COST: What Makes Insurance ‘Affordable’? Lessons For Massachusetts And Beyond
June 11th, 2007
by
Chris Fleming
|
As Massachusetts and an increasing numbers of other states seek to expand health insurance coverage, the question of how to determine whether coverage is affordable is front and center. In a Health Affairs paper [1-week free access] published last week, researchers say cost considerations must include more than premiums. Linda Blumberg of the Urban Institute and coauthors propose basing the affordability benchmark on the amounts now devoted to health spending by privately insured individuals.
“Because of the highly skewed distribution of health care spending and the large potential variation in plans’ actuarial values, affordability must take out-of-pocket liability into account in addition to premiums,” write Blumberg and colleagues. Their analysis was done to assist Massachusetts in implementing its reforms, but the findings are relevant for any state that is considering requiring its citizens to purchase coverage or attempting to determine appropriate cost-sharing levels, the authors say.
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