California Individual And Group Health Insurance Plans

The Los Angeles Times - By Ricardo Alonso-Zaldivar, Times Staff WriterOct. 25: Frustration with the rising costs of health coverage surged sharply this year, helping to explain why many voters remain uneasy about the economy despite falling gasoline prices, low unemployment and a soaring stock market.The annual Health Confidence Survey, released today by the nonpartisan Employee Benefit Research Institute, found that more than half of those surveyed 52% were dissatisfied with health insurance costs, a sharp increase from 33% last year.About 6 in 10 said costs of their health plan such as premiums, deductibles and co-payments had gone up in the last year. Of those who said their costs had risen, more than half said they were saving less as a result. Retirement plans took a big hit, with 36% of those who reported higher costs over the last year saying they had reduced their contributions to 401(k) plans. Of that group, 28% said that because of health-related costs, they had trouble paying for such basic necessities as housing, heat and food."While people are employed, they don't feel particularly good about their situation, and that ends up influencing how they respond to questions about the economy," said Dallas L. Salisbury, president of the institute, a research group funded by employers, healthcare companies and labor unions.Earlier this month, an ABC News/Washington Post poll found that 45% of Americans viewed the economy as getting worse, whereas 17% saw improvement and 36% said conditions would remain the same. "Individuals are not seeing their real income go up because their employers are spending more on healthcare," Salisbury said. "And individuals themselves are spending more on healthcare."The institute's poll found that workers regard their employer-sponsored coverage as an ever more valuable benefit, even as many new jobs come with no coverage and employers cut back or drop existing plans. Overall, the proportion of employees covered by a company plan dropped from 81% in 2001 to 77% in 2005.Asked to choose between a $6,700 raise and employer-sponsored health insurance, 75% of those polled picked the health plan. Of those, 13% said no raise would be big enough to persuade them to give up their coverage. The average cost of employer-provided coverage was about $6,700 per worker in 2004. It has since gone up to more than $7,100.After annual increases in health insurance costs hit double-digit rates in 2001, employers responded by passing an increasing share of the burden on to workers in the form of higher deductibles and co-payments. Such measures have slowed cost increases for employers, although they are still running at about twice the rate of overall inflation."There is a continuing shift," Salisbury said. "Even some of the companies in the unionized sector have introduced cost-sharing for the first time ever. Employees who were paying nothing are now paying something, and those who were paying something are paying more."The telephone poll of 1,000 adults was the ninth such annual survey, and has a margin of error of plus or minus 3 percentage points. Separately, two studies published Tuesday offered mixed reviews for President Bush's main healthcare proposal. The White House is encouraging Americans to consider so-called consumer-directed plans, which feature low-cost insurance for major medical expenses with a tax-sheltered "health savings account" to cover the cost of routine care.A Rand Corp. report found that such plans could help cut spending and slow the rate of cost increases by reducing the use of medical services 4% to 15%. However, individuals may offset some of those savings by spending more out of their health savings accounts. The researchers said more study would be needed to determine whether the savings would be a one-time phenomenon or an enduring trend.The second paper, by the California HealthCare Foundation, raised concerns about how such plans would accommodate people with chronic illnesses, who account for a high proportion of all costs. It urged insurers to consider full coverage of certain medications, such as drugs used by diabetics to control blood sugar. That may help prevent patients with chronic conditions from cutting back on needed care and risking costly complications.About 3 million people are enrolled in consumer-directed plans, but the number is growing rapidly as large employers add this option to their benefits. The two studies were published on the Internet by the journal Health Affairs.