or pay higher wages -- so that their workers could pay higher taxes (or premiums), or some of both.
Should the current mixed approach continue, then employers will continue to pay in the many ways they now do.
This reality of "we shall pay no matter what" has clearly had an effect on the attitudes of employers.
Most employers and employer groups (that are made up of employers that provide health insurance) now share a common desire for a level "access" field, a level "paying" field, and a level "tax subsidy" field.
The definitions of these commonly used words leave a great deal of room for disagreement, however.
All share the desire for universal "access to quality care and protection against catastrophic cost" and favor "a government safety net for the neediest." Most share opposition to employer mandates and to "pay or play." Most also share opposition to individual mandates, although, notably, the National Business Group on Health has endorsed an individual mandate.
The 1992 presidential campaign highlighted this difference between universal coverage (favored by then-Gov. Michael Dukakis) and universal access (favored by then-Vice President George H.W. Bush). That same divide is present when one compares the healthcare positions of Sen. Barack Obama of Illinois and Sen. John McCain of Arizona.
Employer and employer-group position statements frequently stress the use of the word universal without clarity on whether they mean coverage or access.
Employers have a near total desire for health insurance and healthcare to continue to be "private," regardless of who pays. Experience with Medicare and Medicaid has reinforced views that government stifles innovation, on the one hand, while also reinforcing belief that government can move the private system in the right direction by requiring and funding research, technology, health records, etc.
Employers universally call for healthcare to be made more affordable, but while employers -- and candidates of both parties -- endorse a long list of common items aimed at increasing quality and adjusting cost, none favor denial of nearly unlimited choice, if one is willing to pay.
Cost projections of the long list of proposed reforms have been done by both public and private analysts, and all agree that, after years of implementation, such changes could at least slow the rate of growth in health spending.
Key is the fact that they only slow the pace. None project moving the rate of health inflation below the rate of general inflation.
Employers, individuals and the government are in agreement that "explicit healthcare rationing" is neither desirable nor acceptable.
Employers share the desire for more "portability" of insurance for individuals. Again, however, descriptions of what is meant by "portability" vary significantly. And, employers want a system that allows for "competition," but proposals offer conflicting definitions.
My most recent columns highlighted the health proposals of presidential candidates and a bi-partisan group of 14 Senators. Those columns underline that many of the concepts in those proposals match what employers favor at the level of words (e.g., portability), but then take very different approaches, as do various employer proposals.
Such approaches all serve to underline why reaching a national consensus for what "health reform" should entail will be a great challenge regardless of election outcomes. The Senate Finance Committee has begun a series of health-reform hearings and will meet for a " committee health reform summit " on June 16th to move the process forward.
Employers will find the process that lies ahead frustrating -- as is every "dance of legislation" -- but it is critical to their future healthcare costs.
There will be many tipping points in the process, and if legislation is enacted, history tells us that there could be another "Medicare catastrophic" or "Section 89" provision that proves so unpopular that repeal comes ahead of effective dates.
Employers will want to monitor the process closely, so that they are in position to take a strong stand should conditions merit it. After all, we are talking about something that is inflating at twice the rate of the economy, now absorbs nearly 17 percent of the economy and is its own engine of growth.
Health reform could make or break many employers.
