U.S. adults spend most; forgo care due to costs, struggle to pay medical bills, and contend with insurance 

Wednesday,4th Dec
Written By: Sweety Rai

A new 11-country survey from The Commonwealth Fund finds that adults in the United States are far more likely than those in 10 other high-income industrialized nations to go without health care because of costs, have difficulty paying medical bills, and encounter time-consuming health insurance paperwork or disputes, including claims that were unexpectedly not paid.

More than one-third (37%) of U.S. adults went without recommended care, did not see a doctor when sick, or failed to fill prescriptions because of costs, compared to as few as 4 percent to 6 percent in the U.K. and Sweden, according to the study published today as a Health Affairs Web First article. In addition, nearly a quarter (23%) of U.S. adults either had serious problems paying medical bills or were unable to pay them, compared to less than 13 percent of adults in France, the next-highest country, and 6 percent or fewer in the U.K., Sweden, and Norway. About two of five (41%) U.S. adults spent $1,000 or more out-of-pocket for care in the past year - by far the highest rate of any country surveyed.

Uninsured adults in the U.S. were the most likely to struggle to afford health care. However, even U.S. adults insured all year were more likely than adults in other countries to forgo care because of costs, to struggle with medical bills, and to face high out-of-pocket costs, with 42 percent paying $1,000 or more out-of-pocket for medical care. According to the study, U.S. health insurance has higher deductibles and higher cost-sharing, and does not place limits on out-of-pocket costs. This potentially explains why even people with health insurance in the U.S. struggle to afford needed health care.

The 2013 survey of 20,045 adults from Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States focused on people's experiences with their country's health care system, particularly those related to accessing and affording care. The study's authors note that the findings could provide a baseline for how the U.S. health system is performing as the nation's health insurance system undergoes the most significant changes it has seen since Medicare and Medicaid were enacted in 1965.

"For more than 10 years now, The Commonwealth Fund has compared the U.S. health system to the systems of other industrialized nations, and the U.S. has always been an outlier when it comes to costs, access, and affordability. Far too many people go without care or can't afford to be sick, even when they have health insurance," said Cathy Schoen, Commonwealth Fund senior vice president and lead author of the article. "This study, which offers benchmarks to assess the progress of U.S. health reforms from an international perspective, clearly underscores the need to simplify our health insurance system and ensure that people can get and afford the care they need."

Preventive care utilized more when people are insured but no increase seen in risky behaviors

Preventive care utilized more when people are insured but no increase seen in risky behaviors

Wednesday,4th Dec
Written By: Sweety Rai

People with health insurance are more likely to use preventive services such as flu shots and health screenings to reduce their risk of serious illness, but they are no more likely than people without health insurance to engage in risky health behaviors such as smoking or gaining weight, researchers at UC Davis and University of Rochester have found.

The findings, published in the November-December issue of the Journal of the American Board of Family Medicine, contradict the common concern that expanding health-care coverage may encourage behaviors that increase utilization and costs.

"The notion that people with insurance will exhibit riskier behavior is referred to by economists as 'ex ante moral hazard' and has its roots in the early days of the property insurance industry," said Anthony Jerant, professor of family and community medicine at UC Davis and lead author of the study. "After buying fire insurance, some people wouldn't manage fire hazards on their property. But health care is different. Someone might not care if their insured warehouse burns down, but most people want desperately to avoid illness."

Jerant and his colleagues evaluated respondents in the Medical Expenditure Panel Survey, a source of national data on the costs and uses of health care. They included adults who entered the survey between 2000 and 2008, participated for two years and had insurance at least once during those two years of participation. The team then compared data on 96,021 respondents while they were insured to data on them while they were uninsured.

Specifically, the team compared health behaviors that are often detrimental to health such as smoking, seat belt use and weight gain. They also focused on use of preventive care services that are intended to protect health, including flu vaccinations, colorectal cancer screenings, mammography, pap smears and PSA (prostate-specific antigen) tests. In addition, the researchers examined numbers of office visits, prescriptions and other expenditure metrics.

