Employer-based health insurance is an idea whose time had come and gone, according to the Boston Globe, which explores potential alternatives.
Real median household income remained unchanged between 2003 and 2004 at $44,389, according to a report released today by the U.S. Census Bureau. Meanwhile, the nation�s official poverty rate rose from 12.5 percent in 2003 to 12.7 percent in 2004. The percentage of the nation�s population without health insurance coverage remained stable, at 15.7 percent in 2004. The number of people with health insurance increased by 2.0 million to 245.3 million between 2003 and 2004, and the number without such coverage rose by 800,000 to 45.8 million.
These findings are contained in the Income, Poverty, and Health Insurance Coverage in the United States: 2004 [PDF] report. The report�s data were compiled from information collected in the 2005 Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS).
Source of Estimates and Statistical Accuracy
As with all surveys, the estimates may differ from the actual values because of sampling variation or other factors. All statements in this news release have undergone statistical testing, and all comparisons are significant at the 90-percent confidence level, unless otherwise noted.
Also released today were tabulations from the 2004 American Community Survey (ACS), some of which are included in the report: Income, Earnings and Poverty from the 2004 American Community Survey [PDF].
The ACS is a powerful new tool. In the past, local policymakers had to choose between using old local data from the last census and new national data. The ACS provides a new level of local timeliness, giving policymakers current local data. Gathered from the largest household survey in the United States, the ACS data herein is based on the collection of information from 800,000 addresses sampled during the 2004 survey period.
The fact sheet, Differences Between the Income and Poverty Estimates From the American Community Survey and the Current Population Survey Annual Social and Economic Supplement, provides information on the differences in concepts and purposes of the ACS and the CPS.
Current Population Survey
The 2005 Current Population Survey Annual Social and Economic Supplement shows the following results:
* 2004 marked the second consecutive year in which real median household income showed no change.
Race and Hispanic Origin
* Real median household income did not change between 2003 and 2004 for non-Hispanic whites, blacks or Asians or for households with Hispanic householders.
* Black households had the lowest median income in 2004 ($30,134) among race groups. Asian households had the highest median income ($57,518). The median income for non-Hispanic white households was $48,977. Median income for Hispanic households was $34,241.
* Comparison of two-year moving averages (2002-2003 and 2003-2004) showed that the real median income for households with householders who reported American Indian and Alaska native as their race was statistically unchanged. The same was true for native Hawaiian and other Pacific islander households.
* Real median household income remained unchanged between 2003 and 2004 in three of the four census regions � Northeast ($47,994), West ($47,680) and South ($40,773). The exception was the Midwest, where income declined 2.8 percent, to $44,657. The difference in income between the Northeast and West was not statistically significant.
* The South continued to have the lowest median household income of all four regions. The Northeast and West had the highest incomes among regions.
* Real median income remained unchanged for native as well as for foreign-born households between 2003 and 2004. Native and foreign-born households had a median income in 2004 of $45,319 and $39,421, respectively.
* Real median earnings of men age 15 and older who worked full-time, year-round declined 2.3 percent between 2003 and 2004, to $40,798. Women with similar work experience saw their earnings decline by 1.0 percent, to $31,223. Reflecting the larger fall in the earnings of men, the ratio of female-to-male earnings for full-time, year-round workers was 77 cents on the dollar, up from 76 cents in 2003.
* There were 37.0 million people in poverty (12.7 percent) in 2004, up from 35.9 million (12.5 percent) in 2003.
* There were 7.9 million families in poverty in 2004, up from 7.6 million in 2003. The poverty rate for families remained unchanged at 10.2 percent. The poverty rate and the number in poverty showed no change for the different type of families.
* As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the average poverty threshold for a family of four in 2004 was an income of $19,307; for a family of three, $15,067; for a family of two, $12,334; and for unrelated individuals, $9,645.
Race and Hispanic Origin (Race data refer to people reporting a single race only.)
* In 2004, the poverty rate declined for Asians (9.8 percent in 2004, down from 11.8 percent in 2003), remained unchanged for Hispanics (21.9 percent) and blacks (24.7 percent) and rose for non-Hispanic whites (8.6 percent in 2004, up from 8.2 percent in 2003).
* The poverty rate of American Indians and Alaska natives did not change when comparing two-year averages for 2002-2003 and 2003-2004. The same was true of native Hawaiians and other Pacific islanders.
