By JESSICA TOLEDANO
Be careful what you wish for, you just might get it. For health care consumers, that old saw will become painfully true in the years ahead. The pain won't be physical, however, it will be financial.
Consumers have been raising a ruckus for years about the shoddy treatment they've been getting at the hands of managed care companies. Health plans have been characterized as the modern-day equivalent of the robber barons cold-hearted and obsessed with the bottom line.
In response, government officials have taken several steps. Starting in 1999, health plans in California will be required to cover a lot more services including women being allowed to go to an OB/GYN without a referral, physicians determining patients' length of stay on mastectomies, and chronically ill patients given standing referrals.
Other new laws require health plans to pay for ambulance services for members who call 911; reconstructive surgery to repair or restore normal functions; and long-term pain medication for chronically ill patients over a certain time frame.
Under a continuity-of-care law, health plans that drop a physician must still cover visits to that physician by any chronically ill patients for 90 days after the contract is terminated.
But all these goodies cost money, big money. And health maintenance companies are not implementing them for free. They're already passing the added costs along to employers, and employers will be passing the costs along to workers or reducing or canceling benefits.
Premiums for 1999 went up from 5 percent to 20 percent. Contrast that with the last couple of years, when premiums rose about 2 percent if at all.
On average, companies in California already pay $3,646 per employee for health care benefits the highest in the nation and about 40 percent more than the U.S. average of $2,622, according to the California Manufacturers Association.
According to benefits consulting firm Watson Wyatt Worldwide, California companies will pay an average of 6 percent more for HMOs in fiscal 1999, 8 percent more for preferred provider organization plans and 5 percent more for point of service plans.
The ultimate bearer of these higher costs, say health care analysts, will be employees at smaller companies. "It is very frustrating," said Wayne Miller, owner of a small business in La Mirada. "Small businesses will not be able to offer health insurance, and we already have too many people without health coverage. This is going to be a big burden on me and my business."
Miller thought he could squeeze a little extra out to offer health benefits to his two part-time employees next year. He was wrong. Not only can't he offer insurance to his employees, he will barely be able to afford it himself.
"I am angry and there is nothing I can do," said Miller, whose Kaiser Permanente plan went from $450 a month to $525 a month for 1999. "The government is letting these companies get away with murder."
The health plans respond by explaining that they are merely charging customers an amount needed to cover the costs of complying with government mandates.
"If people want more benefits, access, protection and choice, yes, they are going to pay more and costs are going to go up," said Walter Zelman, president and chief executive of the California Association of Health Plans. "Almost in every case, increased regulation means higher costs."
In addition to new government mandates, other factors driving premiums upward include higher costs for pharmaceuticals and new technologies, and not being able to squeeze any more savings out of doctors and hospitals.
And the big issue on the horizon HMO liability could send premiums even higher. "Health plans are particularly concerned about the laws that might make them liable for physicians and hospitals. If that legislation becomes law, it is going to be a rough year," said Zelman.
If HMO liability (giving patients the right to sue their HMO for damages) becomes law next year, premiums would rise another 5 percent to 10 percent, according to industry analysts.
Yet another factor pushing costs higher is industry consolidation. The several dozen national health plans that formerly existed have today been whittled down to only a handful.
In California, six major companies now contract with 90 percent of employers. Kaiser Permanente, Health Net, Blue Cross of California, Blue Shield of California, Aetna and United Healthcare dominate the market. And the reduced competition that comes from consolidation deprives employers from having much leverage in negotiating contracts.
"Employers are left with less and less options," said Jeff Gorell, spokesman for the California Manufacturers Association in Sacramento. "Companies are left with little room for negotiation."
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