Lowering Financial Burdens and Increasing Health Insurance Coverage for Those with High Medical Costs
By Linda J. Blumberg, Lisa Clemans-Cope, and Fredric Blavin
The Urban Institute
December 2005
Health care expenses associated with high-cost medical cases in the United States are increasingly being shifted to the individual, a phenomenon exacerbated by recent trends in product design.
As the costs of medical care are spread less broadly, financial burdens for seriously ill individuals with high medical costs can increase dramatically. This brief identifies evidence of the severity of these problems and presents policy options designed to address them.
Policy Options
While the government can subsidize those with high health care needs in many ways, we categorize those options into two general groups: (1) approaches that subsidize coverage obtained through existing private insurance carriers; and (2) approaches that subsidize coverage in an insurance context distinct from existing markets and open only to individuals (and possibly their dependents) that qualify based on health status. In this brief, we outline one policy option in each general category as examples of initiatives that can improve the coverage and access to care of those with high-cost illnesses. Both options discussed here specifically target individuals whose health care costs constitute a large share of income and minimize disruption of existing private insurance systems.
Option 1. Assignment of Risk to Existing Insurance Carriers Combined with Government Subsidies
Option 2. Federal Financing of State High-Risk Pools Combined with Federal Guidelines on Benefits and Eligibility
Neither policy option described in this brief would be considered a minor, incremental reform. Either would lead to a significant redistribution of private costs and would increase public spending on health care. However, both approaches can be implemented incrementally, for example, by initially targeting even one chronic disease or condition, such as diabetes.
Regardless of the approach taken, the need is clear. Mounting empirical evidence, policy research, and reports in the popular press attest that the U.S. health care system is currently inadequate to ensure access to care for those with the greatest health care needs. Many insured as well as uninsured high-cost individuals are at financial risk and at risk for poor health outcomes as a result.
http://www.urban.org/UploadedPDF/311261_financial_burdens.pdf
Comment: This health policy brief describes well the financial burdens and impaired access to care faced by those with significant medical needs, including those who are insured. Unfortunately, the policy recommendations fall woefully short and will never ensure affordable access and coverage.
It is not as if we have no experience with their recommendations. Previous efforts to risk adjust the Medicare + Choice (Medicare Advantage) options have been deferred indefinitely because of technical difficulties and insurer resistance, even though the concept remains in play as a desirable goal. Likewise, high-risk pools already exist but have been successful in insuring only about 180,000 individuals nationally, hardly a policy triumph.
It is amazing that the authors of this report consider these failed policy approaches to be much more than minor, incremental approaches. To appease the incrementalists, they suggest that these policies could be adopted for a single disease!?
Enough kowtowing to the incrementalists! The deterioration in affordability, coverage, and access is accelerating so rapidly that the incremental tweaks cannot possibly keep up with the rapid decline in security afforded by our private health plans.
What’s the next step? Do we apply two failed policies to diabetics, or shall we skip the incremental steps and adopt policies that would ensure affordable access to comprehensive coverage for everyone? Incremental steps increase health care spending whereas comprehensive single payer reform wouldn’t. Why are we still debating this?