NEWS RELEASE, 1/16/97
Number of California's uninsured is growing; insurance coverage for state's workers lags behind nation, UC study says
Berkeley -- Despite reforms aimed at making coverage more accessible and affordable, health insurance remains too expensive for a large number of California residents and cost is the primary reason many employers do not provide health benefits, according to the first comprehensive examination of health insurance in California.
Researchers from the University of California at Berkeley School of Public Health and the UCLA Center for Health Policy Research found that the number of California residents with no health insurance continues to increase and that California workers are less likely to have job-based health coverage than other Americans.
"California needs to enact reforms to make health insurance affordable and accessible to everyone," said Helen Halpin Schauffler, director of the UC Berkeley Health Insurance Policy Program and one of the report's principal authors. "Nearly one-fourth of the state's non elderly residents -- most of them from families of the working poor -- do not have health insurance."
"The private insurance market is not going to take care of the problems by itself," said E. Richard Brown, a professor at the UCLA School of Public Health and another principal author of the study. "Part of the solution involves providing subsidies to moderate and low-income individuals and families who simply cannot afford insurance."
The analysis, funded by a grant from The California Wellness Foundation, found that many people are denied health insurance because insurance companies exclude certain individuals from coverage and refuse insurance to many types of companies.
"California's health insurance system should do more to improve the health of California's residents," said Gary Yates, president and chief executive officer of The California Wellness Foundation. "We need to extend coverage to everyone and make sure that the coverage protects people's health."
Researchers from UC Berkeley and UCLA surveyed California residents, employers, insurance plans and health insurance purchasing cooperatives during 1996, analyzing the information to determine who has access to health insurance, the employers' role in providing insurance and the practices of health plans.
While a majority of the state's residents reported being satisfied with their job-based insurance coverage, researchers found evidence that many people are foregoing needed medical care because they cannot afford the cost. The 100-page report, "The State of Health Insurance in California, 1996," includes findings that:
While managed care plans such as health maintenance organizations dominate California's insurance market, there is no consistent way for consumers to compare competing plans.
The state's health insurance purchasing cooperatives have been able to lower the health plan premiums for their members for each of the last three years.
People with private insurance are most satisfied with their health coverage while those with Medi-Cal, the state insurance program for the poor, are the least satisfied.
Los Angeles County has the largest proportion of uninsured residents, with one-third of its non elderly residents uninsured.
A total of 6.6 million California residents who -- including 1.8 million children -- have no health insurance, including a disproportionately high number of Latinos, African Americans and Asians. About 84 percent of the uninsured come from working families, including more than 60 percent who are full-time employees or who are the dependents of a full-time employee, according to the report.
More than one-third of the uninsured adults who were surveyed said they did not go to the doctor in 1996 -- even when they needed care -- because of the cost.
"The health of California's uninsured population is poor and requires immediate attention," Schauffler said. "Not only do the uninsured have the poorest health status and highest health risks, they also have the least access to disease prevention and health promotion programs."
Researchers found that just 57 percent of California residents have job-based health insurance, compared to 66 percent of all Americans. Companies with fewer than 50 employees are much less likely to offer their workers health insurance, with 73 percent citing the high cost of premiums as a reason they do not provide health benefits.
"Health insurance is simply unaffordable for many people," Brown said. "Even some people who are offered coverage through their employers find that their portion of the cost is just too high. Cost is an even bigger problem for the self-employed and others who must purchase insurance on their own."
Researchers also found that most health insurers still use pre-existing conditions and other individual characteristics to price premiums and exclude certain people from obtaining coverage. In addition, one in five HMOs and one in three providers of traditional insurance deny coverage to mid-size and large firms in certain industries, such as alcohol beverage sales, fishing and temporary employment agencies.
"These practices are a major barrier to extending health insurance to more people," Schauffler said. "State lawmakers should adopt measures to prohibit exclusion based on prior health problems, occupation or other individual characteristics and create a purchasing pool that allows individuals to buy private insurance as part of a group."
Confirming the growth of managed care plans, the report found that 75 percent of insured Californians were in some type of managed care plan, including 39 percent who were enrolled in HMOs.
While the managed care plans offered the most comprehensive benefits, because of differences in the types of benefits covered and cost-sharing it is impossible for consumers to compare the value of different insurance plans.
"Consumers have no consistent way to determine which insurance plan or which options offered by an insurance plan best suits their needs," Schauffler said. "Creating a basic benefits package would help consumers compare the price and value of their insurance options."
The HMOs are doing more to promote health and prevent disease, offering health promotions programs and forging ties with public health agencies. In addition, all HMOs in California are involved in assessing the quality of care they provide.
"We found no difference in satisfaction with managed care compared to other insurance," Schauffler said. "What we did find was that people with poor health status and chronic conditions are the least satisfied with their health insurance, regardless of the type."
One success highlighted by the report is the experience of California's five employer purchasing cooperatives.
The cooperatives' premium rates have dropped three years in a row, they have taken the lead in assessing the quality of care in HMOs and they provide their employees with an understandable comparison of insurance offerings, according to the report.
Purchasing cooperatives allow employers to work together to buy health insurance as part of a larger group. There are three purchasing cooperatives in the state for small businesses, one for public employees and one for large employers, but none for mid-sized companies.
The UC researchers outline a series of reforms that would make health insurance more affordable and accessible to everyone in the state. The recommendations include:
Provide subsidies to low- and moderate-income residents who must buy insurance on their own. Tax incentives or direct subsidies also should be extended to make insurance more affordable to small employers.
Simplify insurance regulations by eliminating mandatory benefit requirements, substituting a standard benefit package that health insurers would use as the basis for pricing premiums.
Combine regulation of all health plans in a single state agency and establish consistent grievance procedures for consumers and health professionals.
Strengthen policies promoting public health programs such as injury prevention and tobacco control, and adopt tax incentives to encourage employers to offer worksite health promotion programs.
"These reforms, even if they are adopted one at a time, would bring health insurance to many more California residents and make the existing system more useful to consumers," Brown said.
"In the absence of reform, public health agencies must take a much stronger role to assure that the uninsured receive needed medical and preventive care," Schauffler said.
Thomas Rice, a health economist at the UCLA School of Public Health, is another principal author of the report. Other authors are Susan Chapman, Krista Perriera and Lisa Faulkner of the UC Berkeley School of Public Health, and Kenneth Fong and Hongjian Yu of the UCLA School of Public Health.
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