Reforms fuel efforts to increase awareness of coverage options

November 1, 2005

In today's world, health insurance is a necessity for sound financial planning.With medical expenses soaring, lack of insurance could prove financially ruinous. Moreover, the uninsured population faces a greater mortality risk than adults with coverage. According to a recent census report, 45 million Americans do not have health insurance—almost one in five. Studies have shown that cost is the primary reason for the lack of coverage.

In today's world, health insurance is a necessity for sound financial planning.With medical expenses soaring, lack of insurance could prove financially ruinous. Moreover, the uninsured population faces a greater mortality risk than adults with coverage. According to a recent census report, 45 million Americans do not have health insurance-almost one in five. Studies have shown that cost is the primary reason for the lack of coverage.

According to a recent census report, 45 million Americans do not have health insurance-almost one in five. Studies have shown that cost is the primary reason for the lack of coverage. However, almost one-third of the uninsured have annual incomes of more than $50,000. Over the last 10 years, the fastest growing segment of the uninsured population has been middle- and upper-income families. A profile of California's non-poor uninsured found 75% of those surveyed indicated cost was the reason they had no health insurance.However,68% overestimated the cost of coverage, and when told of the cost, 53% expressed interest in purchasing coverage.

INDIVIDUAL MANDATE

Several other states are looking at significant reductions in the number of mandated benefits required to be covered. As noted by Rhode Island Governor Donald Carcieri, "Not everyone needs a Cadillac." This approach is gaining momentum, but will likely see some opposition from provider organizations.

FAR-REACHING REFORMS

These far-reaching reforms suggest that it may be time to consider legislation to increase public awareness of available coverage options.

In this vein, some states are considering the use of public service announcements (PSAs) funded by state funds or private donations. Such legislation would:

In California, the Foundation for Health Coverage Education has pursued a model that includes development of a "matrix" brochure with an overview of the health insurance options, both public and private, available for many different demographic profiles, as well as a quick-reference list of phone numbers and Web sites.There also is a Health Insurance Eligibility Tool that Californians can use to determine their potential eligibility for government and private programs.

Perhaps the more cautious approach, at this time,would be one of educating the uninsured population instead of dictating individual financial decision-making.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP, and is located in the firm's Austin, Texas, office.

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