Health plans allow picking, choosing

first_imgThe future of health coverage may look more like the Home Shopping Network than “ER.” In a fast-growing trend that advocates call consumer-driven health care, buyers can choose tailor-made coverage and higher deductibles from insurers that let them be choosier about doctors, drugs and hospitals in an attempt to curb the soaring cost of health insurance. For example, if buyers or their dependents don’t intend to get pregnant, they can eliminate maternity coverage. Families can cut premiums by taking on a $2,000 annual deductible and then shopping around for the most affordable care. “All the big insurers are now offering consumer-directed products,” said Caroline Steinberg, vice president of trends analysis for the American Hospital Association in Washington, D.C. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWalnut’s Malik Khouzam voted Southern California Boys Athlete of the Week “It’s a bit of an experiment,” she said. “At this point, I don’t think we know whether it’s going to work or not.” Critics insist the high deductibles are merely a way for insurers to shift more costs to workers. They also point out that the plans don’t require insurers to cut either their profits or prices. California Insurance Commissioner John Garamendi, a supporter of government-mandated coverage, has called the trend a “death spiral” for health care. He argued that it will cherry-pick the youngest, healthiest and richest people while forcing traditional managed care plans to charge more to cover the sickest patients, as well as maternity and obstetrics care. The result will be more uninsured people, he said. “It’s not consumer-driven at all,” Garamendi said. “What it is is market-driven by insurance companies, … segmenting the population into high-cost, high-risk segments and low-cost, low-risk segments.” Of the 186 million Americans who have health insurance, only about 3 million people are enrolled in consumer-driven plans. However, that number is expected to increase as politicians, insurers and employers struggle to hold down health care costs that have outpaced inflation for years. With the annual cost of insuring a family now about $10,000, many employers no longer offer health coverage. Only 66 percent of full-time workers at private firms have employer-sponsored plans, compared with 80 percent in 1989, according to the U.S. Bureau of Labor Statistics. Garamendi specifically targeted a plan unveiled last year by Blue Cross. Marketed as Tonik, it’s geared to people under 30 who are just starting out in their careers. By design, it does not include maternity benefits but offers catastrophic coverage, along with limited dental and vision care. Blue Cross research showed the target market didn’t want maternity coverage, said Robert Alaniz, a spokesman for WellPoint Inc., parent company of Blue Cross. Eliminating it made the plan more affordable, he said. “It’s not what government thinks you need. It’s not what we, the plan (provider), think you need, but it’s what you, the consumer, told us,” he said. Hoi Wong, 29, of San Francisco chose Tonik after going to work for a small firm that doesn’t offer health coverage but gives employees $200 a month to buy their own. Wong pays $98 a month in premiums. Her annual deductible is $1,500. Outside of an emergency, she intends to use the plan mainly for regular checkups and for its vision and dental benefits. “I actually don’t go visit a doctor very much,” she said. “I try to eat healthy and try to have regular patterns in life and get my eight hours of sleep.” Wong designs strollers and car seats but isn’t interested in maternity coverage. “I don’t plan to have a family in the very near future,” she said. Consumer-driven plans are based on the theory that people who must pay more upfront in deductibles will shop around for the most affordable health care. For some patients that could mean using generic rather than brand-name drugs or taking an aspirin before rushing to an emergency room after a sports injury. Tax-exempt health savings accounts recently permitted by Congress allow people to bank their own money toward the deductibles. Giant health care provider UnitedHealth Group Inc. is betting the consumer-driven approach will help remedy the ailing system. The firm, based in Minnetonka, Minn., has applied the philosophy to its own products and paid more than $800 million to buy two companies with pioneering experience in consumer-driven plans, UnitedHealth spokesman Mark Lindsay said. “The single best agent to control health care costs is the individual,” he said. “Unfortunately, today they are disconnected from that reality.” Analysts aren’t sure how much impact the approach will have on costs. They pointed out that most consumer-driven plans must still cover expensive care such as debilitating accidents and diseases. They also said the average person simply doesn’t have enough information or expertise to make informed choices about the complex system and won’t want to pick and choose when their health is on the line. “To say consumers want this – do they really know what they’re buying?” asked Hal Luft, professor of health economics and health policy at the University of California, San Francisco. Now the high-deductible plans are “mostly appealing to the healthy, wealthy and wise,” added Jon Gabel, vice president of the Center for Health System Change. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more