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New data on debt shows need for action...

Monday, August 31, 2009
With new data being published about health coverage and medical debt, it's clear we need state and federal action to prevent Californians from falling into uninsurance and underinsurance.

More than 2.2 million California adults report having medical debt, and two-thirds of those incurred the debt while insured, according to the authors of "The State of Health Insurance in California (SHIC)" a comprehensive new report from the UCLA Center for Health Policy Research.

Here's a report by Victoria Colliver at the San Francisco Chronicle, and here's some key findings from UCLA:

In total, nearly one in seven non-elderly adults in California (13 percent) have some kind of medical debt...

In addition, Californians with medical debt were much more likely than those without debt to delay getting the care they needed. Those with debt were twice as likely to report delays in care: 32.3 percent reported delays in getting needed care, compared with 16.1 percent of those without medical debt...

Also, medical debt can lead to loans and bankruptcy: Among those with medical debt, more than half (55.4 percent) reported financial consequences ranging from an inability to pay for basic necessities to credit card debt to a declaration of bankruptcy.

The study shows that Californians are appropriately concerned about the cost of getting needed care--even when they have coverage. We need action on health reform so we are not at such high risk of losing coverage, and to ensure that such coverage is comprehensive. When people pay a premium, they shouldn't then be saddled with debt for simply getting the care they need.

Here's two pieces of legislation to address the issues, both state and federal, and specific and comprehensive:

* AB786(Jones) would better label insurance products and ensure that all health insurance plans had a cap on out-of-pocket costs, so no plan left premium-paying patients with unlimited financial risk. The bill was approved by the Senate Appropriations Committee last week and is scheduled to be voted on by the full Senate next week.

* H.R. 3200, the comprehensive health reform package in the U.S. House of Representatives, would not only secure, stabilize, and expand health coverage for nearly all Americans, but it would also cap out-of-pocket costs. It would set minimum benefit standards and abolish "caps" on benefits that leave insured people with significant medical bills. The bill has passed the three committees of jurisdiction and is expected to get a vote on the House floor in September.

Another reason to work for health reform...

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posted by Anthony Wright | Permalink | 3:38 PM


Online help dealing with hospital bills...

Wednesday, August 12, 2009
With California's large and growing uninsured & underinsured population, we at Health Access are really pleased to unveil a new website--http://www.HospitalBillHelp.org--to help California patients know their consumer rights and financial options to deal with the biggest bill they get in their entire life. Here's the release that announces the new resource:

New Consumer Protection Website
Informs Consumers against Underinsurance and Overcharging
By Hospitals and Health Providers

HospitalBillHelp.org provides help for growing number of uninsured and underinsured in CA;
informs consumers about their rights and financial options, including under new, first-in-nation fair pricing law

On Wednesday August 12th leading consumer protection groups in California announced the launch of HospitalBillHelp.org, a new consumer information website that helps patients deal with hospital and other medical bills, including inflated charges, “junk” insurance, and aggressive collections practices. The new site is part of a collaborative effort called the California Health Initiative on Overcharging and Underinsurance (IOU), led by Health Access and including Consumers Union, Western Center on Law and Poverty, ACORN, CALPIRG, Congress of California Seniors, and other consumer and community groups.

Visitors to HospitalBillHelp.org will find many resources informing them about their consumer rights and financial options in dealing with hospital, including under California’s first-in-the-nation Hospital Fair Pricing Act, a 2006 law authored by Assemblywoman Wilma Chan and sponsored by Health Access California, which limits the common practice of charging uninsured and underinsured patients more for care than everybody else pays.

Typically, hospitals and doctors overcharge self-pay patients three to four times what insurance companies and government programs pay for exactly the same procedures. The Hospital Fair Pricing Act, effective since January 2007, limits the amount that most uninsured and underinsured patients have to pay to the amount that a public insurer would pay for the same care. In most cases, this will be the Medicare price, which is 65-85% less than the inflated price. The Hospital Fair Pricing Act also requires hospitals to adequately inform patients about their charity care and discount policies.

However, despite clear rules outlined in the Hospital Fair Pricing Act, many California hospitals are still failing to inform uninsured and underinsured patients about their right to a fair price.

"In our current health system, self-pay patients lack bargaining power, and are asked to pay more than anybody else for needed care. HospitalBillHelp.org is a new and unique one-stop shop for the nearly 10 million Californians who are either uninsured or underinsured. HospitalBillHelp.org lets Californians know what their consumer rights and financial options are, so that individual patients get what insurers already get: a fair price for hospital care, " said Anthony Wright, Executive Director of Health Access. "If you have a large hospital bill and need help paying it, or if you need hospital care and can't afford it, this website can help you."

Medical debt is a growing problem for low- and middle-income consumers, especially those who are self employed or between jobs. Some go without health coverage and others purchase “junk” or “catastrophic” insurance plans with extreme gaps in coverage. Both scenarios put consumers at tremendous risk of overwhelming medical debt or delay receiving treatment when needed.

The case of Laura Burwell of Chico, CA is demonstrative of the way in which deceptive “junk” insurance policies and the failure of hospitals to inform patients of their options can have traumatic consequences. Laura thought she was buying comprehensive coverage when she purchased health insurance with a $281 monthly premium, a $500 deductible and $50,000 in hospital coverage. She didn't realize that her hospital coverage was capped at $3,000 a day, until a rattlesnake bite landed her in the Intensive Care Unit and with a $73,000 hospital bill.

"There I was thinking I was covered for $50,000," Burwell said, “but my insurance only paid $3,000 and then I was responsible for the rest.”

Fortunately for Laura, she was protected by California ’s Hospital Fair Pricing Act, which prohibits hospitals from charging underinsured and uninsured patients more than Medicare would pay for the same care. In her case, that meant her final bill was reduced to $7,300, one-tenth the original bill. Laura hopes HospitalBillHelp.org will help other consumers faced with high hospital bills.

"The hospital never told me I was entitled to a discount. I had to do a lot of research on my own before I even found out about the Fair Pricing Act. This new website is going to make it a lot easier for Californians to get a fair price for hospital care,” she said.

The site also provides a wide variety of tools, features, resources and information to help consumers better understand their legal rights and financial options, including links to public health insurance options and applications, information on how to get discounted health care and even an Underinsurance Calculator to figure out whether you count as underinsured under any of the definitions commonly used.

“In May 2009, Consumer Reports published an article describing seven signs that a health insurance plan might be ‘junk’ insurance. Consumers can use HospitalBillHelp.org and use the site’s resources to discover loopholes in their own insurance plans, or as a helpful guide when purchasing new plans,” said Laurie Sobel, senior attorney with Consumers Union. “The site provides important information to help consumers make informed decisions when purchasing health insurance and steps to take to ensure that hospitals recognize their rights as stipulated under California ’s fair pricing law.”

When visiting HospitalBillHelp.org consumers can also research ways to get a discount on an existing bill, who to call for help and instructions on what to do when a hospital doesn’t follow the law. Furthermore, the site features a directory to help patients locate the closest and most affordable hospitals where they may be eligible for discounted care, regardless of their income.

"Western Center has long advocated for the needs of low-income uninsured people who are saddled with unaffordable hospital bills,” said Jen Flory, attorney with the Western Center on Law & Poverty. “We're pleased to have a website that breaks down into plain English the complex programs that are available to help and provide information to those who might qualify."

Other useful resources available on the site include information and steps on troubleshooting other common hospital and insurance billing problems, such as getting an independent medical review if an insurance company denies an individual coverage, and finding information on the prohibition against balance billing of HMO patients for out of network Emergency Room visits.

While the site serves as an important resource for consumers, including providing steps and information on how Californians can take advantage of our state's strong consumer protection laws, the major problems in our health care system require broad federal health reform, like that proposed in H.R.3200, and further steps to ensure that self-paying patients and consumers are sufficiently protected against overcharging by health providers, like AB1503(Lieu), and inadequate private health insurance policies, like AB786(Jones).

"Whether it is overcharging, underinsurance, or care that is just plain unaffordable, the need for health reform is urgent. This website helps inform consumers about their rights and options, but they are limited. If anything, our work on HospitalBillHelp.org only reaffirmed our urgency for comprehensive health reform, like that which President Obama has proposed." said Anthony Wright of Health Access California. "And California can continue to take the lead with specific reforms pending in the state legislature, by passing AB1503(Lieu) to prevent overcharging by emergency room doctors, and AB786(Jones) to prevent people being trapped in plans that leave them with unlimited financial risk."

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posted by Anthony Wright | Permalink | 1:50 PM


Bitten by a snake (not COBRA)...

Monday, August 10, 2009
The Sacramento Bee had front-page coverage, by reporter Bobby Caina Calvan, of a specific angle on health reform, and the need for coverage to have some cap on out-of-pocket expenses. Otherwise, the patient who has been paying premiums is still faced with unlimited financial risk and burden.

The major federal health reform bills, like H.R.3200, all require coverage to have a maximum out-of-pocket limit, up to $10,000. At the state level, Health Access California is sponsoring AB786(Jones), which would also require a cap, in addition to labelling insurance plans so people can better comparison shop.

Why is this necessary? Because there are some dubious plans being sold right now:

Burwell was weeding her backyard vineyard last summer when she was bit by a rattlesnake. She rushed to a Chico hospital for antivenin and morphine, which eased the pain during an overnight stay.

