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The Price of Illness: Cost Sharing and Health Plan Benefits

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Publication Date: September 2005

Publisher(s): California HealthCare Foundation

Author(s): Arthur L. III Baldwin; Marian Mulkey; Matthew Kagan

Series: Issue Brief: Insurance Markets

Topic: Health (Health care financing)

Type: Brief

Coverage: California


Rising health insurance premiums threaten to make coverage unaffordable for many Californians, prompting insurers to introduce plans with greater cost sharing. Such new insurance formulations often appear first in the individual market, which serves as a crucible for product innovations because purchasers pay 100% of their premium, making them particularly price sensitive. The California HealthCare Foundation (CHCF) asked Milliman, Inc. to calculate the out-of-pocket costs California consumers with different health care needs would pay under a range of policies. The analysis finds that individuals who purchase comparatively comprehensive coverage could still incur extensive medical expenses and run the risk of exposing themselves to unexpectedly high bills. Trends toward greater consumer costs over the past three years suggest that these risks are on the rise. Results for the San Francisco individual market are presented in the issue brief. Supplemental tables provide comparative data for the Fresno individual market, as well as results for the small group market in both regions. Researchers interested in conducting their own analysis of products and premiums from 2003 through 2005 can do so using the Excel spreadsheet provided.