WellPoint advocates shift to underinsurance
Not in poverty but not insured
By Tim Evans
The Indianapolis Star
April 22, 2007
More than one-third of the 46 million uninsured in the United States live in families with incomes of more than $40,000. The nation’s median household income was $46,326 in 2005. These people are among the fastest growing subgroup of uninsured today.
(N)ational surveys show the largest increase has been among families earning $30,000 to $39,999. The number of uninsured in that group rose 31 percent from 2000 to 2005, and the ranks of the uninsured among families earning $40,000 to $49,999 increased 25 percent.
For many trying to enter the individual coverage market, the cost can cause sticker shock, said Jessica Waltman, vice president of policy and state affairs with the National Association of Health Underwriters.
“Many of these people are coming from a situation where they had group coverage and the employer picked up all or at least the lion’s share of the cost,” she said. “Often, they have no idea of what insurance really costs.”
Rates for individual policies can run anywhere from a few hundred dollars to more than $2,000 a month — depending on a person’s age and health history — and consumers are facing ever-increasing deductibles and out-of-pocket spending.
Jude Thompson, president of individual markets for WellPoint, the nation’s largest health insurer, said the traditional one-size-fits-all approach to marketing insurance no longer works.
“That’s one of the big reasons why we’re where we are today with the uninsured,” he said. “Companies need to change the way they are talking about insurance and offer different products with different price points. We need products that resonate with the different age and income groups and hit the mark with people who can and want to purchase insurance.”
http://www.indystar.com/apps/pbcs.dll/article?AID=/20070422/LOCAL/704220439/-1/ZONES04
Comment:
By Don McCanne, MD
The lack of insurance has now become a problem for families with median household incomes. It is the fastest growing sector of the uninsured.
The crescendo call for universal health care coverage is now heard everywhere. And the private insurance industry is not deaf.
Private insurers cover primarily healthy members of our society: the healthy workforce and their healthy families, and healthy individuals who pass medical underwriting standards. Yet the cost of insuring the healthy alone has resulted in premiums that are much less affordable for average-income families. The private insurers are not only threatened by the prospect of covering higher-cost individuals currently excluded from their plans, they can’t even provide affordable comprehensive coverage for the healthy.
To survive, the private insurers must continue to restrict their markets to the healthy, while supporting public policies that shift the real costs of health care to the taxpayers. Also, and this should set off alarms throughout our nation, they must continue to create more products that are affordable for the healthy by dramatically reducing the financial security that health insurance should be providing. Since their administrative costs are fixed or even increasing (selling new administrative products such as disease management, HSA administration, credit card services, etc.), the reduction in premiums must come from a greater reduction in benefits paid out for health care services.
Thus WellPoint is pushing “different products with different price points” and “products that resonate with the different age and income groups and hit the mark with people who can and want to purchase insurance.” Thus WellPoint is supporting explicitly further fragmentation of risk pools, saving the healthiest of the healthy for its own industry.
Ironically, many of these healthy individuals eventually will develop significant medical problems before they are eligible for Medicare at age 65. Unfortunately, those individuals who “hit the mark” with “low price points” will discover the definition of underinsurance: Their insurance will have failed to provide them with adequate financial security in the face of medical need.
The private insurers are selling us ever more administrative services just to provide an increasing amount of underinsurance for the healthy, while supporting public policies that shift the real costs of health care to the taxpayers. That is not where we should be headed in our efforts to improve health care coverage.
Why do we continue to put up with this? Many say that our politicians have been bought off by the insurance industry lobbyists. But it’s not quite that simple. (For the 2006 elections, Sen. Rick Santorum received the largest amount of campaign contributions from the insurance industry, yet lost his re-election bid.) The real inertia comes from financially-secure, higher-income individuals who still do have comprehensive health plans, and who are concerned about potential compromises that they believe might be part and parcel of a national health insurance program.
That’s some inertia. How are we going to budge that?