Then came the unexpected sting of a $73,000 hospital bill – and shock upon learning her health insurance would cover a mere $3,000.

"It was one of the longest, most stressful periods in my life," said Burwell, a self-employed wine shop owner whose financial security was shattered by the snake bite.

"I'm probably a typical insurance purchaser," said Burwell, who had to scramble to find a solution for the steep bill. "I believed what I was told by the person selling it to me...."

Burwell, 60, thought she was getting a deal four years ago when her COBRA coverage ran out and she found a low-cost, low-deductible plan. She bought a policy from a friend – an insurance broker who, she said, was looking out for her.

Burwell's policy was underwritten by a Texas-based firm that initially charged her a $281 monthly premium. She had a $500 deductible and was promised $50,000 in hospital coverage. She didn't realize the hospitalization coverage
was capped at $3,000 a day.

The story is worth the read. In addition to AB786(Jones), it's good that the health reform bills in Congress answer the challenge of the article's title, "Don't forget us, underinsured say."

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posted by Anthony Wright | Permalink | 10:02 PM


Insurance for Insurance

Wednesday, December 03, 2008
So UnitedHealth is going to start offering coverage that will ensure you can get coverage. Doesn't it sound like a bizarre movie plot?

So basically, if you pass a health test, and anticipate that you might have a pre-existing condition issue later that may prevent you from getting coverage, and may need itinerant coverage on the individual market, you get coverage to ensure you can get coverage.

There has got to be a simpler way: it's called Guaranteed Issue.

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posted by Hanh Kim Quach | Permalink | 11:26 AM


'Tis the Season

Wednesday, November 19, 2008
It's open enrollment!

You know, that one month in the year when you get to swap out the health plan you may have wrongly chosen last year before you knew better?

Sadly, for many workers, the choices are shrinking. As reported in this NYT story a couple days ago a growing number of companies are offering *only* high deductible health plans....take it - or leav it. And that includes big companies, like Nissan and Delta Airlines.

The reason: skyrocketing premiums, and the underlying fast pace of health care inflation is making health coverage unaffordable for businesses to offer as well, according to this WSJ article. So businesses are trying to tamp down their costs by passing it along to their workers.

Some workers may find themselves *completely* without the option of health insurance. In that case, they're at the mercy of the individual insurance market. If they're not turned down for "pre-existing conditions'' like earaches, or something, then workers may be able to find coverage. But there, the average monthly premium for an individual was $158 with a deductible of $1,972, according to a study of 227,000 policies purchased through www.ehealthinsurance.com. For families, the figure is worse -- $366 for a $2,610 deductible.

Happy holidays?

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posted by Hanh Kim Quach | Permalink | 11:59 AM


The Promised Land if you're Chronically Ill

Tuesday, November 18, 2008
The Netherlands!

According to the latest Health Affairs web issue, a Commonwealth Fund study of seven industrialized nations reveals -- once again -- that the US is dead last when it comes to quality and cost, particularly as it relates to caring for people with chronic conditions: diabetes, heart disease, arthritis, depression, etc.

The US spends the most ($7k per capita versus about $3k), and in spite of that more than half (54%) of patients end up skipping drugs, doctors visits, etc. because it's too darned expensive. Patients in the US are least likely to have a regular doctor, among the least able to see a doctor the same day when sick, and more likely to report that recommended treatments were unhelpful or that medical care was poorly organized.

Meanwhile, other countries, like the Netherlands, Canada, the UK or France, place strong emphasis on medical homes and chronic disease maintenance and don't require any co-pays, co-insurance for the maintenance of these conditions. In Germany, coinsurance is limited to 1% to 2% of income.

While there's quicker access to specialists in the US, the same can be said of the Netherlands, where requests to see a specialist are usually met in fewer than four weeks.

Here's a NY Times editorial on it.

In the meantime, diabetes cost the US $217.5 billion in 2007, according to the National Diabetes Economic Barometer study, by the Lewin Group. Perhaps other models worth a view.

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posted by Hanh Kim Quach | Permalink | 1:34 PM


A glimpse into the future

Monday, November 17, 2008
This LA Times story about the call to overhaul 401 (k) plans piqued my interest this weekend. It was nearly 30 years ago that businesses began the migration from defined benefit pensions to defined contribution 401 (k) plans, with the idea that workers should manage their retirement. Now, as a generation prepares to retire, relying largely on 401 (k)s, we're learning a couple things -- 1) that this recent monkey business with the stock market is really a disaster for those close to retirement and that's totally unfair, and 2) that people are consumed with life and can't be stock porfolio managers and properly manage their accounts. Here's a telling statement:
.. even Nobel Prize-winning economists have admitted that they don't closely monitor their 401(k) statements -- allowing an initially well-balanced portfolio to become dangerously overexposed to stocks as those investments grow faster than bonds.

So, the reason I call attention to this: the trend in health insurance has long been heading in the direction of 401 (k)s. Marketers alluringly suggest that people need to "take control'' of their health care management and they know "what's best'' for themselves. And voila, we have "consumer-directed health care.''

It all sounds very frontier-ish and exciting and no-nonsensey and take-the-bull-by-the-hornsy. That is, until you have to start calling the insurance company to see if your mammogram is covered, or prenatal care, or orthotics -- then you realize just how very, very small and very, very insignificant -- and very, very alone you are navigating phone trees and call centers in India. And all you really want to know is if you should really worry about that lump in your breast.

Anyway, now, there is serious clamoring for a re-look at the 401 (k). The cows are already out of the barn on that one. We know what happened. We're starting to see the consequences of underinsurance now... So let's not let the same thing happen to health care.

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posted by Hanh Kim Quach | Permalink | 2:35 PM


Flying without a parachute

Wednesday, October 29, 2008
The San Jose City Council will soon consider a "living wage'' that would increase wages for airport workers. For those with health benefits, the wage would be $12.83 an hour. For those without benefits, the wage would be $14.03 an hour.

The difference, then, between having benefits and going without is $1.20 an hour. Over the course of a year, that's an extra $2,400 in your pocket, assuming employees work 2,000 hours. That's $200 extra dollars a month. But that also means that a worker would have to go out and find insurance on their own.

Airport workers, the ones that push wheelchairs and check baggage, are not young. In a Google search, I find that in Dallas, the average age of an airport worker is 45, so I'm going to use that for my illustration.

It is possible to find an individual health insurance plan for a 45-year-old woman in San Jose for less than $200 a month. However, it also means
  • paying deductibles ranging from $500 to $5,000;
  • paying high co-pays for limited doctor's visits (and for a 45-year-old with a physically taxing job, that may not be a wise choice. Not to mention the regular health needs of a 45-year-old woman.);
  • having *only* generic prescription drug coverage;
  • paying the full cost of labs and X-rays until the deductible is met;
These are bills that make your stomach ache. They're not fun to pay, but you need to pay them because you need to stay healthy. And for a person earning about $28,060 a year, these costs represent, proportionally, an even bigger financial sacrifice. The premium alone is 9.5 percent of wages.

Of course, the big question, is whether a person $28,060 can really afford -- with housing, food and gas expenses -- to spend another $200 a month on a skimpy health care plan.

The answer, most likely, is no.

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posted by Hanh Kim Quach | Permalink | 8:55 AM



Monday, October 27, 2008
The Sacramento Bee this weekend told the very real story of counties stepping in to provide medical care when people find themselves without health insurance.

What struck me is the very palpable sense of vulnerability -- that at any moment, you or someone you know could become uninsured and wait in this line. That at any moment, you or someone you know could be layed off and lose your benefits. Could lose all access to credit and a way to pay for medication and other necessary care.

"I think people have a misconception about who the medically indigent are," Pitman said. (Dr. Dorothy Pitman is the medical director of the Sacramento County clinic branches).

On some days, cars circle the clinic's parking lot.

Some patients arrive in beat-up Toyotas or late-model cars, others in SUVs and, occasionally, even a Lexus or an aging Mercedes.

"Folks lost the house, but kept their fancy cars," said Fred Heacock, the clinic manager.

His point: Bad things can happen to anyone at anytime.

The sense vulnerability -- of exposure -- is also echoed in this LA Times story -- about Wall Streeters having to tighten their belts. Most of the story is about how even the investment bankers on Wall Street earning $400,000 will have to scrimp some. But what jumped out at me, was this vignette:

A few weeks ago, a wife, six months pregnant and about to enter the operating room to have a masectomy for cancer, does not talk to her husband about her imminent surgery. Her husband worked at Lehman brothers. The discussion was about whether she would still have health coverage for *that day* if Lehman Bros. declared bankruptcy.

As an advocate, I see academic research coming across my desk that says higher income earners do worry about the *big event* that will eviscerate their savings. But it has never been spelled out as starkly as this...

And no one polled on the street would likely guess that a family with a $400,000-a-year income would also have to worry about how they will pay for medical care.

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posted by Hanh Kim Quach | Permalink | 9:18 AM


Pressure from all sides

Friday, October 24, 2008
The last of the LA Times' three-part series on the health industry yesterday centered around insurers' aggressive and willful denial of claims from providers.
This practice means providers -- rather than giving medical care, billing for it, and then getting paid -- have to spend lots of money, time, and hire extra staff to chase down reimbursement from insurance companies.

It means that insurance companies hire lots of staff for the specific purpose of denying claims submitted by doctors and hospitals, who have already treated patients.

