The Health Shopper

Business Week has a long feature that suggests that many colleges and universities offer inadequate coverage to their students. Many insurance plans have low caps on insurance reimbursements-for example, Connecticut College enrolls its students in an Aetna sponsored plan that caps its reimbursements at $10,000, while other colleges, such as Ross University, have plans with daily reimbursement limits that don't cover hospital expenses. According to a recent report by the General Accounting Office, more than 50 percent of college students have health plans with benefit limits of $30,000 or less.

Business Week also notes that in many instances, college students and their families are spending nearly as much on these inadequate plans as they would spend buying coverage in the individual market.   

A new study from Consumer Reports finds that prices for prescription drugs can differ by more than $100 for a prescription, even at different individual stores within the same chain. Consumer Reports researchers shopped at 163 pharmacies for four different drugs and found that, in general, Costco stores tended to offer the best prices while Walgreens and Rite-Aid were typically the most expensive. Kmart and Shopko offered the best prices on brand name medication, while Target and Wal-Mart offered low-cost generic medicine.

Wal-Mart announced that it is introducing further price reductions for generic medications to consumers. Consumers will now be able to purchase 90-day supplies of generic medicine for $10 and will continue to be able to buy $4 a month prescriptions for generics. Additionally, Wal-Mart stores will be lowering prices on a number of women's health drugs-such as generic medicine to treat osteoporosis-and will be offering most over-the-counter medicines at $4 or less. Wal-Mart officials say that "Up to 95 percent of the prescriptions written in the majority of therapeutic categories are included in the $4 Prescription Program" and claim that consumers have now saved $1,163,726,502.08 by purchasing generic medications through the company.

Health insurance costs for employer-based insurance rose by 30 percent from 2001 through 2005, according to a study by the University of Minnesota's State Health Access Data Assistance Center. Insurance costs jumped from $8,271 to $10,778 for the average family. Rising insurance costs drove 36,000 employers to drop insurance coverage for employees altogether, causing 4 million people to lose employer-sponsored insurance.

As we previously noted, families-not employers-suffer the most when insurance costs increase. Employers continued to pick up the same percentage-about 76 percent-of insurance premiums between 2001 and 2005. At the same time, average family incomes during this period grew at an anemic three percent, suggesting that rather than give employees more money, employers gave more money to insurance companies instead.

A new study from the Kaiser Family Foundation and the Urban Institute suggests that for every percentage point increase in unemployment, 1.1 million more Americans will lose health coverage. An additional 600,000 children and 400,000 adults, according to the study, will move onto public insurance programs such as Medicaid and S-CHIP, which would cost a total of $3.4 billion in state and federal revenues. The New York Times notes increasing health costs coupled with concerns about the economy is also impacting individuals with health coverage. In a recent poll cited by the Times, 42 percent of adults said that someone in their family had foregone medical treatment due to cost.

A study by Katzenbach Partners finds that customer service in the health care industry lags behind service in most other industries. According to the study, 26 percent of respondents had switched or thought about changing doctors due to an unpleasant experience, and nearly as many have used or thought about using retail clinics to avoid doctors and hospitals. Two in five said that banks provide better service than health providers, while one in five said that airlines provide better service.

According to Katzenbach's researchers, poor customer service impacts care quality and cost by causing consumers to shop around for doctors unnecessarily-leading to different doctors to duplicate tests. Consumers who do not trust doctors may be less likely to seek out treatment when necessary or understand and comply with follow up care instructions.

Fast Company has a long, interesting story about how health consumers can save money through medical tourism. According to the article, as many as 500,000 Americans traveled abroad to save money on medical care last year to hospitals where treatments cost as little as one tenth of the American price. As one person quoted in the story notes, for many consumers, ""Your options are paying $50,000 to $60,000 in the States or coming here and paying $8,000… That's the difference between putting it on your credit card or going into bankruptcy." The story also notes that a recent McKinsey study estimates that up to 20 percent of hospital visits in the U.S. could be safely outsourced-which could help save the health care system $390 billion.

The New York Times has an interesting article on some of the challenges that early retirees face in finding health insurance. The article notes that for most people-especially those with no existing medical concerns-"the best, least-expensive option is to buy an individual policy" rather than opt into COBRA coverage through an employer. The story focuses on a couple in their early 60s who decided to leave their jobs before they were eligible for Medicare who were able to find an individual insurance policy for about $400 a month, which was about half the cost of paying for COBRA coverage. The couple did, however, have to spend some time shopping around due to some minor pre-existing medical conditions.

The article also offers another key point for early retirees: When leaving a job, individuals have 60 days to start COBRA coverage-that is, opt to pay to remain on an employer's plan-or else lose the option. As the Times notes, many early retirees may want to opt into COBRA initially until they have found coverage elsewhere.

Consumers paid less for drug co-pays in 2007 than they did in 2006, according to a new study from Express Scripts. Although the decrease in the average co-pay was small, it stemmed from smart consumer behavior. Since 2002, consumers have switched over to generic medications in large numbers, as generic drugs now account for 64 percent of prescriptions, up from 42 percent in 2002. According to Express Scripts, consumers save an average of $15 per prescription when buying generic.  

President Bush has threatened to Veto a tax bill that could substantially raise administrative costs for HSAs. H.R. 5719, which passed by a vote of 23-17 through a House of Representatives committee, would require that banks and other HSA administrators have tools in place to verify that individual spending from the accounts goes toward qualified expenses. Currently, banks or other administrators do not need to confirm that HSA funds are used on health related expenses.

Proponents of the change say that the bill would help the IRS ensure that individuals who use HSAs for non-health expenses are taxed appropriately. Opponents of the bill argue that the regulations are unnecessary and would force banks to build elaborate verification systems that they would pass on to account holders through substantial fee increases.