* For all children under 18, both the 2004 poverty rate (17.8 percent) and the number in poverty (13.0 million) were unchanged from 2003.
* The poverty rate increased for people 18 to 64 years old (from 10.8 percent in 2003 to 11.3 percent in 2004), but declined for those age 65 and older (from 10.2 percent in 2003 to 9.8 percent in 2004).
* The native-born population had increases in both their poverty rate (from 11.8 percent in 2003 to 12.1 percent in 2004) and their number in poverty (from 30.0 million in 2003 to 31.0 million in 2004). Foreign-born naturalized citizens had a 2004 poverty rate of 9.8 percent, compared with 21.6 percent for those who had not become citizens; both rates were unchanged from 2003.
* The Midwest was the only region to show an increase in their poverty rate � 11.6 percent in 2004, up from 10.7 percent in 2003. In 2004, the poverty rates for the Northeast (11.6 percent), South (14.1 percent) and West (12.6 percent) were unchanged from 2003. The South continued to have the highest poverty rate.
Health Insurance Coverage
* The percentage of the nation�s population without health insurance coverage remained unchanged, at 15.7 percent in 2004.
* The percentage of people covered by employment-based health insurance declined from 60.4 percent in 2003 to 59.8 percent in 2004.
* The percentage of people covered by government health insurance programs rose in 2004, from 26.6 percent to 27.2 percent, driven by increases in the percentage of people with Medicaid coverage, from 12.4 percent in 2003 to 12.9 percent in 2004.
* The proportion and number of uninsured children did not change in 2004, remaining at 11.2 percent or 8.3 million.
Race and Hispanic Origin (Race data refer to those reporting a single race only.)
* The uninsured rate in 2004 was 11.3 percent for non-Hispanic whites and 19.7 percent for blacks, both unchanged from 2003. The uninsured rate for Asians declined from 18.8 percent to 16.8 percent.
* The uninsured rate for Hispanics, who may be of any race, was 32.7 percent in 2004 � unchanged from 2003.
* Based on a three-year average (2002-2004), 29.0 percent of people who reported American Indian and Alaska native as their race were without coverage, higher than the rate for native Hawaiians and other Pacific islanders (21.8 percent) and for those of other race groups, but lower than that of Hispanics. Comparisons of two-year moving averages (2002-2003 and 2003-2004) showed that the uninsured rates for American Indians and Alaska natives and for native Hawaiians and other Pacific islanders did not change.
* While the proportion of the foreign-born population without health insurance in 2004 (33.7 percent) was unchanged from 2003, the rate for the native-born population increased (from 13.0 percent in 2003 to 13.3 percent in 2004).
* The Midwest had the lowest uninsured rate in 2004 (at 11.9 percent), followed by the Northeast (13.2 percent), the West (17.4 percent) and the South (18.3 percent).
American Community Survey
The national findings regarding median income and poverty rate are consistent between the CPS and the ACS. When examining localities of 250,000 or more residents, the 2004 American Community Survey shows the following results concerning income, poverty and earnings:
* For counties of 250,000 or more people in 2004, median household income ranged from $88,133 in Fairfax County, Va., to $24,778 in Hidalgo County, Texas. For cities of similar size, median household incomes ranged from $71,765 in San Jose, Calif., to $24,031 in Miami, Fla.
* Among the 37 counties with populations of 1 million or more in 2004, 32 experienced no statistically significant change in median household income from 2003 to 2004. Three counties (King, Wash.; Palm Beach, Fla.; and Philadelphia, Pa.) experienced declines; two counties (Fairfax, Va.; and Orange, Calif.) showed increase.
* Among counties with 250,000 or more people in 2004, poverty rates ranged from 2.6 percent in Johnson, Kan., to 43.6 percent in Hidalgo, Texas. Among places of a similar size, the poverty rates ranged from 7.4 percent for Anchorage, Alaska, to 33.6 percent for Detroit.
* Among the 37 counties with 1 million or more people in 2004, seven experienced changes in their poverty rates between 2003 and 2004. Of those seven, Broward, Fla., and Oakland, Mich., showed decreases, while Allegheny, Pa., Bronx, N.Y.; King, Wash.; Nassau, N.Y.; and Wayne, Mich., had increases. Among the nine cities of this size, New York, N.Y., saw its poverty rate rise, while poverty in the other places remained unchanged.
