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Be wary of these claims

POSTED: March 27, 2008 5:00 a.m.

For years, Republican legislators and small business owners have wanted to scale back the benefits that group health insurance plans are required to offer in Georgia. They contend that employers should be free to choose plans that are more affordable even if it means workers have to pay for preventive care and basic medical services out of their own pockets.

This year, state GOP leaders, including Gov. Sonny Perdue, are providing an extra push for the proposals by offering tax breaks to businesses and individuals who purchase health plans that would not come with a list of required benefits. They hope that by allowing workers to put away money in tax-free savings accounts, they will buy these new plans, which don’t kick in coverage until consumers have already paid out hundreds —- in some cases thousands —- of dollars from their own pockets for routine and preventive care.

Several bills to encourage enrollment in high-deductible plans and health savings accounts are at critical stages in the 2008 session. One of them passed the Senate last week. Another awaits floor action in the House. The Legislature should proceed cautiously with these attempts to "reform" the state’s health insurance market.

The concept has some appeal, especially to middle-income workers and their families who are healthy and could potentially save in lower premium charges. But the combination of health savings accounts and high-deductible plans is no panacea for the vast majority of the state’s 1.7 million residents not now covered by health insurance. To expect them to be able to sock away thousands of dollars for preventive and routine care is unrealistic. Plus, many low-wage workers now covered on the job might switch from better, comprehensive plans to the cheaper plans, and then not be able to afford the out-of-pocket expenses when they or their families need care.

Hospital officials say they are beginning to see more and more patients who are "underinsured" —- not able to pay off the deductibles or co-payments required under their plans. Add them to the demands placed on hospital emergency rooms to treat uninsured patients who need care, and an already bad situation could get even worse.

Experience in other states shows that about 80 percent of the workers who have switched to high-deductible plans were previously covered by a traditional plan. Only about 20 percent of the new enrollees were not covered by a plan when they signed up.

While high-deductible plans are a favorite of Republicans, health policy experts disagree over their real value. Premiums can be significantly less than traditional plans —- often a reduction of 40 percent to 50 percent —- but the trade-off comes in what consumers must pay out of their own pockets for medical care. Many of the plans call for $2,000 to $5,000 annual deductibles, at least double that amount for family coverage. Unlike traditional plans that cover most preventive services —- like cancer screening, contraceptives and well-baby care —- consumers in the lowest-cost plans have to foot those bills on their own. That’s why advocates for the plans want to team them up with health savings accounts as well as tax breaks for employers, insurers and workers who choose to enroll in them.

But Janice Barrocos, lobbyist for the Women’s Policy Group, worries that marketing for the high-deductible plans will emphasize the low price and gloss over the lack of comprehensive benefits, giving consumers "the illusion of coverage." The Georgia advocacy group has examined the bills being considered by the General Assembly and found that of the $40 million in tax credits the state would grant under one of the bills, $25 million will go to insurance companies writing the policies, $11.9 million to employers offering the plans and just over $1 million to consumers.

If the state is willing to cut insurers that kind of tax break, it ought to at least make them cover preventive services, as well as provide a detailed list of benefits and a complete disclosure of the full costs of their plans to Georgia consumers.

Proponents of the plans often tout how they put consumers in charge of their own health care. But despite years of talking about it, there is still a dearth of publicly available, consumer-friendly information that allows for comparisons of hospital and doctor prices or the effectiveness of their care.

"We are a long way from the time where consumers can make cost-effective decisions," said Bill Custer, a health insurance expert at Georgia State University. Unfortunately, that’s also the case about judging the benefits and costs of high-deductible health insurance plans and health care savings accounts.

The Legislature should be wary of claims that these plans will help reduce the number of uninsured Georgians or lower the costs for many of those already covered.



The Atlanta Journal-Constitution

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