Coloradoans face difficult health care decisions

Choosing among options for health insurance is often an emotional -- rather than practical -- decision.

People look at plans that allow them to use the doctor they've gone to for years, the hospital nearest their house or simply the plan that costs the least.

But is that the best way to choose?

Health insurance is getting more complicated and more expensive, with riders and exemptions in the fine print of every policy, said Steve Berkshire, a human resources professor at Regis University.

"People should look at more than just the fact that the hospital is close by, or the doctor they're used to is on the list," he said. "They need to look at costs, too. But they also need to be more aware of what is covered and what isn't. They need to be sure of their own responsibilities."

The new consumer-oriented, high-deductible, low-premium health plans are an example, he said. People purchase them because the out of pocket costs are lower, but then discover that they are immediately responsible for thousands of dollars in health care payments.

"That can be a big surprise," Berkshire said. "Particularly if people are used to a PPO plan, then opt for the HSAs or high- deductible plans. The most important thing is to just keep in mind how much you will be expected to pay out of pocket."

Tom Voake, a partner in Effective Choices, a group benefit specialist team that is part of Strategic Financial Partners, said consumers should take their doctors and hospitals into consideration when choosing a plan

"Access to providers is a really big deal for a lot of people," he said. "Whenever we're discussing options with small businesses, that's one of the things we look at. And if you're with a really big employer that might offer plans from different insurers, it's something you have to look at."

The consumer-directed plans -- the health savings accounts and high-deductible, low-premium plans -- are gaining in popularity, he said, and people who choose them are staying with them.

"I think we're seeing a big increase because people are understanding what they're for and how they work," Voake said. "I imagine we'll be seeing more of those plans as people get more information about them. They'll understand what's good about them, bad about them -- and whether or not they are the best ways to spend their money."

Changes on the horizon

The consumer-driven plans have some changes that will take affect during the upcoming enrollment period -- for plans that start Jan. 1.

The biggest change is that the maximum contributions to HSAs are no longer tied to the amount of the deductible. Voakes said that participants now can contribute $2,850, regardless of the amount of the deductible. Consumers are 55 or older, can add an additional $800 to that amount.

"Another thing different about the HSAs is that people can put the entire annual amount in -- no matter when they signed up. Before, they had to put a monthly amount in, and catch up during the year. Now if they sign up in November 2007, they can put the entire $2,850 in at one time."

The biggest issue for the upcoming enrollment period is cost. Voakes said that many people simply do not realize the actual cost of health care procedures.

A 2006 Consumer Attitudes Survey conducted by Great-West Healthcare showed that the average consumer could guess the price of a new automobile within 5 percent, but consumer perception about how much a routine doctor's office visit, an ER visit and a four-day stay at a hospital were off by 52 percent, 70 percent and 61 percent, respectively.

Those figures don't surprise Rob Rush, director of business development at Memorial Health System.

"People don't understand how much health care really costs," he said. "And that's why those high-deducible plans don't work. They simply don't have the deductible saved."

What kind of health plan would providers like to see?

"The kind that offers reasonably priced premiums with the largest number of services covered," Rush said. "But as health care gets more expensive, those kinds of plans are difficult to find."

Broker/provider conflict

And that's where providers come in conflict with insurance brokers. Most brokers like the low premiums that come with the high- deductible plans, Rush said. But hospitals are discovering a direct correlation between high-deductible plans and rising bad debt.

"Brokers don't like to hear it, but we've seen an increase in bad debt with the introduction of those high deductible plans," Rush said. "We've seen plans with deductibles as high as $7,000 -- people don't have that kind of money saved. It's basically insurance companies shifting the risk to the consumer."

Voakes said the problem isn't the plans.

"That's an individual problem," he said. "That's a problem with individual responsibility for their bills. It's not the plans that are at fault."

The hospital wants people to have commercial insurance, Rush said. A high number of people with commercial insurance actually translates into lower hospital and health care bills.