Healthcare: March 2007 Archives

Anthem's parent company, WellPoint, is shaking up the health insurance marketplace with a new product targeting the young and uninsured with affordable coverage that they actually want and will buy.

According to a recent Business Week story, WellPoint "is winning hundreds of thousands of new customers with policies named "Part-Time Daredevil" and "Gravity Bender," offering basic coverage for as little as $67 a month..... Indeed, consumers are snapping up the novel policies that WellPoint markets, so far mainly in eight states. Sold on sites like Tonik.com and Soundhealth.com, they're a hit with those aged 19 to 29, and a big part of the way WellPoint has sold coverage to some 780,000 previously uninsured people in the last two years...The scaled-back individual policies WellPoint offers under the Tonik and Sound brands may cost as little as one-third of what employer-based group coverage does, but they cover as few as four doctor visits annually (with co-pays) and carry deductibles ranging as high as $5,000 (or $10,000 for services outside a network)."

So far, about 78 percent those buying Tonik plans were previously uninsured. And these policies cost receive no taxpayer subsidies - unlike DirigoChoice.

In Maine, due to costly insurance regulations, such policies could not be targeted in young people in such a cost-effective way. So Maine young people wanting affordable health insurance will have to move out of state, as Tonik is now available in next door New Hampshire and Connecticut.

That's not the way life should be - or needs to be.

Sometimes in Maine we seem to be the last to jump on board with national trends. HCA, a national for-profit chain of 165 hospitals, will "begin telling patients in advance how much they will pay," according to a story in the Tennessean. Both patients with consumer-directed health plans (plans combined with Health Savings Accounts) and the uninsured can get prices in advance and call HCA for estimates of their total cost of treatment.

Too often people complain about for-profit providers in health care. Isn't it interesting that a for-profit hospital chain seems to be most comfortable with posting its prices and is leading the push for greater price transparency in health care?

Maybe competition and the profit motive are positive factors in health care, just like they are in the other 5/6ths of the economy.

Not everything is negative with US health care and health care spending. Consider this information from the National Center on Policy Analysis:

BURYING GOOD NEWS

Health care costs are increasing at their lowest rate in nearly a decade, according to the latest report from the Center for Medicare and Medicaid Services (CMS), which each year reports on health care spending and offers its forecast for spending into the future.

For example:

* Health care spending growth in the United States slowed for the third straight year in 2005, increasing 6.9 percent.
* This marks the slowest growth rate in health spending since 1999, when enrollment in more tightly managed care plans peaked.
* And further slowing is expected when 2006 data are available.

For the most part, the mainstream media's coverage focused on the CMS' long-term projection that total health care spending will double by 2016. That does seem worrisome, but even here there is some good news buried by the press, says Investor's Business Daily (IBD). The forecast growth is down from last year's report:

* Last year, the CMS projected that national health spending would consume 20 percent of the economy by year 2015.
* This year, they project that spending in 2016 will be about 19.6 percent of the economy; not a huge difference, but certainly a notable one.

The lack of consumer involvement in the cost of health care is a key driver in the upward pressure on prices. If consumers had more of a direct financial stake in their health care decisions, the market would respond with more transparent pricing, competition on price and quality, as in other markets, says IBD.

Equally important, this lack of consumer involvement is a direct result of government policies that encourage overreliance on insurance for routine medical bills and direct government spending, explains IBD.

Source: Editorial, "Burying Good News," Investor's Business Daily, February 27, 2007.

For text:

http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=257472580100703

For more on Health Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=16