Do Some Pay Too Little for Health
Care?
October 26, 2003
By DAVID E. ROSENBAUM
WASHINGTON - Consider what would
happen if employers paid
for their workers' car insurance and if that
insurance
covered routine maintenance. No doubt, the cars would
spend
a good deal more time in the shop, and the price of
repairs
and the cost of auto insurance would skyrocket.
By the same token, some health policy
experts say,
Americans see doctors more often, have more
procedures and
take more medicine than they need because most, if
not all,
of the cost is covered by insurance.
"When consumers don't have to pay any
regard to price, they
overconsume," said Kate Sullivan, director of health
policy
at the United States Chamber of Commerce. "You get
more
value for what you buy when you have a stake in it."
But there would be another
consequence if people's cars
received more service: they would run a lot better
and last
a lot longer. This analogy may also apply to health
care.
"People who have affordable and good health insurance
get
good preventive care and treatment when they need
it," said
Christine Owens, a health policy specialist at the
A.F.L.-C.I.O. "People who don't have good, affordable
health care delay treatment and are in poorer
health."
The question of whether Americans
should have to pay more
of their health care expenses out of pocket has
become a
central one in labor negotiations and in the
political
debates here and in state capitals. More than 80,000
supermarket workers are now on strike in California
and
four other states over proposed cuts in their medical
benefits. Transit workers in Los Angeles and garbage
workers in Chicago also walked out this month over
changes
in their health insurance.
Workers at Verizon and the Big Three
automakers agreed to
much smaller pay raises than they might have expected
this
year so that their contracts would retain health
plans
allowing them to pay little or nothing for
comprehensive
health coverage.
In Congress, negotiators are
struggling over what the
elderly should pay if prescription drugs are covered
under
Medicare. They are considering charging people who
are on
Medicare for part of the cost of home visits by
health
aides.
Faced with spiraling costs for
Medicaid, the federal-state
health insurance program for the poor, many states
have
begun requiring low-income adults and the parents of
children covered by the State Children's Health
Insurance
Program to make co-payments when they receive medical
treatment.
"The public is more worried about
their rising health care
costs than they are about anything else - even about
their
mortgage payments or whether they will lose their
savings
in the stock market," said Drew Altman, president of
the
Kaiser Family Foundation, which conducts opinion
polls
about health matters.
But many economists, liberals and
conservatives alike, have
concluded that health costs will continue to rise out
of
control unless patients are required to pay more out
of
pocket for the services they use.
"As we've moved away from managed
care as a cost-control
device, we have no choice but to move to higher
deductibles
and co-pays," said John F. Holahan, director of the
Health
Policy Center at the Urban Institute, a research
group in
Washington.
The latest Kaiser study shows that
workers are dipping into
their wallets more often these days to meet medical
expenses. Since 2000, the average annual cost of
insurance
premiums has risen to $9,068 from $6,230 for family
coverage, and the worker's average share is now
$2,412, up
from $1,619, an increase of nearly 50 percent.
Co-payments
(what patients pay out of pocket for each service)
and
deductibles (the annual amount people must pay before
insurance kicks in) have also risen.
What insured workers actually pay for
health care varies
widely. The average deductible is $275 for people in
preferred-provider organizations, the most common
type of
health plan, but for workers in small companies, it
is
almost $500. Co-payments for doctor visits range from
$5 to
more than $25, depending on the plan.
But in almost all cases, the expense
is not so great that
workers change their behavior - not enough, say, for
most
patients to ask doctors in advance what they charge.
Jonathan Gruber, an economist at the Massachusetts
Institute of Technology who was a deputy treasury
secretary
in the Clinton administration, argues that to limit
overuse
of health care, people should have to pay enough of
the
cost out of pocket that it pinches. Perhaps poor
people
should be exempt from cost sharing, he said, but
"people
with union contracts are affluent enough that they
can
afford some co-pays."
Some economists disagree with Mr.
Gruber. Market principles
do not apply to health care, they say, because most
people
believe good health is priceless.
"If you make people pay more for
their health care," said
Uwe Reinhardt, a health economist at Princeton, "all
you
are doing is rationing health care according to
income.
People like you and me would continue to get all we
want,
and those without means would have to do without."
Some economists who are comfortable
with the principle of
making people pay more are not sure how much it would
take
to keep overall costs down, because all insurance
plans
would still cover catastrophic expenses. A large
proportion
of total costs are attributable to a relatively small
number of people who are very sick, and their bills
generally exceed the ceiling on catastrophic
expenses.
There is no conclusive evidence that
people's health would
deteriorate if they were charged more for care. Mr.
Gruber
said he was convinced that "the health gains" from
generous
health insurance "are not large enough to justify the
additional costs in aggregate."
But Mr. Reinhardt was skeptical and
fell back on the auto
insurance analogy. "When I was young and could not
afford
regular maintenance, my cars constantly broke down,"
he
said. "Now my cars run forever."
http://www.nytimes.com/2003/10/26/weekinreview/26ROSE.html?ex=1068186617&ei=1&en=1a22767e51184ebd
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