It eventually means that some providers -- like Centinela hospital (in the story) go out of business.

"Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival," said Von Crockett, Centinela's chief executive. "Every single doctor and hospital is writing off money they are legally owed but don't collect. It's an insane situation."

And just when you thought it couldn't really get any worse......

PR newsire reports that providers are also feeling them impacts of the newfangled Consumer Directed Health Plans on their bottom lines. With many consumer-directed health care plans, consumers are on the hook for more of their care. Premiums for these plans tend to be cheaper. In exchange, co-pays, co-insurance and deductibles are high. The study suggests that billing offices will need to revamp the way they do collections in order to get the money their owed.

Sadly, for consumers, it looks like we lose in all this. Insurance companies will continue to get their premium dollar. Providers will bone up on their collections savvy. And consumers will be chased into courthouse for collections.

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posted by Hanh Kim Quach | Permalink | 11:21 AM


Good reading

Wednesday, October 22, 2008
The LA Times has been running an excellent series the past two days on the insurance industry.

Yesterday's piece was about the horrors of the individual insurance market, a place where many more people would end up if employer-based health coverage was to continue to erode -- as it has been -- and would be hastened if John McCain's health plan were put into place.

Today's installment is about insurance companies that also double as bankers, managing consumers' Health Savings Accounts - a very, very lucrative business and exactly the wrong way we want to go -- putting every patient in his/her own silo rather than spreading risk, as insurance is supposed to do.

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posted by Hanh Kim Quach | Permalink | 10:57 AM


The triple-whammy to workers...

Monday, October 20, 2008
Last week, Health Access was pleased to co-release a Families USA report, "Premiums Vs. Paychecks: A Growing Burden for California's Workers." It was covered in the Sacramento Bee, Contra Costa Times, and the Stockton Record. The basic findings:

* For family health coverage provided through the workplace in California, annual health insurance premiums in the 2000-2007 period rose from $6,227 to $12,194—an increase of $5,967, or 95.8 percent.
* Between 2000 and 2007, the median earnings of California’s workers increased from $25,740 to $30,702—an increase of $4,962, or 19.3 percent.

As if you didn't know from your personal experience, rising insurance costs are vastly outpacing the take-home pay of workers. And what's worse, workers are paying more, and getting less. These premiums are not just costing more, but they are buying less, in terms of benefits. Workers are being asked to pay more, both in terms of share-of-premium, and in terms of out-of-pocket costs, such as co-payments and deductibles. As much as employers are feeling this increase, they are even passing a bigger percentage of the costs along to the worker.

One of the reporters asked if there was advice, but the big solutions to rising health care costs are not individual actions, but collective policy reforms. And that's the challenge for the next few years, at both the state and federal level.

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posted by Anthony Wright | Permalink | 10:40 PM


High Risk a Bigger Risk under McCain

Monday, October 13, 2008

On September 30, Governor Schwarzenegger, who supports John McCain for president, vetoed AB2, a measure to help shore up California’s high risk pool—even though high risk pools are a key concept in John McCain’s health proposal.

California’s high risk pool serves about between 7,000 and 9,000 people, a small fraction of the medically uninsurable population under the current system. Academic experts tell us that 3%-5% of the under-65 population is uninsurable while insurance company actuaries say the right range is more like 7%-10%. California currently has 2-2.5 million people in the individual market so that means that one rough estimate of the number of uninsurable Californians would be 200,000-300,000 people, literally twenty or thirty times as many as currently get coverage through California’s high risk pool, MRMIP.

We know the McCain plan would increase the number of people in the individual market substantially. The new estimates by the Economic Policy Institute say that McCain plan would double the number of people in the individual market in California, adding 2.5 million people. That means that the number of uninsurable Californians would climb to a half million or more. Where on earth are we going to get the money to subsidize coverage for these Californians? Budget deficit. Fiscal meltdown. Stock market tanking. We can barely find the money to help 9,000 medically uninsurable Californians buy coverage: how will we help fifty times that many?

Or maybe the McCain plan is actually what it seems—health coverage for the healthy and the rest of us are just out of luck.

And as for Governor Schwarzenegger’s plea that we should not fix the high risk pool absent comprehensive reform, we ask what reform plan is that? The plan of the presidential candidate he supports? Or the very different plan (or should we say, plans) he supported in 2007? As we look forward to 2009, both in California and nationally, we keep in mind the hundreds of thousands of Californians who cannot buy health insurance at any price.

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posted by Beth Capell | Permalink | 10:00 AM


Saturday session...

Saturday, August 30, 2008
The debate on SB1522(Steinberg) is reported in today in The Los Angeles Times by Nancy Vogel, along with other bills of note.

It's getting attention online as well: Frank Russo at the California Progress Report, without our urging, spotlights SB1522 (Steinberg), which is up for reconsideration today.

The argument that insurers are using is that the bills would eliminate low-cost products. That's untrue--it leaves lots of options, including high deductible products in place: in fact, the bill explicitly categorizes plans into five tiers, expectation that their will be continue to be a wide variation and range in insurance products. But it better labels those products so people are clear what they are getting.

But in doing that categorization, there some choices that may provide so little coverage that even the lowest rating isn't appropriate. Requiring hospital, doctor, and preventative care is a pretty low standard--but would phase out only a handful of products that are "hospital-only coverage."

But is it really "health coverage" if it doesn't cover 80% of all surgeries? Yet that's what hospital-only coverage does (or doesn't) do. This may have made sense 30 years ago, when the vast majority of care was inpatient. But medicine has changed, most surgeries and other care is outside of a hospital. People pay premiums but only get a false sense of security.

Does anybody benefit from such a policy that covers so little care, other than the insurer that collects the premium? We wouldn't allow car insurance to cover only accidents with red cars. Why certify coverage that only covers patients in one setting, but not another?

That's why the bill is actively supported by prominent groups representing low-income families, like ACORN, Western Center on Law and Poverty, and Having Our Say, a coalition of groups representing communities of color, including California Pan-Ethnic Health Network, Latino Issues Forum, and others. It's these groups, not the insurers, that are looking out for low-income and Latino Californians, by supporting SB1522(Steinberg).

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posted by Anthony Wright | Permalink | 12:21 PM


A step forward! NOT a stumble...

Friday, August 22, 2008
The Riverside Press-Enterprise this week had an editorial called "Health Stumble'' bemoaning Sen. Sheila Kuehl's SB1440, which would require all health insurance offered in the state to spend at least 85% premiums on providing health care -- that is physical exams, surgery, mammograms -- you name it. SB1440 is now awaiting concurrence on the Senate Floor -- thank goodness.

They cite a Rand Corp. study which *only* looked at health plans regulated by the Department of Managed Health Care. Those health plans are not allowed to spend more than 15% on administration (of course, that doesn't count profit, but at least it's a target). But, as we know, health insurance plans in California are regulated by two agencies -- DMHC *and* the Department of Insurance.

Until a couple of years ago, some plans at the Department of Insurance (ahem, Blue Cross) spent as little as 51 cents for ever premium dollar on health care. (This we gleaned from a DOI powerpoint presentation at a public hearing). Meanwhile the company would spend 23 cents of every dollar consumers pay to use against consumers -- fighting bills for patient services, scouring health records in order to retroactively rescind policies, and other administrative costs. The remaining 27 cents is reserved for profit and executive bonuses.

That was changed and the DOI now requires that health plans spend at least 70% of their premiums on providing health care -- but that's still far short of 85%.

The Press-Enterprise argues that "medical loss ratios'' don't really tell us much about the plan's efficiency or quality of care. True -- but right now, we have *nothing*.

In an information void, such as the one we have now, the percentage of premium dollars spent on patient care is an important (though not the only) measure of a plan’s value. Unfortunately, low-value products (like the ones offered at DOI) are marketed to consumers for their low premiums. Patients do not have the actuarial expertise, or information to assess whether a particular low-premium product will actually provide them value – meaning it would pay for physician visits, drugs and other health costs when they need it.

Products that have low medical-loss ratios often:
  • do not have maternity coverage,
  • do not cover prescription drugs,
  • have high deductibles,
  • high co-insurance, and
  • lack caps on how much consumers need to spend out-of-pocket for their illnesses.

Such flimsy coverage causes consumers to deter care, or leaves them saddled with medical debt. And that's a stumble.

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posted by Hanh Kim Quach | Permalink | 1:48 PM


Whose side are you on: consumers or insurers?

While Senator Steinberg was being sworn in as the new President Pro Tem on the Senate side, and calling for “health access for every Californian,” insurance company lobbyists were actively attacking Senator Steinberg’s health care bill, SB1522, on the Assembly side.

Without a strong case to make, they are resorting to mischaracterizations of the bill, hoping nobody pays attention to the facts in the heated last days of session.

The bill is modest but meaningful. It would ensure that consumers have more confidence in their coverage, and that they know what they are getting when buying coverage as individuals.

Right now:
· It’s impossible to make price comparisons, since each plan from insurer has different deductibles, co-pays, out-of-pocket maximum, benefits, or networks.
· It’s hard to know what a plan covers, or doesn’t cover, or how comprehensive any given plan is.
· Some consumers think they are well covered, and find out they are not only when it is too late. Some plans are marketed as quality coverage but actually cover only hospitalization, but not surgeries, outpatient treatments, or doctor’s visits. (It would be like having car insurance, but only for accidents with red vehicles.) Some plans leave consumers with significant gaps in coverage, sometimes with unlimited exposure to medical bills.

