More Fees, Less Health

With open enrollment coming up, Kaiser Health News' Michelle Andrews wrote an interesting article about how health insurance costs may increase for consumers with the new health care reforms in place. The potential costs, which will especially impact people with family coverage, include:

• Higher premiums and deductibles. Employers and insurers are passing on greater amounts of the cost of health insurance to their employees. "In the past five years, employees' premium contributions have grown 47 percent, while overall premiums increased 27 percent," wrote Andrews. Furthermore, over 25% of employees pay $1,000 or more in an annual deductible that must be paid before the insurer picks up any costs.
• Both co-pays and co-insurance. In addition to small, flat rate co-pays to visit doctors, some health insurance plans will also require people to pay a percentage of the total bill (co-insurance) for hospital stays, ER visits, and/or prescription drugs. Co-insurance is usually about 10% to 30% of the bill, according to a New York Times article on insurance changes.
• Surcharges for dependents. Some insurers will charge extra for each dependent on a plan. Other insurers might charge a surcharge for employed spouses who have access to other insurance through their employers, hoping to drive them off the family plan.

These extra fees seem especially painful in light of a recent Commonwealth Fund study that found that Americans are faring worse in health outcomes than their counterparts in other countries. The 30-year study looked at health care costs and 15-year survival rates for 45-year-old men and women and for 65-year-old men and women, in the United States and in twelve other wealthy nations.

"The United States now spends well over twice the median expenditure of industrialized nations on health care, and far more than any other country as a percentage of its gross domestic product (GDP)," wrote the study's authors, Peter A. Muennig and Sherry A. Glied, in the journal Health Affairs. Although U.S. survival rates have improved during the study time (1975 to 2005), the improvements were greater in the other countries in the study.

The study looked at the impact of population diversity, smoking, obesity, traffic fatalities, and homicides on the health of Americans, but found that these factors did not contribute significantly to the health differences between the U.S. and other countries. Instead, the authors concluded that the high cost of health care might be making the U.S. fall behind the other countries. For example:

• High health care costs have made insurance unaffordable for many Americans. The number of uninsured Americans rose during the study period, and going without health insurance affects both short-term and long-term health.
• High health care costs might divert money from important public health campaigns. "At current spending levels, investments in public health, education, public safety, safety-net, and community development programs may be more efficient at increasing survival than further investments in medical care," the authors wrote.
• Expensive fee-for-service care and the rise of specialized care might lead to unnecessary procedures and poor communication between a patient's different health care providers. Complications from unnecessary procedures and medical errors from poor communication might contribute to Americans' poor health outcomes.

Ideally, health reform will ensure that more Americans have health insurance, create incentives to support public health programs, and reward the medical community for focusing on cost-effective, coordinated preventative care. If consumers become healthier because of these initiatives, insurers will save money on treatment costs. But since we're not there yet, insurers still view Americans as unhealthy and costly, and will continue to charge them heftily for that.