What should a health insurance policy cover? The answer to that question varies widely depending on who you ask. A 22 year old man might say that it just needs to cover catastrophes and have low premiums. A 30 year old woman might say that it’s important for health insurance to cover maternity care. A 60 year old who takes maintenance medication for cholesterol and blood pressure will likely say that it’s important for health insurance to cover prescription drugs. For my family (and for lots of the clients we work with here in Colorado), an HSA-qualified plan is ideal, as long as we feel confident that everything will be covered if and when we meet the deductible. For us, it’s a perfect mix of low premiums and good safety-net coverage. But there are plenty of people who are willing to pay higher premiums in order to get a more comprehensive policy that covers a range of services before the deductible is met.
The point is, there really is no one-size-fits-all when it comes to health insurance. In terms of health care reform, unless someone just starts handing out free health care (without tax increases or premiums…), it will be tough to get people to agree on a single plan, or even a handful of coverage options.
Each state has its own regulations in terms of what all policies in that state have to cover. The rules are different for group and individual health insurance. In Colorado, for example, all policies have to cover well-child care, PSA testing and mammograms (based on age). All group plans have to cover maternity, but individual plans do not. There are a handful of individual carriers in Colorado that do offer maternity as an optional benefit (Assurant, United HealthOne, and Rocky Mountain Health Plans) but the majority of individual plans do not. This is because the state doesn’t require it, and the market won’t support it (the premiums are expensive, and very few people choose to pay the extra premiums for maternity care on individual health insurance policies).
For people who get their health insurance coverage from their employer, there aren’t likely to be a lot of choices in coverage, but the employer is probably subsidizing a good chunk of the premiums, which makes it easier to accept whatever is offered. For people buying health insurance in the individual market, there are lots of options, but pricing and medical underwriting can often limit the choices.
Bill Kramer has written an article about the issues involved in designing a national benefit plan. Overall, the process and compromises involved sound a lot like what goes into designing private health insurance policies: a delicate balance between cost and coverage, targeting the widest consumer group possible. The major advantage that the private health insurance market has in this regard is that it can implement a wide range of options, with policies ranging from bare-bones catastrophic coverage to very comprehensive “gold-plated” coverage.
If health care reform ends up involving a public, national health insurance option, it would be wise for them to offer multiple plan designs in order to give people choices in terms of premiums and coverage. Otherwise, it’s unlikely to appeal to a large number of people.
I found Bill’s article in the Health Wonk Review, hosted this week at Health Care Policy and Marketplace Review, written by Robert Laszewski.
