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Line blurring between insured, unisured

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Ventura County Star

Thirteen years of toiling with heavy parts and tools could have given
Hector Hernandez high blood pressure. Or it could have been the auto
mechanic’s struggle to support five family members in Guatemala, making
sure that $400 was in the mail to them each month. Hernandez says
loneliness did it, not seeing his wife or children more than once
in more than a decade.

Deciphering the cause won’t, however, undo the fact that he is now
shackled to monthly doctor visits at Conejo Valley Family Care Center
for blood pressure checks and prescriptions, a routine he thought
he could live with because he was covered by his company’s health
insurance. He didn’t think he’d be out of pocket more than the typical
$20 co-payments, but he was wrong. His health insurance has a $2,000
annual deductible.

Nearly 16 million people in the United States are in the same boat
as Hernandez, and the number is growing, according to a new study
published in the journal Health Affairs. And as more people discover
their health plans aren’t as affordable as they might prefer, they
begin mimicking the behavior of those with no health insurance whatsoever,
forgoing prescriptions and doctor visits.

"The United States may well be on a path to where it becomes
harder to distinguish the insured from the uninsured," according
to the authors of the study.

Other new studies, by Deloitte & Touche USA and the University
of California, Berkeley, have recorded similar trends.

Arindrajit Dube, one of the authors of the Berkeley report, said all
of these studies indicate the line between the uninsured and underinsured
is becoming more blurry as the price of healthcare rises.

Employers are asking their workers to pay more for health insurance
and workers are reacting by either choosing cheaper, more affordable
plans, or dropping out of the system altogether. It is a situation
touching many types of working people, from the company worker to
the small-business employee and the self-employed.

Back at the Conejo Valley Family Care Center, Ivonne Hernandez deals
with self-employed people as well as people who earn six-figure incomes
and have opted to go without health insurance just to be eligible
for the clinic’s discounted care.

"We have that niche," she said.

One solution proposed by Dube and the authors of the study in Health
Affairs is an overhaul of healthcare policies.

"There must be a more rational system to ensure basic coverage
for people," he said.

Insurance companies, like Blue Cross of California, are wary of policy
changes.

"We need to remember that hyper-regulation and excessive litigation
may have adverse effects on the affordability of healthcare,"
said spokeswoman Kellie Bernell.

As the debate continues, health insurance prices in California continue
growing. Premiums that cost $5,890 a year in 2000 leapt 43 percent
to $8,422 in 2003, according to University of California, Berkeley.

The higher costs translate into a pain in the neck for people such
as Henry Valdez, who said he lost his health insurance when he fell
behind on payments for the monthly premium. Now the Thousand Oaks
restaurateur is shopping around for something that doesn’t break the
bank but covers his needs.

"It’s a pretty spooky thing," he said of buying health insurance
these days.

"You can go broke without insurance," he said, "and
if you pay it, you go broke, too."

Prices for health insurance are higher than Valdez can ever remember
them being. He estimates that he’ll need to pay about $800 a month
to cover himself. And he figures the deductible will be about $1,000,
a price that will likely keep him out of the doctor’s office.

"It’s like car insurance," he said. "You don’t want
to put a claim in."

Valdez won’t have trouble tracking down an insurer. The market is
bubbling over with new products, according to the Oakland-based California
HealthCare Foundation, a philanthropic group. He may, however, not
like the fact that many of the new products the foundation has seen
have higher deductibles, more cost sharing at the time of service
and more restrictions on the services covered.

"As these products become more common in the marketplace, the
risk that consumers will incur costs outside the reach of their budget
grows," said Mariam Mulkey, a senior program officer at the foundation.
Consumers such as Valdez should weigh the risks when they’re purchasing
health insurance, Mulkey recommends. Saving now on a lower premium
could cost a person later should catastrophe set in.

"Consumers need to really keep their eyes open," she said.

Mulkey doubts that the marketplace will change because businesses
"need to do what they need to do to stay afloat." On the
upside, healthcare technology is improving, she said, and treatment
at earlier stages is producing better health outcomes. The downside
is that spending is growing at a rapid clip.

Remedying the problem with broad solutions might depend on new public
policy and changes in consumer thinking, Mulkey said.

"There isn’t an easy answer."

That sentiment is the same one being expressed by insurance companies
such as Blue Cross of California.

"There’s no simple solution," Bernell said. "It’s going
to take a collaborative effort on (the part of) all of the stakeholders."

One idea toward that effort is legislation written by Sen. Sheila
Kuehl, D-Santa Monica. The proposed law would create a single, universal
insurance system run by the state.

The idea is that by eliminating the profit and paperwork generated
by 3,000 HMOs and private insurance companies, the system could provide
medical care for everyone at no greater cost.

SB840, the California Health Insurance Reliability Act, is pending
in the Assembly, but its fate is iffy. Although it is supported by
groups such as the Consumers Union, League of Women Voters and Congress
of California Seniors, it faces opposition from insurance groups,
business organizations and a likely veto from Gov. Arnold Schwarzenegger.

In his doctor’s office last week, Hector Hernandez met with Conejo
Valley Family Care Clinic Administrator Ivonne Hernandez to come up
with payment arrangements for his medical care. Weighing his options,
he sat in a chair, wringing weathered hands that showed the blackened
fingernails of a man who spends more time around motor oil than computers.
When he arrived at the clinic, Hernandez was irate about his bills
and it took Ivonne Hernandez some time to calm him down.

"He kept getting statements from us each month and he didn’t
understand that he must pay before his coverage kicks in," she
said. "A lot of employers, I don’t think, explain how it works."