* Connecticut, Maryland, Massachusetts, New Jersey and the District of Columbia had among the highest median earnings for both men and women who worked full-time, year-round.
* In each of the 50 states and the District of Columbia, women�s earnings were less than men�s in 2004. The District of Columbia was the area with the greatest parity between men�s and women�s earnings. There, women earned 91 cents for every dollar that men earned.
Earnings by Industry
* Among the 20 major industry sectors, men earned the most in 2004 in the management of companies and enterprises sector ($77,754). For women, there were five sectors where median earnings were about $40,000 or more: management of companies and enterprises ($41,608); mining ($41,516); professional, scientific and technical services ($41,398); utilities ($40,981); and information ($40,447).
* In each of the major industry sectors, men earned more than women. The sectors where the earnings gap between men and women was the largest were management of companies and enterprises, where women earned 54 cents for every dollar that men earned; finance and insurance (57 cents); and professional, scientific and technical services (60 cents).
Earnings by Occupation
* Among the 22 major occupational groups, men earned the most in legal occupations, such as lawyers, judges and law clerks (more than $100,000). Among women, those in computer and mathematical occupations had the highest median earnings ($56,585).
* Among the major occupational groups, women�s earnings as a percentage of men�s earnings were about 90 percent or higher for the following groups: installation, maintenance and repair; community and social services; construction and extraction; and healthcare support. In contrast, women�s earnings as a percentage of men�s earnings were about 65 percent or less for legal occupations, sales and related occupations and healthcare practitioner and technical occupations.
Estimates from the CPS ASEC may not match the estimates from the ACS because of differences in the questionnaires, data collection methodology, reference period, processing procedures, etc. Both are surveys and are subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90-percent confidence level, unless otherwise noted.
For additional information on the CPS data, visit this. For additional information on ACS data, visit this.
A new report from the UCLA Center for Health Policy Research shows that job-based health insurance coverage - the backbone of the state's system of health insurance - is declining. While job-based family coverage plummets, children's coverage is protected by public insurance programs, such as Medi-Cal and Healthy Families.
"We are seeing a shift to government programs, like Medi-Cal and Healthy Families, as employers fail to provide affordable health insurance for working families," said author E. Richard Brown, Ph.D., director of the UCLA Center for Health Policy Research and professor in the School of Public Health. "The data show that California's health insurance system is increasingly unstable and unable to provide for the basic medical needs of millions of residents."
While a majority of Californians are still insured through their jobs or those of relatives, those numbers are declining, specifically among dependents. Pushed by a dramatic 79.1 percent increase in the cost of job-based family coverage for the average worker, enrollment of dependents dropped 4 percentage points for children and 2 percentage points for adults from 2001 to 2003. All income groups and all racial and ethnic groups had significant decreases in job-based insurance.
Among children, however, these losses were balanced by a 5 percentage point increase in children's enrollment in Medi-Cal and Healthy Families, leading to an actual increase in children's insurance overall. Many adults shifted to privately purchased heath plans, and many of those bought high-deductible health plans, potentially risking bankruptcy and/or significant financial losses due to high medical bills. Approximately 50 percent of all personal bankruptcies in the U.S. are due to medical debt, according to a recent report by Harvard researchers.
The shrinking of job-based health insurance is just one of many trends identified in "The State of Health Insurance in California: Findings from the 2003 California Health Interview Survey." Other findings from the report include:
* More than 6.6 million Californians under age 65 (more than one in five nonelderly residents) went without insurance for at least part of 2003.
* More than 3.7 million lacked health coverage for the entire year.
* Nonelderly Latinos and American Indian/Alaska Natives report highest rates of uninsurance.
* Three out of four uninsured are in working families. Two-thirds of children in Medi-Cal or Healthy Families had at least one parent who was employed.
* Main reason the uninsured give for not having coverage is "I can't afford it."
* Those without health insurance were much less likely to have seen a doctor, gotten vital preventive screenings for cancer, or taken medication for high blood pressure.
The report was funded by grants from The California Endowment and The California Wellness Foundation. Findings are based on data collected in the 2003 California Health Interview Survey.
"We see more and more middle- and low-income workers priced out of job-based health coverage each year because they can't afford their share of the cost," said Robert K. Ross, M.D., president and CEO of The California Endowment. "Our state and national leaders on both sides of the aisle must work together to reform the system before all but the highest wage workers are priced out of health coverage."