SB1522 (Steinberg) does the following:
* Requires health insurance to cover doctors, hospitals, and preventive care
* Requires all health insurance to have a maximum out of pocket cost.
* Categorizes all health insurance into five categories so that consumers can know whether they are buying comprehensive coverage with low cost sharing or a high deductible, catastrophic policy. It allows for "apples to apples" comparison.

Contrary to the misrepresentations of Blue Cross and other insurers, here is what SB1522(Steinberg) does NOT do:
- SB1522 (Steinberg) does NOT eliminate so-called “low cost”, low premium products with high deductibles. In fact, that’s why there are five categories, so that those products are better labeled.
- SB1522 (Steinberg) does NOT require all health insurance to cover specific benefits. There are other bills: AB1962 DeLaTorre requires maternity coverage, for example.
- SB1522 (Steinberg) does NOT force people to leave the coverage they have. Anybody with a current plan can renew it indefinitely.

These mischaracterizations and misrepresentations show why we need the bill: Just as consumers are rightfully skeptical about their insurance policies and what’s in the fine print, legislators should be skeptical of the claims of the insurance companies. The point of this bill is to give consumers more confidence that their coverage will be there for them when they need it. I am not sure there’s a legislative remedy for the representations of insurers in the halls of the Capitol.

Assemblymembers should join key organizations, including Health Access California, AARP California, ACORN California, AFSCME, CALPIRG, California Teachers Association, Congress of California Seniors, Community Health Councils, Consumers Union, Having Our Say, Jericho, Latino Issues Forum, MALDEF, MS Society, Planned Parenthood, SEIU, Small Business Majority, and Western Center on Law & Poverty in supporting SB1522(Steinberg).

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posted by Anthony Wright | Permalink | 8:41 AM


The new 401(k)s

Friday, August 15, 2008
I was pleasantly surprised, this week, by my periodic email from HSA Weekly. Usually, the publishers of this news compendium of Health Savings Account news send out articles intended to promote Health Savings Accounts and their crummy high-deductible health plans.

But this week, I got an article about how HSAs aren't doing all that well because consumers have been rightly wary of them.

The article sums it up well, but essentially, health care is a very complex system to navigate. The idea that "consumer choice'' and "cost-conscious'' behavior is going to drive down costs is ludicrous when you consider that:

a) the most expensive care (ie. emergency care) is not voluntary, nor do you have time to make "cost conscious'' decisions about which hospital you should go to when you're having a heart attack.
b) it's impossible to find price stickers on the care that we need
c) consumers aren't medical experts and don't know what care is most effective and less effective
d) "choice," as proponents of high-deductible plans like to promote, is not neccesarily a good thing. Think of how overwhelming it is to choose a flavor at Baskin Robbins.

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posted by Hanh Kim Quach | Permalink | 2:36 PM


Key bills move to the next step...

Thursday, August 07, 2008
Assembly Appropriations Committee, chaired by Assemblyman Mark Leno, is meeting as we speak. Here's some of the bill that are being passed, and are heading to their second floor vote:

* SB840(Kuehl), to establish a single-payer universal health care system, and set up a commission to work out the financing, was passed, with amendments to adjust timing issues.

Other bills passed include:
* SB973(Simitian) to facilitate county-based public health insurers to work together;
* SB981(Perata) to prevent balance billing;
* SB1198(Kuehl) to require insurers to offer coverage of durable medical equipment;
* SB1440(Kuehl) to require a minimum level of premium dollars to go to patient care;
* SB1522(Steinberg) to provide standards for individual insurance products;

More information to come...

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posted by Anthony Wright | Permalink | 3:10 PM


Dealing with ER overcrowding...

How do we reduce emergency room overcrowding and waiting times?

Certainly, people have pointed to reducing the ranks of the uninsured, who lack primary care and end with worst health conditions as a result; and to prevent budget cuts, that threaten some ERs directly, and the coverage and benefits and clnics that help people avoid the ER in the first place.

But to follow-up on Hanh's post about the new study on Emergency Room use, there's another important solution that needs to be in the mix as well: make sure the insured get timely access to care.

Here's Victoria Colliver's article in the San Francisco Chronicle:
"...What's new is the rise ... in frequency in visits, and that's occurring in the insured," said Dr. Stephen Pitts, author of the report and a CDC fellow who teaches emergency medicine at Emory University's School of Medicine.

Pitts said the difficulty in getting primary care appointments could be contributing to the rise in emergency room use, particularly by those with insurance or on government programs such as Medicare or Medicaid.

"The likely cause is there are just fewer and fewer primary care physicians," he said. "If you were to get the flu and your doctor says, 'Sure, I'll see you in two weeks,' you may not be able to wait. It's hard for even insured people to get quick appointments and be seen quickly."

Under managed care plans, people agree to a limited network of providers with the assurance that that network has enough doctors, hospitals, and specialists to provide timely and appropriate care. The state Department of Managed Health Care (DMHC) is charged with ensuring that there is "network adequacy" and people are able to get "timely access" to care.

There is currently a stakeholderregulatory process at DMHC to implement standards for timely access, as required by AB2170(Cohn). Health Access California, the sponsor of that bill, along with Western Center on Law and Poverty, California Pan-Ethnic Health Network, and other organizations, are representing consumers against many, many provider groups.

We hope the resultion will not only ensure that people get timely access to care... and in turn, help with the ongoing issue of ER overcrowding.

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posted by Anthony Wright | Permalink | 11:27 AM


Another reason to pick on HSAs ...

Wednesday, August 06, 2008
Proponents of these deplorable Health Savings Accounts say they like them because consumers can take matters into their own hands in lots of ways: you can "shop around'' for care (although, I'm not sure how we do this when we don't have cost and quality transparency, yet) and you can save for health expenses in retirement.

A new EBRI study takes on the latter point head-on. Their research shows that consumers contributing the maximum to their HSAs (plus catch-up) will only have saved between 16 percent and 33 percent of what they will *actually* need in retirement to cover health expenses.

The study assumes that Medicare will cover half of what a person needs in retirement (about $376,000). With an HSA, an individual would accumlate $59,000 over 10 years (with the catch-up deposits).

A man with average health expenses and an average life span would need to have saved $132,000 to cover drugs, premiums and other out-of-pocket expenses in retirement. That's more than twice what could be saved under the HSA. And that's assuming he's average and dies on time. If he lives longer, he'd need $266,000 -- 4.5 times more than is in the HSA. In the most expensive scenario, he lives a long time with LOTS of health care needs -- he'd need $555,0000.

Women have it even worse since we live longer. A retiring woman would need $181,000 to cover drugs, premiums and other out-of-pocket expenses in retirement. A woman who lives beyond the average life span, and incurs higher than average health costs needs $654,000. Add to this the gender wage gap and......

It's unclear to me whether the savings projections EBRI takes into account the fact that consumes with HSAs will likely be using a chunk of the money they invest in the account because a prerequisite to having and HSA is being underinsured. Bush Administration rules require that consumers must be insured only by a high-deductible health plan (a deductible of *at least* $1,100) in order to open such an account. You also can't save more than the deductible, so......

Seems like a bad deal all around:
* You can't shop around
* You have a crummy health plan
* You're *still* broke in retirement.

Don't sign me up for that one.

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posted by Hanh Kim Quach | Permalink | 12:21 PM


Making coverage matter...

Monday, August 04, 2008
Health reform continues, and the first job is to make coverage provide the security for which people get insurance in the first place. That's the upshot of the front-page article today by Jordan Rau of the Los Angeles Times.

It is a good, comprehensive report about several consumer protections moving through the Legislature and to the Governor's desk, which would in particular help those who don't have group coveragae through an employer or public program, and have to buy coverage as an individual. The Governor is currently negotiating with the legislators about the final contents--from SB1522(Steinberg), our bill to better standardize the insurance market, to SB1440(Kuehl), which would ensure a percentage of premiums go to patient care.

It's critical to future efforts around health reform: if people don't have confidence in the value of coverage, then they are less enthused about expanding that coverage.

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posted by Anthony Wright | Permalink | 1:46 PM


If only...

Wednesday, July 30, 2008
The National Federation of Independent Business this week unveiled their campaign to promote health reform from a business perspective. What I really liked was their "Faces of the Healthcare Crisis,'' a compilation of stories/testimonials of small businesses struggling with health care costs. The stories, not surprisingly, sound a lot like some of the consumer stories we get.

One guy, whose employees largely receive health care through their spouses, did not have insurance of his own. When he had chest pains, he delayed going to the ER. When the pain became excruciating, he finally relented and found he was having a heart attack, leaving him with $200,000 in hospital bills.(!!) Sounds like something out of our story database: uninsured, delayed care, high hospital bill.

We certainly empathize with many of the small businesses who want, very badly, to provide health care for their workers. It's expensive, and we have bills that can help:

  • Transparency (a la AB 2967 - Lieber, and which NFIB is supporting) allows health care buyers can gravitate toward providers that are effective and efficient.

  • Standardizing and organizing the individual market, a la SB 1522 (Steinberg), would cap out-of-pocket costs, ensure that every plan has doctors, hospitals, and preventive care. This would help give small businesses, who are worried about how much their workers can afford, more peace of mind.

