‘Skeletal’ benefits in doubt
Critics say cut-rate policies offer little coverage in need
By Victoria Colliver
San Francisco Chronicle
September 21, 2005
As health care costs soar, insurers are offering a growing array of low-cost policies with high deductibles and limited benefits.
Now, some public officials are questioning the value of those plans, and specifically whether they give consumers access to health care at a price they can afford.
In a hearing Tuesday in San Francisco, state Insurance Commissioner John Garamendi explored the issue, gathering testimony from insurers, physician groups and hospital groups in an effort to determine whether tougher standards should be set for policies with so-called skeletal benefits.
Such plans include those with strict caps on costs for hospitalization and medical events, as well as those that offer no coverage for maternity and other conditions. Some high-deductible policies generally come with tax-deferred savings accounts that can belong either to the employer or to the employee.
“As a regulator, I am troubled to see the floor of standard benefits eroding,” said Garamendi.
Inexpensive bare-bones plans might be attractive to consumers, but “it’s all well and good until you happen to need that coverage,” Garamendi said. Such policies could lead to bankruptcies and draw younger and healthier people out of insurance risk pools, causing more comprehensive policies to become more expensive, he said.
Representatives from the insurance industry said health plans are simply responding to the marketplace by creating more-affordable policies that give consumers more control in making health care decisions.
“The concern we have is people seem to be priced out of health insurance,” said Anne Eowan, of the Association of California Life and Health Insurance Companies.
Comment: Tragically, the insurers, in preventing premium increases that would price their insurance products out of the market, are pricing patients out of health care.
Why do we leave them in charge? What saving grace is there that should cause us to continue to support market competition of private insurance plans over a universal program of public social insurance?
There is a saving grace for the latter: our health.