The results showed that changes in health insurance status were closely linked to preventive care, which increased with coverage and decreased without it. The gain or loss of coverage, however, had no significant relationship to changes in health behaviors. This contradicts a belief long-held by some health economists that mandating the purchase of health insurance coverage may increase risky behavior. While this belief is at odds with the experiences of many physicians, this is the first time the relationship has been vigorously investigated in a national sample of adults of all ages.

"There has been a concern that people would say, 'Hey, I have insurance now, I don't have to worry about my diet. If I get heavy and develop a problem, I can just go to a doctor and have it treated,'" said Jerant. "Empirically, we find that's not the case. Health insurance coverage did not worsen the health habits we studied."

"These results do show that having health insurance affects the likelihood of receiving important preventive services that can potentially reduce the chance of an influenza-related hospitalization or death and prevent or detect colorectal or cervical cancer," said co-author Kevin Fiscella, professor of family medicine at the University of Rochester School of Medicine. "This is a critical message, as many states continue to debate whether to expand Medicaid."

While the results of this study generally support the broad intent behind the Affordable Care Act (ACA) to expand insurance coverage as one means to encourage preventive care, Jerant urges caution.

"The people in our study voluntarily acquired health insurance, while the ACA is mandatory," he said. "We will need to verify whether our findings apply to mandatory coverage. People may behave differently when coverage is mandated."

In addition, the study does not address why gaining insurance improves receipt of preventive care but not health behaviors that can have profound health effects. The authors suggest that this may result from clinicians having a greater vested interest in preventive interventions, which are more directly under the clinicians' control and easier to bring about than sustained lifestyle changes. The authors also point out that studies have found that clinical efforts to encourage weight control, seat belt use and smoking cessation have limited efficacy.

While preventive care increased for those with insurance, that increase was not uniform across different types of care. For example, insurance increased cancer screenings, such as colonoscopies, much more than flu shots. The authors hypothesize this may be due to differences in cost and access, as vaccines are relatively inexpensive for uninsured people to buy and are widely available in many workplaces, drugstores and other places -- not just in health-care facilities

Ultimately, the study findings counter a theoretical barrier to health insurance expansion.

"Now we have empirical evidence that patients don't change the health behaviors we studied as a consequence of changes in their health insurance alone, and we've confirmed that insurance encourages people to get vaccinations and cancer screenings," Jerant said. "In other words, insurance works."

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Health Care Is A Constitutional Right In Most Countries

 Health Care Is A Constitutional Right In Most Countries 

August 24,2013

By Sweety Rai

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The United States is one of 86 countries whose constitutions do not guarantee their citizens any kind of health protection. That's the finding of a new study from the UCLA Fielding School of Public Health that examined the level and scope of constitutional protection of specific rights to public health and medical care, as well as the broad right to health. 

The study examined the constitutions of all United Nations member states and found the results to be mixed, despite the fact that all U.N. members have universally recognized the right to health, which is written into the original foundational document establishing the international body in 1948.The researchers reviewed the constitutions of all the member states as amended to two points in time: August 2007 and June 2011. 

The report appears in the July issue of the journal Global Public Health. 

The study also calls for regular and long-term monitoring of all countries' protection of health rights, whether or not such rights are written into specific country's constitutions. 

That's because a constitutional definition of what health protection actually is varies widely between nations. Further, how such protections have been implemented varies widely, said the study's first author, Dr. Jody Heymann, dean of the Fielding School of Public Health. 

"With respect to specific rights to health, the status of the world's constitutions can be described as either half empty or half full," Heymann said. 

The study found that 73 U.N. member countries (38 percent) guaranteed the right to medical care services, while 27 (14 percent) aspired to protect this right in 2011. When it came to guaranteeing public health, the global performance was even poorer: Only 27 countries (14 percent) guaranteed this right, and 21 (11 percent) aspired to it. 

