NCPA - National Center for Policy Analysis


November 6, 2008

Despite the sincere effort being made, health care reform in Utah and nationwide is destined to run in circles unless everyone gets serious about medical costs and affordability.  Yet, reformers are stuck in a rut of parsing out what's unaffordable: medical care will equal the average Utah household's income in less than 10 years and Medicaid coverage for poor Utahns is on a track to equal the entire state budget in about 15 years.  That's why a new plan from Utah insurers aims to make between-jobs insurance more palatable by offering coverage that's less comprehensive but cheaper, says Deseret News.

The plan will modify the currently expensive COBRA program, which allows workers to keep their employer sponsored insurance for while after leaving a job.  The key to making the system transparent is revealing the cost of care, which continues to rise at double-digit inflation and with no end in sight, says Deseret:

  • Deductibles would be high -- between $2,000 and $4,000 -- and the plans don't offer everything required by state rules for standard plans.
  • But premiums could cost less than half as much as the premiums in typical group plans.
  • The plan echoes the direction many employer-sponsored plans are moving -- higher deductibles, lower premiums.
  • States, too, are trying to figure out ways to offer low-income citizens lower premiums, sometimes by offering limited coverage.

Moreover, the proposal is part of a broader effort to figure out ways to reform the health insurance market in Utah.  Supporters hope it will help to radically restructure incentives in health care, such as rewarding wellness and health improvement, not the number of medical procedures rendered. 

But state leaders suggested it was only a stopgap measure.  Without a reduction in overall costs, it's not sustainable to offer affordable products on the market, says Deseret.

Source: Editorial, "Utah Tries Cheaper COBRA Alternative for Health Insurance," Wall Street Journal, November 4, 2008; based upon: James Thalman, "Health-care reform on a merry-go-round," Deseret News, October 31, 2008.

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