3/24/98

Tips to Avoid Being Underinsured
Consumers Union Advice for Those Who Must Buy Their Own Health Coverage;

YONKERS, N.Y.--March 24, 1998--In the wake of a new congressional study that found the federal law designed to guarantee "portable" health insurance isn't working, Consumers Union, the publisher of Consumer Reports, issued guidelines to help consumers who have left group coverage and must shop for individual health insurance policies.

According to Gail Shearer, Director of Health Policy Analysis at Consumers Union's (CU) Washington office, "The Kassebaum-Kennedy promise of access to health insurance is an empty promise. For millions of Americans, there is no access, because health insurance is just too expensive." Shearer is the author of Hidden From View: The Growing Burden of Health Care Costs, a CU study that documents the health-care spending habits of Americans and concludes that many families do not have the financial security they expect from their health insurance policies. These families are considered underinsured, since they spend more than 10% of their income on health care.

Hidden From View presents this list of questions to help consumers avoid being underinsured when shopping for health insurance in the private market:

• Does the health plan limit your out-of-pocket costs (for covered charges) once you have spent a fixed amount (e.g., $2,500 for a family)? In other words, would the policy pay 100 percent of allowable costs after your deductible and coinsurance payments total $2,500?
  
• Does the policy provide comprehensive benefits including not only doctor and hospital care, but also prescription drugs?
  
• Is the insurance company's schedule of "allowablecharges" realistic in light of what local providers actually charge?
  
• Does the policy require that you pay 50 percent for mental health services, and have other potentially costly limits on mental health coverage?
  
• Does the policy limit lifetime benefits (for example to $1 million) that would end if you suffered a truly catastrophic accident or illness (e.g., severe head injury with paralysis)?

Consumers Union, the publisher of Consumer Reports, is 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.

Copies of the full report are available from the D.C. office of Consumers Union for $20.00 plus $5.00 shipping and handling.  Please make checks payable to "Consumers Union."