But doing the math doesn't provide a comprehensive picture, said Heymann. 

"There also exists gaps between individual countries that may have strong constitutional protections but poor records of implementing health rights on the ground," she said. "On the other hand, there are countries that lack constitutional provisions that have excellent health care systems in place." 

The latter is particularly true in the case of older constitutions that have not been significantly amended since constitutional rights to health became common, she noted. 

The good news, Heymann said, is the clear trend toward greater constitutional protection of health rights overtime. While only 33 percent of the constitutions adopted prior to 1970 addressed at least one health right, 60 percent of those introduced between 1970 and 1979 included the right to health, public health and/or medical care. Three-quarters of the constitutions introduced in the 1980s, and 94 percent of those adopted in the 1990s, protected at least one of these rights. Only one of the 33 constitutions adopted between 2000 and 2011 did not protect at least one health right. 

"The global recognition of a right to health is a powerful step in guaranteeing health as a fundamental human right for all people," said Heymann. "But it is important to ensure this moral right moves from the philosophical to the practical. That will require a kind of transparency and accountability where the public can readily access information on which countries are implementing these guarantees." 

"The U.S. Supreme Court's decision in June 2012 to uphold the Affordable Care Act was based on viewing the legislation as legal," said Heymann. "While the acknowledgement that Congress can provide for health is a step in the right direction, it is a long way from a guaranteed constitutional right to public health and medical care. The U.S., unfortunately, lags far behind many of the world's nations." 

Failure to Understand Health Insurance Will See People Continue to Pick Wrong Plans

 Failure to Understand Health Insurance Will See People Continue to Pick Wrong Plans 

August 24,2013 

By Sweety Rai

A new study conducted by researchers at Carnegie Mellon University suggests that people will continue to make mistakes when selecting health insurance plans even though they will have a wide range of health care insurance options to choose from as part of the 2010 Affordable Care Act (ACA).

Previous research has shown that competition at the consumer level is only likely to result in reduced prices and improved quality when sufficient numbers of consumers make informed decisions. The study led by Loewenstein shows that consumers do not understand health insurance and therefore casts doubt on whether they will make the best decisions under the ACA. 

Published in the Journal of Health Economics, the researchers report findings from two surveys of representative samples of Americans between the ages of 25 and 64 who have private health insurance and are the primary or shared decision maker for their own or their families' health care. Behavioral economists at the University of Pennsylvania, Stanford, Harvard and Yale universities and the University of Chicago, as well as professionals at a health insurance company participated in the research. 

The first survey was designed, in part, to uncover how well the insurance holders understand four basic traditional health insurance concepts — deductible, copay, co-insurance and out-of-pocket maximum — as well as how well they believe they understand them. Analysis of responses revealed that while insured Americans felt confident about their own understanding of these concepts, their actual understanding was much lower; only 14 percent of all respondents accurately understood all four concepts. 

The first survey also found that only 11 percent of respondents presented with a traditional insurance plan incorporating all four of these elements were able to compute the cost of a four-day hospital stay when given the information that should have enabled them to do so. Finally, the survey revealed that a simplified insurance plan that eliminated deductibles and copays — the two least well understood elements of insurance plan design — would appeal to consumers. 

"It is strange, in my opinion, that the insurance market has evolved so, that so few individuals understand the fundamentals of the medical insurance plans they are insured under," said Loewenstein, the Herbert A. Simon University Professor of Economics and Psychology in CMU's Dietrich College of Humanities and Social Sciences. "Insurance plans incorporate all sorts of incentives designed to encourage customers to make specific types of decisions. What is the likelihood that they are going to respond to these incentives if they can't understand the most basic elements of plan design?" 