"These numbers represent millions of people - our fellow Californians - whose lives can be devastated by illness or injury because they don't have the access to medical care that health insurance provides," said Gary L. Yates, president and CEO of the California Wellness Foundation.
The 2003 survey interviewed more than 42,000 households throughout the state. Since it was first conducted in 2001, the California Health Interview Survey has been an essential tool for policy makers, researchers and health advocates at every level needing a detailed snapshot of the complex health needs of California's diverse population. The survey is a collaborative project of the UCLA Center for Health Policy Research, the California Department of Health Services, and the Public Health Institute.
The UCLA Center for Health Policy Research was established in 1994 and is one of the nation's leading health policy research centers. It is also the premier source of key health policy information for California. The Center is based in the UCLA School of Public Health and is affiliated with the UCLA School of Public Affairs.
Despite its nonprofit status, BlueCross BlueShield of Tennessee has earned profits for the past four years and accrued $1 billion in reserves, twice the amount required by law, according to The Tennessean.
A report comparing the quality and efficiency of Minnesota's major health plans was released today by the Buyers Health Care Action Group (BHCAG), a Twin Cities-based employer health care purchasing coalition. Intended to guide employer purchasing and consumer health plan selection, this first-of-its-kind study is based on health plan performance data collected through eValue8, a nationally recognized survey that asks health plans to submit information about their clinical quality and administrative efficiency. Seven health plans doing business in Minnesota participated in the survey including Blue Cross Blue Shield of Minnesota, HealthPartners HMO, HealthPartners PPO, Patient Choice, Medica HMO, CIGNA PPO and Sioux Falls-based Sioux Valley HMO. BHCAG conducted individual meetings with each participating plan to share the results and to identify areas for improvement and collaboration.
�The eValue8 tool measures the steps Minnesota�s health plans are taking to adopt electronic medical records, manage chronic diseases, help consumers chose high-performing providers and reward providers who provide high-quality care,� explained BHCAG CEO Carolyn Pare. �eValue8 shifts our current health care system�s fee-for-service focus to a pay-for-performance system where doctors and hospitals have strong incentives to improve care, consumers have comparative information to choose high quality doctors and employers voice common expectations to the health care marketplace.�
By using eValue8, Pare says employers are able to influence the health care marketplace both locally and nationally by placing a common "purchase order" for clinical specifications that have been proven to stabilize costs and keep quality high. eValue8 is a national initiative supported by the Washington, DC-based National Business Coalition on Health. More than 250 health plans in the nation now participate in the survey process and it has been used successfully by ten employer purchasing coalitions as well as companies like General Motors and Pitney Bowes to negotiate pricing, determine employee premiums and collaborate on programs to improve treatment of costly chronic health conditions such as diabetes, asthma and cardiovascular disease. The Minnesota report can be obtained at www.bhcag.com.
How eValue8 Works
Hundreds of benchmarks are gathered through a rigorous survey that measures a health plan�s effectiveness in such areas as information technology, member communication, disease management, measuring provider performance, behavioral health treatment and management of pharmacy costs and safety. For information technology, health plans are asked if the physicians and nurse practitioners within their network have access to portable handheld devices and computer software to order patient prescriptions and prevent drug conflicts. Plans must also disclose the sophistication of the information systems they use to process claims and how they communicate claim costs to employers. In the consumer engagement section, health plans submit information on the extent of their member outreach activities such as 24 hour/ seven day a week nurse advice lines, the type of provider qualifications and performance criteria they list in their consumer catalogs and whether or not they use �push� email technology to educate members about their specific health conditions and the disease management programs offered to help members control their disease. Pharmacy management is another important category where plans report on the steps they take to ensure pharmacy safety at the prescribing and patient level, their relationships with pharmacy benefit management firms, how they manage costs through generic equivalent prescriptions and whether or not they have programs to address the fast-growing category of specialty pharmaceuticals that are used in chemotherapy and to treat diseases such as Hepatitis C.
Other Key Survey Areas
Provider quality incentives, healthy lifestyle promotion, and behavioral health treatment are also part of the eValue8 survey. For example, plans are asked what they do to track and compare performance for both doctors and hospitals and if they partner with other health plans in the community on patient safety programs. The survey also requires plans to document the extent of their involvement in community health prevention programs on cancer, immunizations, tobacco cessation, weight management, and worksite health promotion. For behavioral health, plans are rated high if they demonstrate a commitment to promote established clinical guidelines and best practices for treating depression and alcohol disorders. eValue8 pays close attention to whether plans measure individual provider performance results in behavioral health and the extent of their patient support and education programs.
