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Health plans

Agriculture.com Staff 01/09/2008 @ 2:30pm

Health care ranks as the top domestic concern on the most recent Kaiser Family Foundation poll. In four early primary/caucus states, voters say it's the number one concern they want presidential candidates to address.

Health care premiums for employer-based insurance jumped 7.7% from 2005 to 2006. Since 2004, the ranks of the uninsured swelled by 2.6 million, reaching 47 million.

Small wonder that six in 10 surveyed in 2007 by the Employee Benefit Research Institute rated the U.S. health system as fair or poor.

Self-employed individuals face the greatest challenge. The Commonwealth Fund reports that only 11% of adults seeking coverage in the individual market from 2002 to 2005 were successful.

"Costs and barriers are highest in the individual market because companies screen out pre-existing medical conditions," says Karen Davis, president, The Commonwealth Fund.

A 2006 Commonwealth study found that 43% of adults with individual policies spent more than 10% of their income on medical expenses and premiums. Only 24% with employer coverage spent more than 10% for medical costs.

The 2007 Access Report Project survey of 2,000 farmers in seven Great Plains states shows that 90% of farmers in Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, and South Dakota reported household members were insured during the past year. "But many are underinsured, causing them to delay or forgo preventive care," says Bill Lottero, project codirector.

To lower premiums, Americans are turning to tax-advantaged financial accounts called Health Savings Accounts (HSAs), paired with high-deductible health plans (HDHPs).

"HSAs account for 90% of our individual plans," says Mike Durnil, president and CEO, United Insurance Services, Inc., Vincennes, Indiana. "Only 10% are traditional."

Companies must comply with a federal minimum deductible of $2,200 for a family HSA in 2008. "Our deductibles begin at $2,500 and go to $10,000," Durnil says.

Money is set aside in an interest-earning HSA linked to the plan to cover costs until the deductible is met. Then a catastrophic plan kicks in. Some, but not all plans, include a co-pay for doctor visits and drugs.

HDHPs/HSAs offer a higher maximum lifetime coverage limit and savings for future medical costs.

But a Kaiser Family Foundation report argues that HSAs and high-deductible health plans aren't more affordable for low-income families. In fact, high deductibles may shift even more costs to them. A study published by Health Affairs journal researchers at Rand shows that people in HSAs seek less care, even when it's appropriate.

"Most consumers don't have adequate access to information to make educated medical purchasing decisions," says Ray Scheppack, National Governor's Association.

That's beginning to change. Today, 38 states either require or encourage hospitals to publicize information on specific fees for inpatient and outpatient procedures. Aetna makes specialists' fees for the 30 most common services available to members in 15 markets.

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