THE UNINSURED: Insurers Suggest Two-Tier Coverage

      California insurers announced Thursday that they could reduce the ranks of the state's 7 million uninsured residents if the health care industry was deregulated and given more flexibility to develop low-cost benefits, the Sacramento Bee reports. The California Association of Health Plans intends to recommend to a state Senate committee this week that managed care companies be given fewer government mandates such that they may offer lower-cost, "bare-bones" health plans. "Health plans can be a big part of the solution in California. We need to be as creative as possible," said CAHP President Walter Zelman. According to Zelman, a "basic" plan could require policyholders to accept only generic drugs, limited testing for treatments and may deny mental health coverage. Zelman contends that if premiums for small employers were trimmed by 20% to 30% -- as with a basic plan -- more small employers could sponsor coverage. Nevertheless, many health care workers fear that such a plan would further exacerbate the haves and have nots in an already polarized health care system. Helen Schauffler, director of the UC-Berkeley Center for Health and Public Policy Studies, said, "I don't think we want to go toward a two-class system. Why should low-income people not have access to breast cancer screenings, mental health benefits and whatever else (health plans) might choose not to offer?" Moreover, studies by Washington, DC-based consumer group Families USA discovered that "bare-bones" health plans typically wind up insuring fewer than 300 people -- "far short" of the goal. Zelman, however, argues that although reduced-benefit plans "haven't caught on," the proposal "might be attractive to the tens of thousands of small employers in the state who now are buying nothing" (Fisher, 12/3).