Minnesota plans compared favorably to the best performing national plan in most of the quality categories. HealthPartners HMO, HealthPartners PPO, Medica and Patient Choice received special national recognition for their performance in three survey categories. HealthPartners HMO and Medica were selected for their success in adopting health information technology while Patient Choice was recognized for its efforts in measuring and publicly reporting individual provider performance. HealthPartners PPO was also honored for its effectiveness in offering preferred provider plans for specific employer needs. These Minnesota health plans recently shared their strategies at a recent eValue8 best practices national conference held in Chicago, Illinois. One of the first Minnesota employers to include the eValue8 results in their health care purchasing decision-making is the University of Minnesota. �The eValue8 results allowed us to create a special quality-ranking matrix that we used in our health plan selection process,� explained Dann Chapman, Director of the University�s Employee Benefits. �We are now able to set performance and accountability standards with our health plan vendors that have both a financial and quality improvement focus.�
Cornerstone of a Comprehensive Value-Based Purchasing Strategy
The eValue8 survey tool is one of the major components of the Smart Buy Alliance � representing more than three-fifths of all Minnesota consumers - that was formed late last year by private sector employers, unions and the State of Minnesota. Pare said eValue8 allows employers of all sizes to make health care purchasing decisions using their own criteria. �Some employers use the eValue8 information to negotiate pricing with health plans. Some employers use the information to set employee premiums, with higher quality health plans costing employees less,� Pare explained. �Equally important to pricing - employers working with coalitions like BHCAG use the information to promote market wide improvements in health care quality through partnerships with the health plans.� "We are very pleased with the growing acceptance of a common tool such as eValue8 to measure health plan performance," said Kevin Goodno, Commissioner of the Department of Human Services and member of Governor Pawlenty's Health Cabinet. "This will lead to the recognition and rewarding of positive outcomes, which is a critical part of the Governor's agenda to reform the health care system." Survey Triggers Community-Wide Health Improvement Programs
�The ultimate goal is for all health care purchasers to use eValue8 so it can become a true, community-wide tool for health care quality improvement,� Pare stated. BHCAG will use the eValue8 results to develop community-wide programs between employers, providers and heath plans. Program areas identified by the Minnesota results include an effort to promote the use of established clinical guidelines for depression and alcoholism treatment, enhancing pay-for-performance through cash rewards to providers, the continuation of developing portable electronic personal health records and the promotion of RxHub, a common communications framework that links doctors, pharmacies, pharmaceutical benefit management companies and health plans for the purpose of sharing prescription benefit information. Health Plans Endorse the Process
�The eValue8 tool gives purchasers a comprehensive way to examine health plan capabilities and highlights those health plans who have made quality and performance measurement a priority. It provides a solid reinforcement for health plans and providers, and keeps us focused on continued improvements,� said Andrea Walsh, Executive Vice President and Chief Marketing Officer at HealthPartners. "The eValue8 process provides Blue Cross a useful way to hear from a segment of our customers. While scorecards always have limitations, this kind of dialogue is helpful in guiding our work," explained Richard Neuner, senior vice president and chief marketing officer.
About The Buyers Health Care Action Group
Formed in 1988, the Buyers Health Care Action Group (BHCAG) is a coalition of public and private employers working to recreate the health care system so consumers will get the care they need in the right place, at the right time and at the right price. BHCAG is a founding member of eValue8 that was created by leading U.S. employers and coalitions as a way for health care purchasers to buy and evaluate health plans based on their performance and value instead of solely on price.
Hispanics make up 15 percent of the U.S. population and almost 29 percent of the uninsured. More than one in three Hispanics is uninsured, and 25 percent has only public health insurance, according to the government's leading health expenditure survey. In addition, Hispanics constitute 36 percent of all uninsured children under 18.
The 2004 Medical Expenditure Panel Survey (MEPS) findings released today by the Agency for Healthcare Research and Quality provide data on the uninsured, including detailed breakdowns by subpopulation groups. These breakdowns are intended to help policymakers and others understand health insurance status in detail.
According to the 2004 survey, for adults under age 65:
* White non-Hispanics made up 65 percent of the U.S. population and almost 50 percent of the uninsured. About one in seven whites was uninsured, and 10 percent had only public insurance.
