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FOR IMMEDIATE RELEASE |
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COST-SHIFTING IN EMPLOYER-SPONSORED HEALTH PLANS MAY LEAVE MILLIONS UNDERINSURED
OR PAYING MORE FOR COVERAGE
YONKERS, NY - Millions of Americans who get health insurance through their employer
may be hit by high co-payments when they can least afford them. Employers are
shifting more responsibility for health-care decisions to employees, according
to "The unraveling of health insurance" in the July issue of Consumer
Reports® (CR) magazine. This report is posted in the free Consumer Advice
area at www.ConsumerReports.org.
Emerging strategies, designed to drive down costs for insurers and save money
for employers, are resulting in higher co-payments and deductibles for consumers.
Consumers should be wary of the personal health account, a new type of policy
recently endorsed by President Bush, that may leave employees significantly
underinsured when they are injured or sick.
"Health-insurance plans are changing, and people are paying more out of
their own pockets for their health care," says Trudy Lieberman, Director
of the Center for Consumer Health Choices at Consumers Union, and author of
this report. "This is a long-term trend that does not look good for consumers."
For consumers who have insurance through their employer, this report explains
the new cost burdens coming their way, and how they might select among the new
health-care-coverage options. It provides a road map to complex laws designed
to protect health coverage for those leaving or losing their job, including
the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance
Portability and Accountability Act (HIPAA). CR includes recommendations and
steps consumers should take to protect themselves.
Some of the 75 percent of all U.S. adults under age 65 who get their health
insurance through the workplace are already feeling the pinch of rising costs.
Consumers insured through their employers may think they have almost complete
coverage for medical expenses, but the effect of increasing co-payments and
deductibles doesn't become apparent until they become sick or disabled. Thirteen
percent of insured consumers did not fill a prescription in the previous year
because of cost, and 17 percent were unable to pay their medical bills, according
to a national survey of people ages 19 to 64 conducted by The Commonwealth Fund,
a New York-based philanthropy.
For employers, health insurance premiums are rising steeply because of increased
costs for hospital services and for prescription drugs. The theory behind the
employer trend to shift responsibility for health-care decisions is: If employees
must decide how and when to spend their limited health-care dollars, they will
use doctors, hospitals and medicines more judiciously, thus driving down costs.
One problem with this theory is that employees will most often be making these
decisions when they are sick. Whether they are qualified to do so, and whether
they should do so, are medical and social questions that health-care experts
and consumer advocates are only starting to confront.
The three major emerging strategies are:
Make the employee pay more for health care, sometimes a lot more, through
higher co-payments and deductibles.
Personal health accounts: Each year, employers deposit money in an account
in the employee's name that can be spent only for health care.
Disease-management programs, which focus on improving people's health.
Of the three strategies, the disease management programs cause the least economic
pain for employees.
Consumers Union, the non-profit publisher of Consumer Reports, believes that
personal health accounts will undermine the adequacy of health coverage in the
U.S. Given the high current costs of COBRA policies, Consumers Union also believes
Congress should subsidize health insurance for workers displaced by the recession.
With no viable solutions in sight, consumers should take some steps to protect
themselves:
Prepare for the future: It's wise to budget for health-care expenses
even if you think you have good insurance.
Don't be tempted to "go bare: Opting out of health insurance at work may
save you money in the short term, but it can prove disastrous later on.
Be wary of personal health accounts: Are you sure you'd be willing to promptly
spend from your account for needed care, or would you be tempted to build the
account and perhaps neglect your health?
If you are offered a disease-management program, and the services seem
likely to improve the quality of your medical care and teach you better self-management,
it could be a good bet.
To arrange an interview with Trudy Lieberman, call Joan Eve Tripi at 914-378-2436
or Jennifer Shecter at 914-378-2402.
Support for this research was provided by The Commonwealth Fund. The views presented here are those of the authors and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.
The July 2002 issue of CR will be available June 18 wherever magazines are sold. To subscribe, call 1-800-765-1845.
- 30 -
JULY 2002
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above is intended for legitimate news entities only; it may not be used for
commercial or promotional purposes. Consumer Reports® is published by Consumers
Union, an independent, nonprofit testing and information-gathering organization,
serving only the consumer. We are a comprehensive source of unbiased advice
about products and services, personal finance, health, nutrition, and other
consumer concerns. Since 1936, our mission has been to test products, inform
the public, and protect consumers.
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