Cost keeps many from joining health plans employers offer

Staying Ahead

November 07, 1999|By Jane Bryant Quinn | Jane Bryant Quinn,Washington Post Writers Group

OF THE millions of Americans without health insurance, a surprising 20 percent are eligible for an employer plan.

That's a far higher percentage than anyone imagined, says Peter Cunningham, senior health researcher for the nonpartisan Center for Studying Health System Change (CSHSC) in Washington, which has just released a new study of the uninsured.

Why do some breadwinners leave themselves and their families unprotected? Most of the time, it's because they can't afford the policy's price. They have coverage at their fingertips, but the family's income is too low to enable them to pick it up.

Americans with livable incomes don't realize how often the poor pay higher prices than anyone else for many products and services. The CSHSC study shows that that applies to health insurance, too.

At companies paying lower wages (typically smaller ones), employers pay less toward the cost of family plans.

For example, the cheapest family policy costs workers an average of $84 a month at companies where the typical wage exceeds $15 an hour, CSHSC reports. That compares with $130 a month at companies where hourly wages are below $7.

For lower-income families, that's a double blow. First, they pay 55 percent more for family insurance than higher-income families do. Second, the cost of the premiums eats up a higher percentage of their incomes. No wonder they're having to say no.

Smaller companies are also suffering larger increases in their health insurance costs, according to a health benefits survey by the Kaiser Family Foundation and Health Research and Educational Trust.

Premiums for employer-sponsored plans rose an average of 4.8 percent in the 12 months that ended in the spring. For the smallest companies, premiums rose 9.2 percent. That's a recipe for forcing even more people out of the health-insurance system.

CSHSC's findings suggest a direct way of reducing the number of uninsured: Find ways of lowering the price that employees pay, especially for family plans, so that more people can afford them.

Enrolling more workers in company plans would be of more help than any of the insurance plans Congress passed or proposed in recent years, Cunningham says.

Congress and some of the presidential candidates have various ideas for helping with premium costs. None of them focuses specifically on people who can't afford their company plans, but many of them would still be helped. For example:

Democratic presidential candidate Bill Bradley would subsidize health insurance for people with low to moderate incomes. They'd get help on a sliding scale, with the poorest receiving enough to cover a policy's full price.

Bradley would start by requiring that all children be insured through federally approved plans (although he doesn't propose a way of enforcing that rule).

Next, he would institute similar subsidies for the adults who chose to join. They could buy employee coverage, individual coverage or join the health plan used by all federal workers (including Congress).

There are two risks to such a plan.

First, some small companies might drop the health insurance they offer and dump their workers into the federal pool. If they did so, they'd be wiping out health benefits for their higher-paid workers, too. They might not want to do that.

Second, some workers who carry company insurance might find it cheaper to scoot to the federal plan. Businesses would get a break, but the government's costs would rise even more.

The big question is whether the industry and the taxpayers want to do this much for the uninsured.

Vice President Al Gore would let states expand the subsidized Children's Health Insurance Program (CHIP).

CHIP is only for the children of the very poor. Gore would extend it to children with moderate family incomes and push the states to sign more people up. The uninsured parents of children eligible for CHIP and Medicaid could get into the program, too.

But why discriminate against uninsured workers who happen not to have children? This helps some workers while leaving out others with the same modest incomes.

The health-care bill recently passed by the House of Representatives would allow small businesses and associations to band together in buying pools. They would be encouraged to set up bare-bones policies. The insurance would cost less because it would cover fewer medical bills. In past experiments, however, bare-bones policies haven't been very popular.

At best, these are partial solutions, Cunningham says. Something is better than nothing, but the problem doesn't go away.

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