* Black non-Hispanics made up almost 13 percent of the population and almost 15 percent of the uninsured. About one in five blacks was uninsured, and 28 percent had only public insurance.
"These results confirm the urgency of identifying effective policies to expand access to care for all Americans, particularly Hispanics," said AHRQ Director Carolyn M. Clancy, M.D. "The MEPS is a unique resource for evaluating the impact of proposed solutions for different populations."
Findings on uninsured Americans in a given year are often presented in three ways: people uninsured for a full year, those ever uninsured during a year, and those uninsured for a specific point in time. The MEPS provides data for all three categories and also covers a 2-year period. The data provided in this most recent MEPS release reflect insurance status for a specific point in time�the first part of 2004.
Additional MEPS data from the first part of 2004 show:
* For the population under age 65, 19 percent (48 million) were estimated to be without health insurance.
* For children under age 18, nearly 12 percent (8.5 million) were uninsured. These most recent estimates of children without health insurance were significantly lower than estimates from the previous decade, mostly due to public insurance expansions aimed at children, including Medicaid and the State Children's Health Insurance Program.
* Young adults aged 19-24 were at greatest risk of being uninsured, with 35 percent having no insurance coverage for the first part of 2004. Furthermore, this lack of coverage was worst for young Hispanic adults, with 56 percent uninsured.
Details about the uninsured are in several statistical briefs just released by AHRQ, including The Uninsured in America, 2004: Estimates for the U.S. Civilian Noninstitutionalized Population under Age 65; The Uninsured in America, 1996-2004: Estimates for the U.S. Civilian Noninstitutionalized Population under Age 65; and Health Insurance Status of Children in America, 1996-2004: Estimates for the U.S. Civilian Noninstitutionalized Population under Age 18. Furthermore, a set of charts illustrating more detailed summaries of the data mentioned in this release exists.
About MEPS: AHRQ's expenditure survey collects information each year from a nationally representative sample of U.S. households about health care use, expenses, access, health insurance coverage, health status and quality. It is unique in its degree of detail and in its ability to link data on health spending and health insurance to various characteristics of individuals and families. People surveyed by MEPS are followed for 2 consecutive years, providing additional depth and value to its data, especially in differentiating between short-term lack of insurance and persistent lack of insurance.
MEPS data are publicly available for use by researchers, policymakers and others at www.meps.ahrq.gov Analytical tools to enhance the usability of the survey also are provided on the MEPS Web site. These include MEPSnet, a menu-driven analytic tool that allows customized tabulations to be produced in real time in a non-programming environment , and the MEPS Household Compendia of Tables which present detailed national estimates from the MEPS Household Component in tabular form.
About federal health insurance surveys: Information about health insurance status is collected as a part of several different federal surveys. As part of broader surveys, these efforts examine different aspects of the problem, while also providing the benefit of validation for one another's findings. The data provided today reflect insurance status for a specific period of time. By comparison, the often-cited health insurance data provided as part of the Census Bureau's annual Current Population Survey are estimates for full-year lack of insurance.
Warning that California�s health care system is in a �death spiral,� Insurance Commissioner John Garamendi on Wednesday unveiled a comprehensive report outlining his plan to begin reforming the system and bring universal access to health care, according to a press release.
The report, �Priced Out,� details serious problems facing Californians as rising costs burden the entire health system and fray the safety net. Its findings will be used to provide the framework for the concerted effort by Commissioner Garamendi to begin reform of the system and to lay the groundwork for universal access to health care.
During a news conference at Joe�s Pharmacy in San Francisco�s Richmond district, the Commissioner announced that he will hold a hearing in San Francisco this September to address the issues of large deductibles, health savings accounts, and what he calls �skeletal� policies. These policies offer a reduced level of coverage for people priced out of the system, but often at a cost to their long-term health and the overall stability of the health care system.
�There is no more glaring example today of what ails our society than the broken and deteriorating health care system,� Commissioner Garamendi said. �It is being choked by rising costs that have little relation to the ability of employers and patients to pay. This system is well on its way to collapse, and we are all bearing the brunt of its failure.�
Garamendi was joined at the pharmacy by Tony Bastian, owner of the business, whose health care premium for his family and one employee costs $1,100 per month.
Beth Capell, the legislative advocate for �Health Access,� California�s consumer coalition on health care, also attended, as did three consumers who are �priced out� of the health insurance market.
