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Low-cost health plans often mean high-cost treatment

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Three million Californians in 2007 were enrolled in high-deductible health plans of $1,000 or more, which can cause policyholders to delay care, according to a report released yesterday by UCLA researchers.

The UCLA Center for Health Policy Research examined the health plan enrollment of the state's nearly 32 million insured residents, looking at what types of insurance they had and how they utilized those plans. The findings are based on the most recently available data in the California Health Interview Survey.

Insurance policies offer lower monthly premiums in exchange for higher deductibles – some greater than $5,000 a year – on services. But for many Americans, particularly those with low incomes or who are self-employed, these plans are often the only coverage they can afford, researchers said.

"Many Californians can't afford higher-premium plans, especially in the current economic climate," Dylan Roby, a research scientist at the center and the report's lead author, said in a statement. "But the alternative – high-deductible plans – may cost less initially, but can cost thousands of dollars when you need health care. When that much money is on the line, a health emergency can also become a financial emergency."

High deductibles were most common among members of preferred provider organizations, or PPOs, where 28 percent reported out-of-pocket costs of $1,000 or more for individuals or $2,000 or more for families.

The report looked at commercial health-maintenance organizations as a whole and specifically Kaiser Permanente, which covers 40 percent of the HMO market in the state. Among Californians enrolled in a commercial or Kaiser HMO, 14 percent and 12 percent, respectively, had high-deductible policies.

Low-income residents were more likely to have higher deductibles in both HMO and PPOs. The vast majority of residents with high-deductible health plans did not have health savings accounts that could cushion unexpected health costs.

One in five Californians enrolled in a high-deductible PPO reported delays in health care, with half saying costs were the reason, Gina Nicholson, one of the report's authors, told the San Bernardino Sun. By comparison, 17 percent of PPO policyholders without high deductibles delayed care.

Overall, many Californians have delayed medical care because of costs. Among those enrolled in HMOs, 33 percent in 2007 reported delaying treatment in the past year. The rate was higher for those in other plans (44 percent) and highest among the uninsured (87 percent).

The number of Californians enrolled in PPO plans is on the rise, from an estimated 7.6 million in 2003 to 8.8 million, or 28 percent of the state, in 2007. California leads the nation in HMO enrollees, with just over half of its residents in a commercial or public HMO plan. An estimated 4.8 million Californians – 13.2 percent of the population – were uninsured in 2007.

The findings underscore the need to educate consumers about the actual costs of their health insurance choices, the report said.

California is currently establishing a "health benefits exchange," as part of the new federal health law. The law will provide health coverage for an estimated 93 percent of Californians and will cap out-of-pocket deductibles at $2,000 for individuals and $4,000 for families.

 

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Anne C's picture
Another problem with having a high deductible health plans is that you and your family cannot get the adequate care that they need. Often times what happens is you avoid doctor visits dismissing your symptoms as trivial because you can't afford the fee. It's better to get the simple and reliable HMO plans that will only require you to pay a small amount of copay. Anne C NY Health Insurer

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