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Monday, March 29, 2010

Medical Costs Weighed Less on Californians in 2001-2006 than in other States

LA Times

Californians with health insurance spent a smaller share of their incomes for medical care than insured people in most other states from 2001 to 2006, research has concluded.

Just 12% of those with insurance in the state faced a "high financial burden" for healthcare during that time, meaning they spent more than 10% of family income on insurance premiums and healthcare services, according to a report this week by the Center for Studying Health System Change.

That put California in the bottom rung of 29 states in the study, which looked at care received by people under age 65.

The 12% figure was the lowest among the states from 2004 to 2006. Arizona, Illinois and Georgia also had low rates during that time.

The study's author attributed California's showing to two factors: relatively high household incomes that made healthcare costs less burdensome, and large numbers of people served by health maintenance organizations, which charge lower fees than other traditional insurers but impose more restrictions on care.

"I'm sure there are a lot of people who feel the pain from high California health insurance quotes, but relative to other states, California was in pretty good shape," said Peter Cunningham, a senior fellow at the nonpartisan research center in Washington.

"If you were insured in California during the first part of the decade, you spent a lower percentage of your income on healthcare costs than you did in most of other states," Cunningham said.

The report did not factor in the effects of the recent recession or the effect of national healthcare reform.

It found that a growing percentage of Americans faced burdensome healthcare costs from 2001 to 2006. In 2001, 14% of those with insurance faced high financial burdens. Five years later, that figure climbed to 19%.

Cunningham said healthcare costs increased more dramatically for people who bought individual insurance policies compared with those who received coverage through their jobs. Prices in individual markets can vary more than in group markets because of the smaller size of the insurance pool.

The research pointed out that middle- and high-income people with private insurance experienced the greatest increase in financial burden over the six-year period. Even though they had more money to spend on medical care initially, medical costs rose faster than their incomes.