You May Have to Change Health Plans If There Is NO Health Reform

During yesterday's address to Congress on health care reform, President Obama reassured the American people that health reform would not push them out of the health plan they like:

"First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.

"What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies — because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

"That's what Americans who have health insurance can expect from this plan — more security and stability." [Emphasis added]

That is absolutely true, but what he didn't warn us about is the fact that we are more likely to have to change plans if health care reform is derailed, so let me elaborate on the "more stability" part of his statement. Currently — without health reform — people lose or are forced to change their health insurance fairly frequently.

According to new data from the U.S. Census, the number of uninsured nationwide rose to 46.3 million people in 2008, up from 45.7 million in 2007. And that was before this recession led so many people to lose the source of their health coverage — their jobs.

Six months ago, the Center for American Progress (CAP) Action Fund released a report (PDF) showing 14,000 people were losing health coverage every day since the recession began: "An estimated 4 million additional Americans have lost their health insurance and 2 million have become uninsured."

But hard economic times are not the only reason people lose their health insurance. CAP also found that during the six years of the last economic expansion, the number of uninsured Americans grew by 7 million.

Of those lucky enough to have health insurance, a study published in the health policy journal Health Affairs, Health Plan Switching: Choice Or Circumstance?, (PDF) found that nearly one in five (17%) privately insured persons changed their health plan and most people who changed their health plan (72.2%) did so for reasons beyond their control:

  • about one-third (31.9%) changed health plans because they changed employers;
  • another third (36.3%) had to change health plans because their employer changed the plans offered; and
  • about 4% changed health plans because of a change in their eligibility, usually a change in marital status or eligibility for a parent's plan.

Less than one-fourth (24%) changed their health plan because of some desired attribute of the new plan:

  • 16% changed to a plan that was less expensive; and
  • about 8% changed to a plan that had better services, higher quality, preferred doctors, or more convenient locations.

Employers are increasingly changing their health benefits and shifting more costs to their employees in an attempt to keep costs down, but the are not succeeding. A report by the Commonwealth Fund found that employer-sponsored health insurance premiums increased 119% from 1999-2008 and projected that they would double again by 2020 (see illustration below).

The Kaiser Family Foundation's 2008 Employer Health Benefits Survey (PDF) found that employers are shifting higher health insurance costs to their workers in the form of higher cost-sharing, not just higher premiums:

"From 2007 to 2008, the general annual deductible for workers in PPOs with a deductible increased from $461 to $560 for single coverage and from $1,040 to $1,344 for workers with an aggregate deductible for family coverage... Overall, the percentage of covered workers in a plan with a deductible of at least $1,000 for single coverage has grown from 10% to 18% over the last two years and, among small firms, the percentage of covered workers with a deductible of at least $1,000 has increased from 16% to 35%."

The Commonwealth Fund report goes on to point out the need for health care reform to control those costs:

"'These rapid premium increases aren't sustainable for families or employers,' said Commonwealth Fund President Karen Davis. 'If we craft patient-centered reform that focuses on improving quality and efficiency and bending the cost curve, the insured in every state stand to benefit. We could assure coverage and, over time, make more money available for wages, retirement, and other family needs.'...

"[N]ational reforms that slow health care cost increases by 1 to 1.5 percent per year would yield substantial savings for families and businesses across the country. By 2020, slowing the annual rate of growth by 1 percent would yield more than $2,500 in reduced premiums for family coverage, and slowing growth by 1.5 percent would yield more than $3,700 in premium savings compared to projected trends."

Will reform guarantee you will never have to change plans? Of course not, but you don't have that guarantee now. (If you truly never want to have to change health plans again, you should be pushing for single-payer reform, like Medicare for All.)

What reform can do is lower costs — and lower costs means less need for employers to change their health plan offerings. So if you are afraid of having to change your health insurance plan, you should be pushing for health care reform. It is your best chance to keep the health plan you have if you like it.

09-10-09 By Monica Sanchez | Comment (0)


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