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Health-Care Plan May Drive Up Deductibles, Officials Say

Posted on: Wednesday, 9 November 2005, 18:00 CST

By Associated Press

The health insurance bill passed last week could affect other insurance plans as employers seek ways to hold down costs, officials say.

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BOSTON - The legislative effort to provide health care coverage for all of the state's uninsured could have an effect on other insurance plans in the form of higher deductibles, officials say.

Governor Romney and other state leaders have proposed covering a half-million state residents without health insurance with high- deductible plans, requiring them to pay up to the first $1,000 of their annual health-care bills in exchange for lower monthly premiums.

The state's health maintenance organizations may then expand similar programs, attractive to employers who have had to deal with five consecutive years of double-digit premium hikes.

"This is a paradigm shift. It wouldn't be surprising to me that you will see a lot more people actively taking these things up," said Timothy Murphy, secretary of health and human services. "Large employers that we speak to are exploring a number of different options."

Already, about 60,000 state residents are enrolled in high- deductible plans, according to industry estimates.

A Fidelity Investments survey last week indicated that of 86 large national companies, 45 plan to offer such plans.

Critics of high-deductible plans say they encourage consumers to skip routine visits to the doctor as well as vital preventive care, including pap smears and mammograms.

They are also concerned that the plans would be more attractive to the most healthy, leaving a higher concentration of high-risk patients in traditional plans and making their coverage even more expensive.

While efforts to provide coverage to the uninsured are good, expanding the use of high-deductible plans may not be, said John McDonough, executive director of Health Care for All, an advocacy group.

"We call it faith-based health insurance. You're supposed to pray you don't get sick, because if you get sick, you're in trouble," he said.

That would not necessarily be the case, said Stuart H. Altman, a Brandeis University professor of national health policy. Some insurance companies are enhancing high-deductible plans by providing coverage for primary care visits and needed tests.

A House health-care bill approved last week requires individuals to buy insurance if they can afford it. It also expands the number of people covered by the state's Medicaid program, attempts to close racial and ethnic gaps in coverage, and requires some businesses to pay into an insurance fund.

That and other proposals include low premiums, which cannot be met without higher deductibles, larger co-payments and some coverage restrictions, insurance executives say.

"We believe that to make premiums affordable, using the kinds of numbers that the governor and the legislators have referenced, it is going to require deductibles and other elements of benefits restrictions," said Jon Kingsdale, senior vice president at Tufts Health Plan, which currently has about 10,000 enrollees in its high- deductible plan that is coupled with health savings accounts.

Source: Providence Journal

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