Based on the finding that consumers had trouble understanding deductibles and co-insurance, the researchers then collaborated with the insurance professionals on the team to design a simplified insurance plan using only copays (no deductibles), which was later marketed to the insurer's customers. The second survey then compared the ability of respondents to compute costs under the simplified plan as compared with a traditional plan with similar copays. The survey also asked respondents to make hypothetical health care decisions based on the simplified and traditional insurance plans, such as whether to go to the emergency room or to an urgent care clinic with an earache. Half of the participants gave responses first using the traditional plan, then using the simplified plan, while the other half were exposed to the two plans in the reverse order. Finally, the second survey elicited respondents' preferences between the two plans. Both plans had the same premium. 

Analysis of survey responses revealed that respondents were somewhat more likely to make lower cost choices, such as going to an urgent care clinic under the simplified plan, and were much better able to understand the cost ramifications of these decisions under the simplified plan. Examining consumer preferences, the researchers found that respondents were initially relatively indifferent between the two plans, but after attempting to compute costs of services under the two plans, their preferences shifted sharply in favor of the simplified plan. 

"The ACA deals with the problem of consumer misunderstanding by requiring insurance companies to publish standardized and simplified information about insurance plans, including what consumers would pay for four basic services," noted lead author Loewenstein. "However, presenting simplified information about something that is inherently complex introduces a risk of 'smoothing over' real complexities. A better approach, in my view, would be to require insurance companies to offer truly simplified insurance products that consumers are capable of understanding

Is Health Insurance in New York Cheaper?

August 24,2013

By Sweety Rai

Experts feel a change can be expected next year when the premiums come down by half, under The Affordable Care Law, due to increased competition on the state exchange and when healthy young people buy insurance. "It's not an exact science. You have to make assumptions, and that's what we did. But they're informed assumptions, based on our experience in the market," said Don Ingalls, HealthNow New York's vice president for state and federal relations. 

Offering subsidies and less expensive options will give access to millions of uninsured. "The early signs from New York are very promising," said Heather Howard, program director for the State Health Reform Assistance Network, which is funded by the Robert Wood Johnson Foundation. 

When healthy uninsured people sign up for coverage it balances the costs for the ill. When people don't sign up, they are required to pay penalties. They should be able to afford the coverage and also be able to navigate the enrollment system on the insurance exchange. "This is a brand new environment for everyone - the state, insurers and consumers. The exchanges are very much a work in progress," said Peter Kates, a Univera Healthcare spokesman. 

Today, while millions of New Yorkers receive coverage through an employer, and many receive health insurance through the federal Medicaid and Medicare programs, just 17,000 people in the state pay for insurance coverage directly. 

"For an individual looking for insurance, it is virtually impossible to find affordable coverage, or to access it," said Larry Zielinski, a former president of Buffalo General Medical Center who teaches at the University at Buffalo School of Management. "I will say it is very difficult to make comparisons between the rates for coverage being paid today and the rates for coverage beginning in 2014. That's because the coverage will be so different," said Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation. 

Representatives from the three largest area insurers are confident in their projected plan rates. When people buy insurance today is when they have no other option and need health care. On the exchange a larger spectrum of consumers can be targeted and may find it to their advantage to sign up when the cost is reasonable. Nine companies are approved to sell insurance in the region through the state exchange, including HealthNow New York, the parent of BlueCross BlueShield of Western New York. 

The exchange plans will attract people who are eligible for a subsidy or who are in bad health, said Greg Pasieka, HealthNow New York's director of health care reform. "We do not expect all of the uninsured to enroll in a policy with us," Pasieka said, adding, "We're trying to forecast what consumers will do." Many people in good health may opt to pay the penalty, said Brian M. Murphy, a partner with Lawley Benefits Group. "That's why the insurance carriers are really nervous," Murphy said, because to make it work financially, "you need the good and the bad."

Eight smart money moves to make before the age of 30

Eight smart money moves to make before the age of 30

They told you in school that the early bird got the worm. In college, the sermon was, well begun is half done. Just when you thought you had had enough of these preachy one-liners, ET Wealth has decided to goad you into action. Our message is simple: the investment decisions you make in the first 5-6 years of your career have the potential to transform your financial future. We list out eight smart money moves that investors should make before they turn 30.

