Report Finds Fault With Health Insurance

THURSDAY, March 22 (HealthDay News) -- Having health insurance is no guarantee that an illness or injury won't leave you in dire financial straits, a new report contends.

"Our interviews found that health insurance did not fulfill its primary purpose," study author Carol Pryor, a senior policy analyst at the Boston-based Access Project, said during a teleconference. "When people got sick, insurance did not protect them from overwhelming financial losses or allow them to access needed care."

"The only thing worse than being uninsured is paying to be uninsured," Joseph Ditre, executive director of Consumers for Affordable Health Care, said during the teleconference. "And that's what high-deductible plans are doing."

The report, The Illusion of Coverage: How Health Insurance Fails People When They Get Sick, was issued Thursday by the Access Project and Brandeis University. Its findings were based on interviews with 45 insured Americans in seven states.

Among the report's key findings:

  • Shifting more costs of care onto patients through high deductibles, co-insurance, and less comprehensive coverage creates significant health access and financial consequences.
  • Confusing insurance company policies and procedures leave patients confused, in debt, reluctant to seek health care, and vulnerable to predatory scam products.
  • Affordability of health insurance must be judged on more than premiums -- it is necessary to consider the costs that people will face should they get sick.

Pryor placed blame for the problem on the insurance industry's doorstep. "The insurance industry is not being held accountable for the quality of its products and services," she said. "Without providing adequate support for consumers and holding insurers to higher standards, we risk trading the problems of lack of health insurance for the equally serious ones of inadequate insurance."

"The affordability of insurance coverage can't be measured solely in terms of the cost of the premiums," Pryor added. "For middle-income people, a combination of high deductibles and co-payments often resulted in unaffordable health insurance."

For low-income people, such policies created unmanageable financial burdens, Pryor said. And for people with high incomes, she added, "annual caps on coverage could leave them with enormous debts if they became seriously ill."

For most people interviewed, high-deductible plans were all they could afford, Pryor said. "These complex, cost-sharing arrangements have created an insurance system that is so complicated that it is almost impossible to understand," she said. "People often become vulnerable to deceptive marketing practices."

In addition, when people filed claims, they couldn't find out what was covered or why claims were denied, Pryor said. "Often claims were denied because of fine-print clauses or procedural requirements," she said.

Pryor's group suggests several changes to help correct these problems.

There should be standards that define comprehensive, affordable insurance. These standards should include the range of benefits covered and the out-of-pocket expenses for which consumers are liable.

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