  • Public insurer (SB 973 - Simitian) would allow small businesses to buy coverage from a public system that competes for business with private companies.

  • Anti-rescission (AB 1945 (De La Torre) and various other bills) would make harder for insurance companies to yank coverage from paying policy holders willy nilly.

Of course, (here's our 'I told you so' moment) what would have *really* helped was the 1993 Clinton Health plan, which was defeated with lots of help from NFIB. Through Clinton's plan, smaller businesses would have only had to pay up to 3.5 percent of payroll costs toward healthcare rather than the 20-plus percent they are now paying in a virtually unregulated market.

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posted by Hanh Kim Quach | Permalink | 1:35 PM


Healthy Food

Tuesday, July 29, 2008
High gas prices, a sputtering economy, global food shortages the obesity epidemic and countless other apocryphal trends make the headlines and have spurred interest in locally grown goods, farmers markets and "Slow Food" (I'm still trying to figure out what the heck that is.)

I really love food. I love the farmers' market. I plan my weeks and weekends around the farmers market. I feel really fancy, wholesome and healthy buying my food directly from the Hmong and Latino farmers, and I prefer the taste of farmers' market food to Safeway (sorry, Steve Burd.) But the small family farmers who are raising goats, planting tomatoes and picking cherries are doing this at risk to their own financial well being and health. The Boston-based Access Project recently published a paper about the health care burdens that California's farmers face.

Farmers tend to be wealthier than the average citizen and are more likely to be insured. On average, they spent nearly $9,000 annually on premiums and out-of-pocket expenses, which constitutes between 9 and 44 percent of the family's income. High health care expenses:
  • Made it hard for farmers to pay other bills;
  • Meant farmers delayed investments in their farm;
  • Took time off farming/ranching.

According to the report author, Carol Pryor, "The survey shows that most farmers and ranchers are trying to do the right thing by getting coverage, but they aren't finding products in the (individual) market that are affordable and that provide them with financial protection if they get sick. This is a case of product failure.''

If not for moral reasons, wouldn't the like-minded food obsessed want to keep our farmers healthy?

I'll do a quick shameless plug for a few of our bills here that would start us down the track of easing health care burdens for farmers:
  • SB 1522 (Steinberg) would organize the individual insurance market, where family farmers need to buy their coverage, and establish a minimum benefit package that includes doctors visits, hospitals and preventive care;
  • AB 2967 (Lieber) woudl require insurers and healthcare providers to provide better data on the cost and quality of care, and create pressure to drive down rapidly escalating health care costs;
  • SB 973 (Simitian) would create a public insurer that would enable farmers to buy in to a system that is publicly run and competes with private insurers;
  • Rescission bills (AB 1945, AB 1150, AB 2549 and AB 2569) rein in the insidious insurer practice of retroactively cancelling coverage of people who have been paying premiums and believed they were covered.

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posted by Hanh Kim Quach | Permalink | 11:32 AM


Mega problems with mini-coverage...

Last week had a startling article by Julie Appleby at the USA Today about the result of a 36-state investigation of HealthMarkets, resulting in a $20 million settlement, for duping lots of health care consumers into buying substandard health coverage.
The investigation, prompted by numerous complaints, found that insurer HealthMarkets failed to properly train its sales agents, who didn't always fully disclose the limits of its health policies to consumers and sometimes did not pay for medical services promptly.

HealthMarkets, owned by three private-equity firms including the Blackstone Group, has about 612,000 policyholders in 44 states through its subsidiaries: Mega Life and Health Insurance, Mid-West National Life Insurance and Chesapeake Life Insurance.

The company sells an array of plans, many of which pay only limited amounts toward medical care. The settlement follows the January release of the investigators' findings, which covered company practices from 2000 to 2005.

"The severity of their actions certainly warranted that level of penalty. They hurt a lot of people," says Washington Insurance Commissioner Mike Kreidler, whose state and Alaska led the investigation. Since 2002, HealthMarkets has been fined by at least seven states and faced lawsuits from dozens of policyholders.

There has been lots of commentary on the web about these practices, and these products--at sites like Managed Care Matters, and The Health Care Blog which includes a report that these insurers and issues are active in California.

Recently, the Sacramento Bee profiled a story of a couple that got snookered into buying "junk insurance" by one of the companies listed above. That article, spotlighted the pending SB1522(Steinberg), sponsored by Health Access California, as a legislative remedy, to begin to address this troubling issue.

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posted by Anthony Wright | Permalink | 12:50 AM


Keep on harping

Friday, July 18, 2008
This month's issue of Health Affairs contains two academic studies about the impact of consumer-directed health plans on consumer behaviors: one about CDHPs and drugs, and the other specifically about health service seeking behavior.

The papers examined whether such plans would make consumers more "cost conscious'' as proponents alleged they would. The evidence, so far, is: not really in a good way.

In the drug article, consumers were no more likely to seek out generics to save money. However, consumers with higher deductibles were two to three times more likely to skip or stop using high blood pressure, asthma and cholesterol drugs.

In the other article, consumers who weren't already really involved in seeking out information about their health treatments weren't going to be significantly more interested once they enrolled in these plans, however, those in high-deductible plans were a teensy bit more likelyto be more engaged than those in traditional plans.

What I found interesting about both studies was they compared behaviors of consumers in low- and high-deductible plans. As expected, consumers in high-deductible plans immediately ratcheted down their health consumption -- lowering drug doses and skipping doctors visits to save money. But by the second year, even consumers in lower-deductible consumer-directed plans started delaying and forgoing care.

These studies, quantifying and examining real consumer behavior in response to these health plan creations will be an important piece as we proceed with reform on the state and national level -- with some (not us) pushing for more consumer-directed involvement.

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posted by Hanh Kim Quach | Permalink | 1:09 PM


Sick, Twisted and Fun

Tuesday, July 08, 2008
The Sacramento Bee just posted this Hospital charge database of the 25 most common procedures by hospital. The Bee has compiled all the information reported to the Office of Statewide Health Planning and Development in 2006 and put it in an easy-to-use scroll down format.

The charges reflect what consumers would pay if they didn't have insurance -- in other words, the sticker price. Insurance companies negotiate far lower rates.

I'm finding it weirdly entertaining to see how broke I'd be if I ever found myself uninsured.

If I ever needed a hip replacement, it'd cost *as little* as $40,000 at Mercy Hospital in Folsom or *as much as* $1o9,000 at UC Davis Med Center down the street from me.

If I ever got pneumonia, and needed a breathing tube: $362,000 at Mercy San Juan, a whopping $850,000 at Sutter Memorial.

Play with it. Have a heart attack. (Get an angioplasty -- $94,000 at Sutter, $140,000 at UC Davis.) Pass comprehensive health reform so no one gets these sticker prices.

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posted by Hanh Kim Quach | Permalink | 5:38 PM


Killing us softly...

Wednesday, July 02, 2008
NYTimes has a horror story about diabetes and how it creeps up on you and "eat(s) you alive,'' as one doctor described it. In addition to being the leading cause of blindness and amputation, diabetes also affects the afflicted in a myriad other ways from head to toe -- depression, sleep issues, stroke, dental and hearing problems, liver and kidney problems, *paralysis (!)* of the stomach, ulcers, and various sexual problems.

Cases of diabetes are growing -- 8 percent of the US population had it in 2007. And by 2050, it could be 25%, according to the Centers for Disease Control.

I'm fixating on this for two reasons. 1) I'm genetically predisposed to diabetes; my father was diagnosed in his mid-40s. 2) Our insurance coverage trends make it very difficult for people to maintain and keep this perfectly treatable disease at bay.

As more people (not us, mind you) advocate for more stripped down health plans, devoid of disease maintenance, it creates all kinds of barriers to getting the meds and seeing the doctor -- all necessities for a person with diabetes.

I'll do a quick, shameless plug for our SB1522 here, which not only would organize the individual insurance market, but also establish minimum benefits -- such as doctors, hospitals and preventive services. It's one of the ways we could begin to tame the unruly individual insurance market, which has been rapidly degenerating over the past few years.... unless we want a nation of diabetic zombies by 2050.

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posted by Hanh Kim Quach | Permalink | 10:34 AM


Deadbeat Insurers

Tuesday, July 01, 2008
David Lazarus at the LA Times had an excellent column last weekend about health insurers charging men and women different rates. When Blue Shield and other insurers admit they're charging women higher premiums because they are higher "risks'' (Read: more expensive), they're coming clean about the industry's already discriminatory practices against women. Though, in doing so, it further widens the gap between what women and men pay for health care. Women will wind up spending more, not only to *buy* care, but also to *use* care, as has been the case.

Since the steady increase of high-deductible health plans (and in the absence of stronger consumer protections such as community rating and minimum benefit standards) insurers have been permitted to passive aggressively charge women more based on the fact that women are trying to be conscientious about their health.

A Harvard Medical School study last year found women ages 18-64 with consumer-directed health policies wound up spending 218% more on health care than men. "High-deductible plans punish women for having breasts and uteruses and having babies,'' said Dr. Steffie Woolhandler, one of the authors of the study.

We require various gynecological exams. We need birth control pills (as a result of co-activities with men). Sometimes we have babies (as a result of said co-activities) -- though high-deductible plans don't cover maternity anyway. We go to the doctor when we hurt. We generally seek more preventive care than men. Hmmmm. And I thought I was just being responsible.