There are obvious advantages of starting early. Most of us know that the longer we stay invested, the greater is the power of compounding. So, if you save Rs 5,000 a month in an option that earns 10% annually, your corpus at the end of 30 years would be a massive Rs 1.08 crore.

Your principal investment of Rs 18 lakh grows six times. Now, here's the surprise. What you save in the first five years accounts for Rs 48 lakh (over 44%) of the corpus. The Rs 60,000 you put away in the first year alone grows to Rs 10.4 lakh, or 9.6% of the total amount. Miss these wonder years of compounding and your corpus would be much smaller at Rs 60 lakh.

How many investors realise this simple arithmetic? Not many, according to a study by Ameriprise India. The financial planning company spoke to nearly 700 upwardly mobile investors across six major cities in India and found that most of them had frittered away the early bird advantage. The investors in Mumbai understood the benefits of early investing best, with more than 80% of the respondents having started before they turned 26. In Delhi, on the other hand, only one out of four respondents woke up to this fact, while in Hyderabad, only one in five did.

Our cover story is intended as a wake-up call for Gen Y. If you have just started your career, you will find these tips invaluable. Whether it is buying pure protection cover early in life or signing up with a portfolio tracker to plug money leaks, these smart financial decisions will lay a solid foundation for a prosperous tomorrow.

1) Take a term insurance policy

Buying a term plan tops the list of smart money moves. The earlier you buy life insurance, the lower is the premium. "It is best to lock in at a young age when you are hale and hearty," says T R Ramachandran, CEO and managing director, Aviva Life Insurance.

We did some number crunching and found that if the cover is till the age of 60, the total cost of buying the plan at the age of 25 or 35 or 45 is roughly the same. A 30-year-old would pay Rs 3.18 lakh over 30 years for a cover of Rs 1 crore. If he waits for 15 years and buys at 45, his total premium outgo would be Rs 3.39 lakh (see graphic). While you pay the same price, your insurance term will be lesser. More importantly, a person who buys late is taking a big risk till he gets protection. If he develops a medical condition later in life, he may have to shell out a significantly higher premium. If the problem is severe, he may be denied the cover altogether.

Keep a few things in mind when you go shopping for a term plan. First, the insurance cover should be big enough to generate a monthly income for your family, cover major expenses, and settle outstanding loans. Understanding this need, Delhi-based Pradeep Khullar (see picture) bought a term cover of Rs 1.25 crore last year.

Secondly, the policy should cover you at least till the age of 60. Don't take a short-term cover of 10-15 years, which ends when you are in your 40s. You need insurance most at this stage of life and a fresh policy will cost you a bomb. Lastly, don't try to lower the premium by mis-stating facts in the form. If you smoke, drink or suffer from a medical condition, don't hide it. It may bump up the premium by a few hundred rupees, but your nominee's claim won't be rejected because of mis-statement of facts.

2) Take adequate health insurance

Health insurance is also cheap when you are young and costlier when you are old. More importantly, the rule about pre-existing diseases makes a compelling case for buying a cover early. When you are young and in fine fettle, the 3-4 year waiting period is a breeze. Delay buying the policy and you may get afflicted by medical conditions that usually crop up in the late 30s and 40s.

Don't harbour the misconception that your employer's group health plan will be sufficient. While these are useful, they do not provide adequate coverage. Besides, if you lose your job or switch to another company, you may be rendered uninsured for a certain period.

A basic indemnity plan, which reimburses hospitalization expenses, should be your first health insurance policy. Self-employed professionals also need to insure themselves against loss of income due to hospitalization. They can supplement the base cover with a fixed benefit policy, which pays them a certain amount for the period that they are out of action.

Product Matrix

August 15,2013 at 11:13pm

By Sweety Rai

We provide a comparison of health insurance products available in different categories on the basis of some crucial variables to help you pick the most suitable ones.