Band-Aids aren't enough

August 03, 1993

In recent years, as public concern grew about the number of people without health insurance coverage, a number of insurers devised "bare-bones" plans with affordable premiums. The problem is that you get what you pay for.

Lower costs means fewer benefits and big deductibles. So it is no surprise that these plans have yet to catch on in a big way. Last month Families USA, a consumer advocacy group, released a report detailing the market failure of "bare-bones" health plans in the 16 states where they are available.

Oregon had by far the highest rate of participation, with 18,345 policies in effect. Washington state was next, with 7,012. More typical were the 11 states which had fewer than 300 participants. In Maryland, only 197 people held these policies at the time of the study.

Clearly, these plans are not the answer for the 37 million Americans who are without health insurance. According to the insurance industry, they were never intended to be. "This is not our fight," says a spokesman for Blue Cross and Blue Shield of Maryland. Instead, he says, the real issue is universal access to health care. He also notes that many of the consumers who have inquired about Core Plan I, the "bare-bones" policy available here, have chosen instead to buy coverage that costs slightly more but provides more benefits.

Consumer advocates may argue that "bare-bones" plans charge too much for too little, or that they have been poorly publicized, or that they have been designed largely to stave off public criticism of the health insurance industry. Each of these arguments contains some truth, yet no single segment of the health care industry can offer a comprehensive solution to a national crisis. Efforts from health insurance companies, or from any other part of the industry, can at best be only Band-Aids.

Each of these "bare-bones" plans reflects the strengths and weaknesses of the health care policies of the states in which they operate. Marylanders, for instance, benefit from the state's hospital cost control system, which spreads the burden of unpaid hospital costs more fairly than in other states. As a result, uninsured or underinsured patients, including "bare-bones" policyholders, are more likely to receive the hospital care they need.

Criticism of scaled-down health plans may well be warranted, but it should not deflect attention from the larger issue -- the fact that no stop-gap measure can substitute for comprehensive health care reform.

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