Barbara Brinkerhoff, a 54-year-old San Francisco consumer, shared her nightmare of $36,000 in unpaid bills for surgeries and medicine that she now faces after two years of being unemployed, prior to finding work this April. �My medical bills are so horrendous I don�t know how I�m going to be able to pay them off without possibly filing for bankruptcy,� she said.
The report�s information will help shape the reform effort. Much of the report was generated from a series of high-level health care forums with industry and medical experts from around the state and nation. They included labor and consumer groups, legislators, principals from major health care trade associations, CEOs of health plans, and representatives from pharmaceutical companies.
The report shows that 6.6 million Californians currently have no health insurance at all; premiums for private coverage have soared 60% in the past four years; and families and individuals with coverage are struggling as employers are forced to transfer more of the cost of insurance to their employees.
It also shows that the distribution of the health care dollar is a significant factor in the dysfunction of the system. Nationally, administrative costs account for 31 cents of every dollar spent on health care.
�It is unconscionable that administrative costs are sapping this system of nearly one-third of every dollar, severely limiting resources that could go to patient care,� the Commissioner said. �Some 2,500 people in this state die each year because they have no health insurance, while the crushing financial burden on employers is dampening our economy. We simply must act now.�
He noted that federal and state budget crises leave virtually no new public money to address these problems. �Unless we right this ship,� he said, �we will see a future in which insurers offer inadequate policies that cover fewer services to an ever-shrinking pool of people who can afford them.�
The report contains not only an extensive analysis of the system and its problems, but a series of specific recommendations and action points designed to change fundamentally how health care is delivered. It advocates the creation of a universal health care system, a health program that covers everyone regardless of income, zip code or racial and ethnic characteristics.
In September, the Commissioner will convene a public hearing in San Francisco to address the proliferation of reduced benefit, or �skeletal� health policies. While such policies do provide a measure of coverage for some who would otherwise go without, they do not provide the basic, comprehensive medical care that is essential to building a sustainable health care system.
A second hearing in Los Angeles, later in the year, will focus on how much of each premium dollar goes to providing care for individuals. �It is clear from my report that health insurance companies keep too much of the premium dollar, fattening their executives� wallets and Wall Street purses at the expense of patients and doctors,� said Commissioner Garamendi.
�The structure of compensation for health insurance companies, as well as for the executives who run them, is a major factor in the dysfunction of this current system. We must find a way to determine how much compensation is appropriate and rationally required to provide essential services,� the Commissioner said.
Through education, legislation and regulation, the Commissioner�s effort to reform the system will take focused steps to address immediate concerns, while building toward the long term goal of universal access to care. It will do so through a framework of the following guiding principles:
States, by offering reinsurance - essentially insurance for insurance companies - can make it possible for lower cost insurance to be offered to small groups or to individuals, according to a Commonwealth Fund report.
Small groups can pose great risks to insurers. Therefore, small group and individual medical insurance often is more expensive than large group insurance. States, through reinsurance, can spread those risks - making them easier for insurers to handle.
According to Harvard School of Public Health Professor Katherine Swartz., the author of the report, Reinsurance: How States Can Make Health Coverage More Affordable for Employers and Workers, New York and Arizona already have adopted reinsurance programs.
Her report aims to inform readers about the mechanics of reinsurance, the experience these two states have had with their programs, and issues states should consider before implementing reinsurance programs.
Governor Joe Manchin III has announced AccessWV, a new, high-risk benefit pool for West Virginians who cannot obtain medical insurance elsewhere, according to the Insurance Journal.
According to the plan overview, AccessWV began operations on July 1, 2005 and coverage for the rst enrollees begins on August 1.
Coverage extends to West Virginia residents who meet specified conditions - generally those who cannot obtain insurance elsewhere. The plan overview specifies these conditions.
According to the Heritage Foundation, "The House of Representatives will soon consider a major package of health care bills. The package, if enacted, would significantly improve the functioning of America�s health insurance markets and establish a solid foundation for further transformation of America�s health care system."
This is the same legislation, which the Georgetown University Health Policy Institute called "a license to steal."
The association health plan legislation before the House would, among other things, for health insurance offered by associations such as Chambers of Commerce or trade associations, replace current state regulation with new federal regulation. This new federal legislation would be less strict than often stringent state regulations.
While Georgetown University says this looser regulation would encourage abuse; the Heritage Foundation says is would make insurance less expensive.