The California HealthCare Foundation has released two excellent reports examining individual health insurance and employer-based health insurance in California, comparing costs and access to other states, and assessing how employers and individuals make decisions regarding insurance.
The reports, part of the ongoing research of the Foundation, were based on work done by the Center for the Study of Health System Change, a D.C.-based organization known for its excellent work at the national level.
Highlights (term loosely applied) include:
—premium increases doubled the overall inflation rate, with the latest figures at 8.2% compared to a 3.9% overall inflation rate in CA
—monthly premiums averaged $858 for families and $321 for individuals
—PPOs cost more in California than the national average, with HMO pricing lower
–70% of large employers are likely to raise employee contributions in 2006
–providing more and better access to information about individual health plans can have just as much impact as subsidizing premiums.

Research by the California Health Care Foundation on potential strategies for covering the uninsured indicates that employer-sponsored plans and insurance pools don’t hold much promise. Two studies published by the Foundation provide details; both are worth reviewing.
The employer study looked at a multi-year experiment in San Diego wherein smaller employers’ health insurance plans were subsidized in an effort to encourage the employers to offer coverage. It turns out that many employers already offered insurance while those that did not were not often swayed by the subsidy. And, less than one-fifth of the state’s uninsureds were full time employees or dependents of full time employees.
The evaluation of health insurance pools is somewhat more promising. The net is these require extensive planning, careful implementation, and thorough management if they are to be effective. In addition, market considerations such as competitive plans, the cohesiveness of pool members, and demographics have considerable impact.
The net – creating a successful pool is a time-consuming, detail-intensive effort.
What does this mean for you?
While the studies are not exactly encouraging, at least we have a better grasp of the challenges associated with these two popular ideas. Perhaps we are getting closer to understanding what might work to improve coverage.

It’s always interesting to read Mathew Holt’s blog, and today is no exception. His post highlights one European’s perspective on health care spending, funding for same, and what we should, and should not, be spending health care dollars for.
In the world of health care policy wonks, Mathew stands out.

In yet another sign that health care, national health policy (or the lack thereof), and the impact of same on the US economy (free subscription required) is fast becoming a national crisis, Paul Krugman has published an editorial linking GM’s incredibly high health care tab to its recent financial problems, and using GM’s troubles to highlight the impact health care costs have on other manufacturers.
I’d extend that to any employer that provides health insurance for its workers. I was speaking with a senior partner at a large Florida law firm at the Florida Workers Compensation Conference in August about just this issue. The gentleman, a self-described conservative, was reflecting on the costs of health insurance, and the problems firms such as his encountered in obtaining and funding coverage. We had just heard a talk by former HHS Secretary Donna Shalala in which she made a case for national health insurance.
This gentleman, no fan of Shalala or governmental solutions in general, was acknowledging that the present health care “system” was not serving his firm or its employees very well, was costing a huge amount of money, and there did not appear to be any promising solutions in sight. We discussed the unseen costs of health insurance – higher costs prevented them from hiring a new associate, opening a new office, or adding a new document management system. By the end of the conversation, I sensed a willingness to relook at health care and health insurance, to consider it as not a governmental hand-out or employee benefit, but rather as a drag on his firm’s effectiveness.
The more this happens, the closer we get to a solution.
What does this mean for you?
My guess is we will have some form of consensus on national health policy, perhaps with universal coverage, within five years.

Two states’ child health insurance initiatives (free subscription required) show different approaches to the same problem; providing access to health care for the nation’s kids. South Carolina is adopting a scheme based on private insurers while Illinois is pursuing a plan based on public funding and management of the program.
And these are not the only states experimenting with different approaches: California activists are hoping to get an initiative on the ballot next November that would fund child health insurance through a higher tax on cigarettes; New Mexico’s Governor will propose universal health insurance for kids under 5 in his next budget; and Florida has already received approval for the privatization of much of Medicaid.
While Washington dithers over very minor changes to Medicare and Medicaid, the states are once again the laboratories for innovative ideas. These ideas can be differentiated into two broad categories; defined benefit and defined contribution.
The defined benefit programs are those that pay for any care that is consistent with the benefits outlined in the Medicare or Medicaid programs. Defined contribution plans are entirely different – they pay a set amount of money to a program state, or beneficiary that the program, state or beneficiary must use to cover as much of their care as possible.
The ideological distinction here is obvious – have the state responsible for funding the care that is needed v. make private enterprise, the insurance program, and/or the individual responsible for figuring out how much care they need.
With the present regime in Washington, expect the Feds to promote more of the defined benefit programs, and more privatization in the next two years.
While I am all for innovation, remember that administrative costs associated with private health insurance are several times higher than the costs of programs run by the government. The question remaining to be answered is “can the innovations and creativity of private firms deliver better results in terms of lower health care costs and healthier people despite their higher administrative expenses?”
Thanks to Tom Barrett of Choice Medical Management for the reference.

A quarter of employers in Rhode Island do not offer health insurance, and over half of employers said health care costs are driving down profits.
A survey by the State’s Insurance Commissioner covered 1444 employers in the state and focused on the availability of health insurance, employee adoption rates, premium increases, and the wage status of the employees.
Here are a few of the more salient results.
1. 20% of employers saw health insurance costs increase more than 25% this year
2. Almost half of the employers experienced increases above 20%
3. 71% of “low wage” employers offer health insurance; 99% of other employers do (Low wage employers are those who pay more than half their employees less than $21,000 annually)
4. Six years ago, 61% of employers paid the full cost of insurance; 21% do now.5. 20% of employers offer only high-deductible plans with deductibles above $1000
But the real impact of rising health insurance costs is seen in the rapid rise in the number of people without health insurance. According to Insurance Journal, (the report) “also shows the proportion of the state’s population without health insurance rose from 6.2 percent to 11.4 percent, between 2000 and 2004.
Clearly, the nation’s smallest state’s experience is similar to the rest of the country. Rising health insurance rates are decreasing access to health care, especially for the lower economic classes.
What does this mean for you?
Another straw added to the load on the camel’s back.