A world that allows high-deductible plans to proliferate -- as envisioned by John McCain -- is essentially a world that legitimizes deadbeat insurers, who want to thrust more and more costs onto women in the name of keeping prices low. But for whom?

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posted by Hanh Kim Quach | Permalink | 12:00 PM


Mortgage metaphor...

Tuesday, June 24, 2008
How confusing and complicated is the individual insurance market? It makes the much-maligned mortgage industry look clear and simple in comparison.

I was reading a recent study in the Journal of Insurance Regulation (Winter 2007) conducted by Michael Wroblewski during his time at Consumers Union, and the comparison came up. From the article:

“The question remains how consumers choose individual health insurance when they are required to assemble the information on the relevant attributes themselves, because they do not have employers or unions acting as intermediaries for this purpose. And, unlike other financial decisions consumers make, such as mortgage products in which the market provides consistent information for standard products (e.g. 30-year mortgages), standardized information for individual health insurance products does not exist; hence, comparative cost, coverage and benefit data is much more difficult to come by.”

Our individual insurance market is like trying to figure out to compare mortgages where different companies had different terms and lengths, and its impossible to compare, with one company selling 27- and 32-year mortgages, another selling 31.5- and 26-year mortgages.

Contrary to those who mis-characterize the bill, SB1522 doesn’t prohibit the equivalent of a 28.5-year mortgage, if some insurer wanted to provide that “creative” product; it just requires that the insurance company offers a standard product—the equivalent of the 30-year mortgage—as a benchmark.

My hope with SB1522 is that we at least get to the place where people have a standard loan that they can compare between plans, that they are appropriately alerted when purchasing “subprime” insurance, and that we set a minimum standard to prevent the “junk” products that are the insurance version of predatory lending.

Obviously, with everything going on in the mortgage and housing crisis, there’s renewed attention whether those disclosures and consumer protections are enough. Yet it would be a major step to even get those basic protections in the individual insurance market.

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posted by Anthony Wright | Permalink | 11:00 PM


Buyer beware, indeed...

Sunday, June 22, 2008
Our efforts to reform the individual insurance market got more attention this week, by John Howard in the Capitol Weekly and Aurelio Rojas in the Sacramento Bee, which both profiled SB1522, by Senator Darrell Steinberg, and sponsored by Health Access California.

SB1522 passsed the Assembly Health Committee this week, and is now pending in the Assembly Appropriations Committee.

The Bee has the story of the Mary McCurnin and Ron Bednar of Rancho Cordova, who unwittingly bought a plan that the insurer Mid-West National Life Insurance Company called "definied benefit" coverage.

McCurnin and Bednar said they paid a monthly premium of $600 for what they thought was comprehensive coverage. But in 2002, after she was diagnosed with breast cancer and he had open-heart surgery, they learned otherwise.

Their plan covered only 10 percent of his hospitalization, and the company rescinded her coverage because she didn't disclose on her application that she was given a prescription for an anti-depressant years ago that she never filled.

With more than $250,000 in medical bills, the couple filed for bankruptcy protection and now face the loss of their home.

"Health insurance companies will do everything they can not to cover you," McCurnin said. "Having good (individual) health insurance is a myth."

The wife of the couple was rescinded under that now-infamous practice; the husband got "coverage," but found it covered only 10% of his costs because the benefit was capped. Examples like this inform consumer advocates' deep skepticism about the individual insurance market, and any attempt to expand it, as President Bush and now Senator McCain seek to do.

With little bargaining power, the individual consumer trying to get coverage will be at the mercy of the big insurance companies. SB1522 (Steinberg) tries to set some minimum standards in terms of benefits (doctors, hospitals, preventative care), and to place a cap on out-of-pocket costs. Other bills this year deal with rescission, or making sure than premium dollars go to patient care. All are consumer protections that attempt to make the situation a little more fair in an inherently unfair situation.

Even if all passsed, more reform will be needed. Both stories put this bill in the context of reconstructing health reform.

As the Weekly describes it, "Although the governor's health-care reform plan died this year in the Capitol's political crossfire, critical pieces have been resurrected and are quietly moving through the Legislature. One of the most important--already approved in the Senate and opposed by HMOs--would force health insurers to give consumers uniform, clear and accurate descriptions of their policies to aid comparative shopping."

And in the Bee, Senator Steinberg himself not only makes the clear case for the bill on its merits, and but ends the article making the case that the bill as a foundation for future, and more comprehensive, reform.
"As we move forward to more comprehensive reform in the future, creating confidence that people know what they are buying will be a key element," he said.

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posted by Anthony Wright | Permalink | 3:17 PM


Let's do it, then.

Tuesday, June 17, 2008
Anne Eowan, lobbyist for the Association of California Life and Health Insurance Companies, made a marvelous suggestion in Assembly Health Committee.

She was opposing Health Access' sponsored bill, SB1522 (Steinberg), which would do lots of things -- including weed out junk insurance and organize the individual insurance market into five tiers so that consumers would know what they were buying if they bought a five-star plan, versus a one-star plan.

In opposing it, however, Eowan suggested that "more transparency would be good'' and welcomed efforts to have the California Health Benefits Review Board take measurements of the existing individual insurance market.

Luckily, we already have similar language drawn up on that. AB2289 (Chan) -- remember that from 2004? It was vetoed.

Then, though, Eowan's organization, along with her merry band of health insurers, took varying degrees of opposition, opining that having to explain how many enrollees they had in their various plans, what the deductibles, copays, out-of-pocket maximums were, etc. for various plans were, was far too onerous, expensive, burdensome, time consuming, etc.

Nice to see she's had a change of heart.

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posted by Hanh Kim Quach | Permalink | 10:22 PM


An Unhealthy Trend

Tuesday, June 10, 2008
75 million adults -- that's 42% of working age adults in the US -- had no insurance or really bad insurance (the kind that makes you pay up the nose anytime you sneeze) in 2007.

That's up from 35% of working age adults that were uninsured or underinsured in 2003, the first time Health Affairs did this analysis. A new analysis -- out today!-- updates the study from five years ago.

Among the findings:

  • 25 million people who were technically "insured'' actually have really crappy insurance (that amounts to one-fifth of the entire "insured'' population)
  • The number of adults earning between $40k and $60k who were underinsured nearly tripled from 5% to 13%.
  • The number of adults earning more than $100k and were underinsured (meaning that they spent more than 10% of their income on out-of-pocket medical expenses) increased from 1% to 7%.

The series of studies is important because until recently, most analyses only tracked the number of people without coverage and how lack of coverage impacts a person's ability to stay healthy. Just as important now, though, is this tracking the number of people with inadequate insurance. High deductibles, high co-pays, high co-insurance and high out-of-pocket costs cause patients to behave in similar ways to a person who is uninsured -- they forgo care because of the expense.

Insurance companies like to argue that these low-quality, low-premium plans are at least a backstop to keep people from going into bankruptcy. But as our previous study has shown, people don't have much in the way of assets -- and a $5,000 deductible would wipe out the savings of 40% of Americans. Health Affairs (obviously a nerd's must-read publication) also recently published a study that showed uninsured families earning more than 300% of the poverty level had less than $4,000 in liquid assets. (Here's our blog post on that study).
From our perspective, being underinsured means you're paying premiums to be functionally uninsured. All in all, we don't really buy the insurance company logic on this and think they should be labeled and limited (and the most egregious ones banned) -- as SB 1522 would do.

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posted by Hanh Kim Quach | Permalink | 11:32 AM


We knew her when...

Sunday, June 01, 2008
The effort to win national health care reform is heating up: lots of planning meeting and activities to ensure that there is a mandate for a new President and Congress to take this issue on, and to be ready to roll in 2009.

Consumers Union (a Health Access California board member) is spearheading a Cover America Tour: an RV that will criss-cross the country for four months, collecting stories about the issues that people have with the broken health care system.

The effort has a website and blog of interest, which includes a video of the launch of the Cover America Tour from Consumers Union's Yonkers headquarters, being cheered by staffers from the labs that test all those products that are evaluated in Consumer Reports. It should be an interest and informative trip, that I urge folks to follow along on the web.

The video prominently features the energetic Meg Bohne (pictured above, crouching), a Health Access alumnus, who has told me she give us partial credit (or blame) for her current assignment. On the website page that describes the whole enterprise, Meg Bohne cites her experience as a "a seasoned community activist, advocate and organizer, Meg has come to specialize in on-the-road campaigns in vehicles that have spanned a bus, an ambulance and, now, an RV." At left is the ambulance she drove up and down the state of California for Health Access, in the cause of lower prescription drug prices.

We wish Meg and the whole crew at Consumers Union luck in their trip and their effort. We look forward to hearing the stories, the personal health care experiences, and the adventures on the road!

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posted by Anthony Wright | Permalink | 2:02 AM


What constitutes coverage?

Tuesday, May 27, 2008
As the Democratic presidential candidates debated whether their "universal coverage" plans were "universal"--and what that meant--there wass surprisingly little debate about the definition of "coverage."

What makes "coverage" coverage?

It's a good question, as Florida Governor Charlie Crist just signed a so-called health reform that doesn't expand coverage one bit, but rather strips down the definition of coverage to make the premium cheaper. Critics say that as insurers water down the benefits, at some point the value of the coverage is so little that it's not worth paying premiums for in the first place.

It seems people get coverage to prevent the real health and financial consequences of being uninsured. They literally pay a premium to 1) get the care they need, and 2) not face financial ruin as a result.

