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Updated 10:00 AM December 4, 2006




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Grass-roots approach to health insurance
leads to more equitable 'game' plan

Many states, counties and cities are considering how to provide new health insurance options for the 45 million Americans who lack health coverage.

Questions to consider include which treatments and preventive measures to cover, how much to charge for doctor's visits and trips to the emergency room, which doctors and hospitals will accept them and how much will they cost.

A new study published in the November issue of the journal Health Affairs reveals a promising way to deal with this thorny problem: Let the public decide.

In fact, the study suggests, grass-roots decisions about what's fair and what's affordable may lead to plans that will be acceptable to participants and less costly than average health plans.

Using a gamelike computer program called CHAT (Choosing Healthplans All Together) developed by U-M and National Institutes of Health researchers, the study involved 798 California residents from diverse backgrounds who took part in a project that asked them to design the best possible health plan for the uninsured, using a limited amount of dollars.

"When the public participates in designing basic benefit plans for the uninsured, they make well-reasoned trade-offs," says co-author Dr. Susan Dorr Goold, associate professor of internal medicine and health management and policy, director of the Bioethics Program at the U-M Medical School and co-inventor of CHAT.

"This kind of participation may be key to developing plans that prospective participants will choose and will accept, especially when coverage is mandated as in Massachusetts' recently enacted health reform," she says. "A publicly-designed plan that limits coverage may be more acceptable to them than one designed from the top down."

Individually and in small and large groups, the 798 participants picked from a range of options—including different coverage levels for preventive, chronic and last-hope care; different options for access to doctors; a variety of co-pays for appointments, hospital stays and ER visits; options for dental and vision care; different premium levels and more.

Each of the options "cost" a certain number of points, which were calculated based on actuarial estimates of the real-world costs of those coverage options. Just like in the real world, points (dollars) available to spend were limited.

In the end, the participants agreed on what to cover, what kinds of trade-offs to make, and how much would be reasonable for participants to pay out of their own pockets. The result was a package that, for example, would pay for the least-expensive medicines first for chronic diseases including diabetes; give basic care for pregnancy, mental health and rehabilitation; and cover only proven preventive tests and exams. But it wouldn't cover last-ditch catastrophic care, extraordinary end-of-life care, and conditions that interfere with quality of life but aren't seriously disabling.

In all, the authors calculate, the plan would cost two-thirds of the average cost for insurance plans in California. Still, the study participants didn't elect to make participants pay the maximum out-of-pocket costs.

Goold and a graduate student, Nancy Baum, address that very issue in a new essay in the Hastings Center Report, a leading medical ethics journal. The essay examines the potential impact on individuals depending on how "affordable" is defined—and how insurance premiums, deductibles and co-pays are set—by the Massachusetts board called the Connector.

Although the Connector board includes representatives from stakeholder groups, it may benefit from seeking further public input into the plans it designs before finalizing them, the authors say.

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