Individuals, Small Businesses Face Increasingly Difficult Health Plan Choices, CHCF Report Says
Individuals purchasing their own health insurance and small businesses offering their employees health coverage are paying higher monthly premiums or receiving "scaled-down" benefits as medical costs continue to rise, according to a report released last week by the California HealthCare Foundation. The report, the first in a series called "Trends and Analysis in Insurance Markets," examines changes over the last nine months in benefits offered by health plans in Fresno, Los Angeles, Sacramento, San Diego, San Francisco and Shasta counties. The report found that consumers increasingly are forced to choose between health plans with higher cost-sharing or plans with higher monthly premiums. Many of these changes in benefits and payment options can be confusing, according to the report. For instance, while some health plans offered to small businesses require coinsurance payments equal to a percentage of a "negotiated fee" for service, other plans calculate the coinsurance payment as a percentage of the "usual and customary" fee for service. The definitions of these terms and the dollar amounts associated with them often are not published, according to the report. Some health plans that once provided comprehensive benefits to small businesses have now started implementing PPO-style cost sharing, including tiered hospital copayments or coinsurance. In the individual insurance market, some health plans are implementing maternity copayments of up to $1,000, raising well-baby care coinsurance to 30% to 50% and increasing annual out-of-pocket maximums to as much as $4,000 (California HealthCare Foundation release, 5/3). Such changes make it increasingly difficult for consumers to evaluate different health plan choices, the report concludes, calling for health plans to standardize benefit terminology and give examples of reimbursement levels and out-of-pocket costs for a group of pre-defined medical conditions (Trauner et al., "Small Businesses and Individuals Face Greater Cost-sharing and Increasing Complexity," April 2002). The full report is available online. Note: You must have Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.