At last, a glimmer of good news for working people and their families -- 28 million strong -- who get no health insurance on the job.
A handful of imaginative pilot projects, seeded by the Robert Wood Johnson Foundation of Princeton, N.J., are proving that premiums for small-company, group-health insurance can be cut by 30 percent to 40 percent, while still delivering decent care. More employers would provide coverage if offered cheaper policies.
Now, small-company coverage is a mess. Although some insurers try to serve this market fairly, others indulge in a cruel game of bait-and-switch.
For example, a cynical insurer may offer a small company an unusually low-cost policy. One year later, the insurer might jack up the price, and then do it again. Pretty soon, the company can no longer afford the premiums. The policy is canceled, leaving some ailing employees out on a limb.
Another insurer then shows up, proposing a new policy at a low price. But it won't cover any employee's current or preexisting illnesses.
That kind of round robin creams off the best risks and forces out people who need health insurance the most. "We've gotten away from the insurance concept of spreading the risk," says David Helms, president of the Alpha Center in Washington, D.C., which is overseeing the Robert Wood Johnson grants. "Instead, insurers are trying to take only the best risks. We have to do something to make sure that everyone is covered."
So many bright ideas are popping up in so many cities and states that I can briefly mention only a few. But they show you what happens when serious people take action (Congress, the White House and the statehouses, please take note):
In Virginia, Aug. 1 will usher in a new, stripped-down health-insurance policy, which was recently legalized for small, uninsured businesses. It eliminates most of the expensive benefits, such as mental-health coverage and drug-abuse treatment, normally required by law -- but provides basic doctor and hospital care. The probable cost of a bare-bones Blue Cross and Blue Shield policy: under $80 a month for individuals 39 and younger; for older people, around $130.
Family coverage will cost about $175 or $300, depending on age.
Arizona is subsidizing a small-company plan, not with direct tax dollars but with services. By administering the program through the state's Medicaid machinery, premiums can be cut by around 30 percent.
Top-of-the-line coverage in Phoenix, with 100 percent hospital insurance and a $5 co-payment for doctor visits, costs $103 a month for a single person and $343 for a family. Bare-bones catastrophic coverage, which offers 100 percent hospitalization after you pay a $2,000 deductible, comes to $65 a month for a single person and $225 for a family.
Companies can participate, if they have 25 or fewer employees and haven't offered health insurance during the past six months. The employer decides which plan to offer, and may or may not help pay the premiums. The plan is expected to become self-supporting.
In the Denver area, the Shared Cost Option for Private Employers (SCOPE) program, underwritten by the United States Life Insurance Co., is being offered at significant savings.
It, too, will be self-supporting.
Employees get full coverage for preventive care such as checkups and well-baby visits, and for catastrophic hospital stays costing more than $5,000. But they have to pay half of the cost for less costly hospitalizations, plus an annual $250 deductible. So they're taking on a little more risk.
The Utah Community Health plan, for uninsured companies in the Salt Lake City area with fewer than 20 employees, got specialist doctors and hospitals to take a 35 percent discount. "We estimate that the average uninsured patient pays about 50 percent of the bill," says executive director Bill Willson. "So doctors and hospitals can afford to make discounts without being worse off."
In Florida, state subsidies lower the cost of health insurance to businesses participating in the Small Business Health Access Corp., now operating in the Tampa area and soon to expand. The subsidies come from a tax on hospitals.
Better bare-bones coverage than none at all.