An Unhealthy Prospect

Cost Puts Health Insurance Out of Reach for Growing Numbers of Californians

by Gretchen Kell

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 Berkeley's School of Public Health and the UCLA Center for Health Policy Research found that the number of Californians with no health insurance continues to increase and that California workers are less likely to have job-based health coverage than other Americans.

Nearly one-fourth of the state's non-elderly residents -- most of them from families of the working poor -- do not have health insurance.
"California needs to enact reforms to make health insurance affordable and accessible to everyone," said Helen Halpin Schauffler, director of the 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.

Researchers from 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:

o 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.

o 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.

o 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.

o 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 -- including 1.8 million children -- have no health insurance. About 84 percent of the uninsured come from working families, including more than 60 percent who are full-time employees or who are dependents of a full-time employee, according to the report.

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.

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.

The UC researchers' recommendations include:

o 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.

o Simplify insurance regulations by eliminating mandatory benefit requirements, substituting a standard benefit package that health insurers would use in pricing premiums.

o Combine regulation of all health plans in a single state agency and establish consistent grievance procedures for consumers and health professionals.

o 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.


Copyright 1997, The Regents of the University of California.
Produced and maintained by the Office of Public Affairs at UC Berkeley.
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