healthcol/mike1st/mark2nd

BEN SULLIVAN Staff Reporter

Tis the season for studies, and one of them out last week paints a somewhat ominous picture for local and state health care.

A UCLA study touted as the first comprehensive analysis of California health insurance found that the number of uninsured in the state continues to rise, despite efforts to make coverage more affordable.

A total of 6.6 million Californians, including nearly 2 million children, are without health insurance, the study found, with 84 percent of the uninsured being members of working families. Sixty percent of uninsured adults are full-time employees or dependents of full-time employees, and just 57 percent of Californians have job-based health insurance, compared with 66 percent nationally, the study found.

Conducted jointly by the UCLA Center for Health Policy Research and the UC Berkeley School of Public Health, the study confirmed that Los Angeles continues to have the largest proportion of uninsured residents in the state and in the nation, with one-third of the county's non-elderly residents without coverage.

In addition, more than one-third of the uninsured surveyed statewide said they did not go to a doctor in 1996, even when they needed care, because of cost.

"Health insurance is simply unaffordable for many people," said Richard Brown, a professor at the UCLA School of Public Health and one of the study's principal authors.

The study found that California health insurance companies use pre-existing conditions and other "individual characteristics" to price premiums and exclude certain people from getting coverage.

A highlight of the study was the success that employer purchasing groups have had with the insurance industry. The cooperatives' premiums dropped overall three years in a row.

Researchers recommended in a supplemental report that the state subsidize low- and moderate-income individuals who must buy their own health insurance, and that tax incentives should be offered to employers to encourage them to offer coverage to their employees.

The UCLA study came on the heals of a national survey conducted by KPMG Peat Marwick that found managed care continues to gobble up the nation's health insurance pie. Three out of four insured U.S. workers received coverage through managed care in 1995, the most recent year for which statistics exist, compared to 50 percent just two years before.

Finally, a benchmark annual survey of managed care released last week states that HMOs intend to raise premium costs to employers 4 percent this year, compared to just 2.5 percent in 1996.

The survey, by consulting firm Foster Higgins, found that the increase in cost is being driven largely by doctors and hospitals officials who, tired of having their reimbursement fees cut, are banding together and gaining more negotiating leverage.

In Southern California, total employee health benefit costs fell 4.7 percent last year, to an average of $4,013 per employee.

HMOs reprimanded

All the claims by managed care companies about how they would improve customer service have not been matched by actions, according to the California Department of Corporations, which handed out more than $500,000 in fines last week to 43 California HMOs.

Among those targeted were 13 Los Angeles County-based HMOs, including FHP, Kaiser Permanente, Pacificare of California, Watts Health Foundation and WellPoint Health Networks. Together the L.A. fines totaled more than $200,000.

The fines stem from alleged failure by the health plans to adequately inform members that they can register complaints against the HMOs via a 1-800 telephone number.

A law requiring HMOs to provide members such information went into effect Jan. 1, 1996. HMOs had publicly supported the legislation when it was passed by the state Legislature in 1995, coming at a time when the industry was under attack by consumer groups and patient advocates for alleged callousness toward patients and an over-emphasis on profits.

The Department of Corporations instituted the toll-free number in late 1995. The legislation required HMOs to notify enrollees of the number and of their right to submit unresolved complaints to the DOC. Such notification is to be provided to members in enrollment documents, such as plan contracts, evidence of coverage and complaint forms.

DOC Commissioner Keith Bishop said the failure of so many health plans to meet the law's requirements after a year was "disturbing and unacceptable."

"We take the new disclosure requirements very seriously, and we require the managed care industry to do the same," Bishop said in a prepared statement.

Several of the health plans expressed surprise at the fines.

"Their letter doesn't lay out specifically what it is that they see as a problem," said Kaiser spokesman Jim Anderson. "So many of the (state's managed care) organizations are involved here that there's got to be some confusion somewhere. Our people have done an internal audit of what we've done in response to law, and we're very confident we've done everything we're supposed to do."

Kaiser was fined $40,000.

WellPoint, also fined $40,000, said it too was surprised by the fine.

For reprint and licensing requests for this article, CLICK HERE.