Who’s Opposed to Informed Choices on Health Insurance by Californians?

[courtesy of California Progress Report]

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

I'm a good bargain shopper. (My prize: 10-piece set of top tier Calphalon pots once for $70) Here are my rules for assessing a good bargain:

1. Is it a known product (do I know it's a quality product -- like Calphalon);
2. If it's marked down, is it a good price compared to other similar products;
3. Lastly, will I use it (because it does me no good to get a good deal on shoes if I'm not going to wear them...and I've done this way too much).

This mental checklist is meant to ensure that the product is of value to me.

Which brings me to the letters submitted by the health insurance industry SB 1522 (Steinberg), which create standards for health insurance that would enable any person to go through such a checklist when buying insurance on their own. (See our Fact Sheet on SB 1522.)

In short, SB1522 would:

1. Classify health plans into five "tiers'' so consumers would know what they were buying - i.e. a top tier plan means comprehensive, bottom tier means "catastrophic.'' (Known/quality product)

2. Insurers would have to have at least one plan in eacth tier, enabling apples-to-apples comparisons.

3. Establish minimum benefits, which would weed out junk insurance -- such as "hospital only'' plans that barely covers the hospital visit. (will I/can I use it?)

Let's step back a bit. Let's say you don't receive health insurance on the job now and have to go out and scavenge for a decent plan. Go to http://www.ehealthinsurance.com/ and you'll get hit with 107 plans with all manner and range of co-pay, deductible, premium, office visit policies.

The "choice'' argument: Insurers argue that SB1522 will lead to a reduction in consumer choice. First off, their argument is bogus. Choice will still exist; it will just be more organized and limited. And limiting choice for consumers is actually a good thing, according to research on a parallel issue-401(k)s (the research on choice can also be applied to choosing ice cream, jams and insurance policies):