There are some products out there that don't meet this basic definition. For example, we've heard of products--some sold by disreputable outfits, sometimes on TV at 3am--that say they provide hospital coverage, but only reimburse $200/day. Only if you've been to a hospital do you know that such a plan doesn't begin to cover an overnight stay, and that such "coverage" from a masssive hospital bill is merely an illusion. It's "junk" insurance.

SB1522(Steinberg), which passed the California Senate Tuesday, would set a minimum standard for coverage as well, in two basic ways:

* It would set an overall cap on out-of-pocket costs, so people paying premiums would not face unlimited financial liability when they get sick or have an emergency. This won't eliminate your standard high-deductible plans, may be a (not great) option for a healthier, wealthier person who wants to save on the premium and who has the ability to self-insure a few thousand dollars of a deductible. But it would eliminate those plans which cover so little or impose so much cost-sharing on the patient that the person continues to be at risk of banktruptcy.

* It would requires that a plan should include doctor, hospital, and preventative care, preventing hospital-only coverage. This would prevent hospital-only plans that leave patients in a situation where cancer isn't covered, since most of the treatment is in a doctor's office, rather than a hospital. Even worse, you don't want an perverse incentive for people to want the more invasive, more expensive hospital treatment unless they need it. Again, these plans often provide a false security to patients--until its too late.

These "junk" plans, because they collect premiums but are far skimpier in paying out benefits, can be very lucrative for the insurers who sell them. But they have the capacity to undermine the very notion coverage altogether. What's the point of paying for coverage, if you still face financial ruin?

People are growing more and more concerned that their coverage will not be there for them when they need it. They are frightened that even if they are insured, there will some loophole or provision that leaves them with significant medical debt. That's why SB1522(Steinberg) and other efforts are so important, to make the definition of coverage mean something. Consumers with coverage deserve some security that with their premium, they will be protected.

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posted by Anthony Wright | Permalink | 11:52 PM


The debate on SB1522...

Senator Steinberg just presented SB1522 on the Senate floor. The preliminary count is that it passed, 21-14, largely on party lines.

Senator Cox was the only other speaker, in opposition. An insurance agent, Cox suggested that "Senator Steinberg should find himself a good agent," and that an agent could provide the information to help a consumer decide what coverage to get.

He argued that with the classification of health plans into five tiers, "you've taken away the flexibility" which will lead to a "higher-premium program with fewer enrollees."

In fact, the five tiers allow for lots of variation and flexibility within those tiers. Above some minimum standards (see below), there is total flexibility in benefit design. The tiers will simply provide consumers some guideposts, so they are better be able to make comparisons between insurers.

SB1522 does seek to eliminate some "junk" insurance that leaves patients with unlimited financial exposure, undermining the point of coverage in the first place. Coverage would have to have some overall cap on out-of-pocket costs. The minimum standard for coverage would need to include doctor, hospital, and preventative care, effectively restricting doctor-only or hospital-only health coverage--as if people can guess that not just the type of ailment they will have, but the type of treatment as well.

But other than that, there's lots of flexibility. As Senator Steinberg said in closing, the basic point of the bill is to have clear information. And, he asked, while many people may benefit from "a good broker like Senator Cox," what's the harm in providing everyone as much information as possible? "Information is a good thing, and provides greater flexibility" for consumers.

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posted by Anthony Wright | Permalink | 3:43 PM


When cancer isn't covered...


SB1522(Steinberg), sponsored by Health Access California, is up for a full Senate vote this week.

The bill would standardize the individual insurance market, so that consumers have a better sense of the coverage they are buying, and allow for "apples-to-apples" comparisons between plans. It would create clear categories so that people would have a better sense of how comprehensive their plan was, and would set a minimum standard for benefits to include doctor, hospital, and preventative care, and have a overall cap on out-of-pocket costs. This would eliminate the "junk" insurance that leaves people to believe they are covered but finding out later they have significant financial exposure.

Below is the testimony of Susan Braig (pictured above, with Senator Darryl Steinberg, author of SB1522). With a limited income to pay premiums, she understood she was buying catastrophic coverage... but not that her "hospital only" plan wouldn't cover the significant costs of being treated for breast cancer, because most of those treatments were not in a hospital.

This is a excerpt of her testimony in the Senate Health Committee earlier this year:
I am a self-employed grant writer, whose Stage 2 Breast Cancer has, thankfully, not metasticized, though my credit card debt has.

In 2001, after a year with no health insurance, my 50th birthday sent me comparison shopping, and I went to Blue Cross. I purchased what I considered to be a “catastrophic” policy, their lowest tier, their BASIC PPO 1000. I thought my out-of-pockets costs would be limited to $3,500, comprised of a $1,000 deductible, plus a $2500 co-payment requirement before full coverage kicks in.

Blue Cross made it clear up front, this plan did not cover doctor visits, tests or prescriptions; I rationalized that, since I was healthy and rarely needed a doctor, why sweat the "small stuff?"

The important thing was, Blue Cross said they would cover 80% the big stuff: surgeries, emergencies, and hospitalizations, and with the big stuff, I would quickly spend $3500, and then Blue Cross would pay 100% of my care for the rest of the year.

Prior to my 2004 diagnosis, I assumed fighting a catastrophic disease like cancer involved the big stuff.

* What I didn’t realize then, but I know now, is that during the next 11 years, most of my medical services I would need in my battle with cancer would involve things not covered—specialist exams, ultrasounds, an $8,000 MRI, lab tests, prescriptions.

Even my chemotherapy treatments were considered doctor visits, unless I had the identical treatments an hour from home in a hospital.

* I also didn’t realize that the way deductibles and co-pays are calculated meant they didn’t count any of these non-hospital expenses to meet my deductible, and I would almost never reach my annual $3500 cap, no matter how much I spent.

It’s true that after I met my deductible, Blue Cross did cover 80% of in-hospital services, such as my Lumpectomy and a 3-day emergency hospitalization in 2004… although by the time I paid off my $1000 deductible, my various 20% co-payments fell $30 short of the $2500 co-payment requirement to get full coverage.
* For a time, due to my low income, I got help with the costs that Blue Cross didn’t cover from the state’s Breast and Cervical Cancer Treatment program. That was a lifesaver—even though I was still paying premiums to Blue Cross.

* I still have significant follow-up treatments. In each of the last few years, I have paid out over $5,000 a year in out-of-pocket costs, on top of what I pay in premiums, yet my insurance pays nothing. I expect these treatments—and these costs--to go on for several more years. I already have over $40,000 in credit card debt, mostly stemming from my illness and medical care.

With the ongoing costs of follow-up care, I begin to wonder, "I'm paying insurance premiums for WHAT?"

When people seek coverage, they should know what their options are, and what they are getting. When they have coverage, they should have the confidence that it will actually provide protection against financial ruin and bankrtupcy. SB1522(Steinberg), if it passes the Senate floor this week, will take a major step in providing that clarity and security.

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posted by Anthony Wright | Permalink | 9:32 AM


Healthcare Armageddon

Tuesday, May 06, 2008
The New York Times had an excellent article this weekend about workers, who have health coverage through work, feeling financially strained.

The reason: businesses - unable to absorb higher health care costs - have decided that workers need to absorb more of these costs. Businesses are buying crappier coverage (this doesn't mean cheaper premiums, just cheaper than more comprehensive plans, but still expensive) and asking workers to pay a greater share of the premium. So not only are premiums for workers increasing, but the plans that they are getting are getting worse, which means higher copays, deductibles, and less coverage.

It used to be that worrying about how to pay for health care happened mostly if you didn't have insurance. Then, it started creeping into the ranks of the insured -- but only those who bought insurance on their own, without the benefit of a group buying in bulk to negotiate lower rates. Now, though, health cost worries are hitting the employer market -- where most Americans get their coverage.

One *insured* worker said he was losing the equivalent of a month's worth of pay with the higher premium and deductibles. That's in addition to the fact that the coverage isn't very good.
Another *insured* worker, who has diabetes, doesn't monitor her blood sugar regularly and can't afford to see an eye doctor on top of other normal everyday expenses.

The Times characterized these plans as "health insurance in name only.'' I like that: essentially people are paying to be uninsured under these plans.

My health plan colleagues would argue that having some kind of coverage is better than being uninsured. No?

But is it really? At what point does debt become so crushing that it doesn't matter if the number is $60,000 or $200,000 in debt, and accruing interest. Especially considering that families that are insured, earning more than 300% of the poverty level actually have negative (-$600) net financial assets according to the latest study by Health Affairs. On an annual income of $60,000, either way, you're screwed.

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posted by Hanh Kim Quach | Permalink | 2:01 PM


Who are these made for anyway?

Friday, May 02, 2008
Health Affairs has just released an excellent new study, which challenges the notion that high-deductible health plans with their low premiums are offering the otherwise a good alternative to going uninsured. Based on this research, and an updated report from the Government Accountability Office tells us who does benefit from these plans.

The Health Affairs study just confirms what advocates have been saying -- and debunks what insurance companies argue: high deductible plans are not a sound choice for families who are uninsured. One medical emergency would leave these families vulnerable to tens of thousands in medical debt, if not bankruptcy.

UPDATE: Check out Health Access' earlier report on "Thin Protections," also showing how high deductible plans provide little comfort for middle-income families that are often asset-poor.

