High Price of Health
Health-insurance costs are rising rapidly, with the likely result that even more Americans will be without the protection or will be left with inadequate policies. It is yet another sign that the existing system, relying largely on employer-paid health insurance, is not meeting the needs of the nation.
The most critical problem at the moment has to do with health-insurance policies sold to individuals and families that are not part of groups. In California, the cost is going up as much as 25% for some and 15% to 20% for such major insurers as Blue Cross and Blue Shield. That means that a person between 30 and 44 years of age, with a family, will be paying at least $200 a month for protection under a policy that includes a $500 deductible but also has a cap of not more than $5,000 additional out-of-pocket expenses each year.
The staggering cost is only part of the story. Many people cannot get this insurance for love or money because of prior medical problems and others must accept coverage with an exclusion for treatment or hospitalization related to a prior illness. Blue Cross, largest of the insurance operations, currently rejects about 20% of the applications for individual policies and applies exclusions to another 20%.
Two trends are behind this high inflation. One is medical inflation; increases in bills for health care are running about 6% to 8% a year. The other, and newer, problem is the increased utilization of services. That rose by 10% last year, according to Blue Cross studies. Medicare previously had been forced to raise Part B premiums for next year largely because of increasing utilization of services.
Doctors have correctly noted that some of the higher utilization is because of the trend to do less health care in hospitals and more in out-patient surgeries or the doctors’ offices. But that appears to explain only a portion of the increase. Another factor is the availability of higher cost technologies, including the new scanners, that improve diagnosis but can readily be overused. Yet another is bad medicine, the kind of practice identified in a recent Times study of the extraordinary overuse of Caesarean sections in child birth in Southern California. An overwhelming majority of hospitals in the region exceed the percentages regarded as normal for C-section deliveries, with many of the hospitals having a rate double the national average range, hugely inflating the cost of obstetrics.
Important efforts are being made to contain medical inflation and increased utilization, but that is of little comfort to the 31 million or more Americans without any health insurance. Large increases in the cost of insurance will almost certainly increase those numbers. That is why Sen. Edward M. Kennedy (D-Mass.) and Rep. Henry A. Waxman (D-Los Angeles) have introduced legislation to require employers to furnish basic health insurance. That is why 15 states, but not California, have created insurance pools to protect high-risk individuals otherwise denied protection. That is why some states are beginning to study universal health-insurance legislation. The status quo is intolerable.