Among the Health Affairs report's findings:

  • Only 21% of households with one uninsured person could cover a $1,000, along with their other obligations.
  • No more than 9 percent of households with one uninsured person could meet the out-of-pocket maximum of $5,000.

Also interesting:

$300: Uninsured families earning less than 300% of poverty ($63,600 for a family of four) had an average of $300 (!) in liquid financial assets. Incidentally, this is pretty much all they have too.

Higher income assets thin: Even for those families, who were uninsured, earning more than $63,600 -- assets were pretty scant. Gross financial assets -- which include stocks and mutual funds -- totalled $3,600 for these families. Families WITH insurance had more than four times that amount: $16,420.

So who are these high deductible plans for anyway? Well, a new GAO report tells us that:

The Government Accountability Office just updated their 2006 report on Health Savings Accounts, which can only be opened with a qualifying high-deductible health plan.

First -- only about half of the 4.5 million HSA-eligible plan enrollees opened an HSA.

And -- those who opened them have more money. The average income for the enrollees of these plans was $57,000. For those who opened an account, though, the average income was $139,000 -- more than twice as much.

I'm hoping some insurer folks or defenders of high-deductible plans can explain, again, why they still believe in light of this research that these plans are a good idea for the uninsured.

email me: hquach@health-access.org

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posted by Hanh Kim Quach | Permalink | 2:31 PM


On top of student loans...

Sunday, April 20, 2008
We are coming close to high school and college graduations, so it's a good time to spotlight this post by Henry Stern on InsureBlog on student insurance.

The young are the most likely to be uninsured, and what is offered to them isn't a very good value. The post spotlights a very typical student policy that will leave some students will have significant medical debt even before graduation.

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posted by Anthony Wright | Permalink | 2:38 PM


Fake Plans

Monday, April 14, 2008
One of the bills Health Access is watching that's up in Senate Health Committee this week is SB1603 (Calderon), which would authorize the state to license and regulate so-called discount health cards.

We question the very existence of these things. Not only do they annoyingly clog up the fax machine (you've seen those strange health "insurance'' offers), but they rely on consumer naivete to make money.

Their sin is that they're incredibly deceptive and provide questionable -- if any -- value to consumers. Discount health plans entice consumers with words like "no pre-authorization,'' "no pre-existing condition denial,'' and "no waiting period." They exaggerate their value, promising low prices -- discounts of as much as 80% -- at a vast "network'' of providers.

But often, neither is true. Consumers have no idea what the price for which the "discount'' is based on, rendering the discounts essentially meaningless -- and often, they could have received the discount anyway if they told the provider they were uninsured.

Mila Kofman, health policy expert formerly of Georgetown University, also tested out some cards and found that nearly three-quarters of providers contacted did not even realize they were part of the "provider'' network. Complaints filed against these cards in California show a similar patern.

Kofman's research also finds that the monthly cost for the identical card can range from $54.95 to $120 because of the pyramid-esque marketing for these products. Cancelling the cards can also be tricky, as many continue to charge a former subscriber's credit card even after they consumer quit the service.

Sadly, SB1603 would create a way to allow these fake plans to operate legally and continue to bilk consumers.


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posted by Hanh Kim Quach | Permalink | 10:27 AM


Only in LA?

Friday, April 11, 2008
For those who were not able to witness Senate Health Committee in person, this week, it's not always as boring as you might think.

Committee Chair Sheila Kuehl and Sen. Dave Cox had an interesting exchange during testimony of our bill SB1522, which would help organize the individual insurance market and place caps on out-of-pocket costs. Most importantly, it would help weed out junk coverage and require at least mimimum coverage of doctor's office visits and preventive care.

Kuehl shared a story of a caller on a radio show who had ambulance workers lay a bill on her chest as she was being wheeled into the hospital emergency room.

"Surely,'' snorted Sen. Dave Cox, R-Fair Oaks, "they would do no such thing.''

Responded Kuehl: "Yes, Sen. Cox. And a hospital in LA would surely not dump patients on Skid row in the middle of the night.''

"Well...'' grunted Cox. "Maybe in Los Angeles.''

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posted by Hanh Kim Quach | Permalink | 2:12 PM


Chaps my hide

Wednesday, April 09, 2008
It's really really annoying to me when people who talk about the "affordabilty'' of insurance only fixate on the premium prices.

And it's especially offensive when we have a person travel from Los Angeles to Sacramento to testify about junk insurance plans -- after having incurred $40,000 costs -- be told that "at least you had insurance.''

As part of an illustration for why we need SB1522 (Steinberg) to organize the individual health insurance market and weed out junk insurance plans, we brought up someone who actually had one of these hospital-only junk insurance plans -- Susan Braig, a former art teacher.

Susan was a conscientious consumer with a modest income. Approaching age 50, she decided she needed to get health insurance after having dropped it briefly in the late-90s during the huge run-up in premium prices. After carefully researching the balance of premium and benefits, she selected the coverage she could afford -- hospital-only, catastrophic coverage through Blue Cross -- the Basic PPO 1000. This has a $1,000 deductible with a $3,500 maximum out-of-pocket, and did not cover doctors visits. After the deductible, 80% of big-ticket services (like surgeries, hospitalizations, etc.) would be covered.

But, Susan rationalized, as many in her predicament might, that she's healthy, never used her insurance before, and could afford the doctor's visits here and there, but that $3,500 was a modest amount to pay if a catastrophic illness befell her.

Well -- shortly after purchasing the policy, she was diagnosed with breast cancer -- and over two years, her credit card debt increased from $5,000 to $45,000.

None of the series of doctors visits, prescription drugs, ultrasounds and lab tests were -- or will be -- covered by Basic PPO 1000. What's worse, it also did NOT count toward her deductible $1,000 deductible.
"Even my chemotherapy treatments were considered "doctor visits'' unless I had the identical treatments an hour from home in a hospital.''

Functionally, Susan is uninsured. This experience has left Susan wondering -- "I'm paying insurance premiums for WHAT?''

So it continues to gall me that the industry makes arguments that the "cost'' of insurance will go up if we weed out plans like Susan's. Up from what? Isn't $40,000 over two years enough already?

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posted by Hanh Kim Quach | Permalink | 4:33 PM


I love a good bargain...

Friday, April 04, 2008
And I'm a good bargain shopper. (My prize: 10-piece set of top tier Calphalon pots once for $70) Here are my rules for assessing a good bargain:
  1. Is it a known product (do I know it's a quality product -- like Calphalon);
  2. If it's marked down, is it a good price compared to other similar products;
  3. Lastly, will I use it (because it does me no good to get a good deal on shoes if I'm not going to wear them...and I've done this way too much).

This mental checklist is meant to ensure that the product is of value to me.

Which brings me to the letters submitted by the health insurance industry SB1522 (Steinberg), which create standards for health insurance that would enable any person to go through such a checklist when buying insurance on their own. (See our Fact Sheet on SB1522.)

In short, SB1522 would:
  1. Classify health plans into five "tiers'' so consumers would know what they were buying - i.e. a top tier plan means comprehensive, bottom tier means "catastrophic.'' (Known/quality product)
  2. Insurers would have to have at least one plan in eacth tier, enabling apples-to-apples comparisons.
  3. Establish minimum benefits, which would weed out junk insurance -- such as "hospital only'' plans that barely covers the hospital visit. (will I/can I use it?)

Let's step back a bit. Let's say you don't receive health insurance on the job now and have to go out and scavenge for a decent plan. Go to http://www.ehealthinsurance.com/ and you'll get hit with 107 plans with all manner and range of co-pay, deductible, premium, office visit policies.

The "choice'' argument: Insurers argue that SB1522 will lead to a reduction in consumer choice. First off, their argument is bogus. Choice will still exist, it will just be more organized and limited. And limiting choice for consumers is actually a good thing, according to research on a parallel issue-401(k)s (the research on choice can also be applied to choosing ice cream, jams and insurance policies):

"...Findings from this study show that an extensive array of options can at first seem highly appealing to consumers, yet it can also reduce subsequent motivation to purchase this product...the very act of making a choice from an excessive number of options might result in "choice overload,'' in turn lessening both teh motivation to choose and the subsequent motivation to commit to a choice....''

That research correlates with private polling of uninsured and individual market participants, which also reveals that consumers do not have confidence in their understanding of what the plans provide, nor do they trust the literature that is provided by the plans.

SB1522 would provide choice, but in an organized fashion so that consumers could go through their mental checklist and feel comfortable about a "known product'' and make comparisons against other plans.

Eliminating "lower cost insurance" argument: Lower cost insurance is only lower cost to buy; it's not lower cost to use. In fact, consumers who would benefit from SB1522 are spending twice as much on health care as those who are able to get insurance through their jobs. What insurers really mean here, is they want to get a check from you every month for your premium, but not have to spend any money on you until you've spent $2,000 (or whatever the deductible is) for doctors visits, medicines etc. Don't you love paying for something, just so that you can pay for more things? This violates Rule #3 in evaluating value: will i use it. Research has shown that consumers are half as likely to see the doctor, fill their prescriptions -- actually take care of their of their health.

That sure doesn't sound like a good deal to me.

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posted by Hanh Kim Quach | Permalink | 1:46 PM


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Anthony Wright is the executive director,
with a background as a consumer advocate and community organizer on many issues, including health issues for the last ten years in California and New Jersey.