Millions of Americans who get health insurance through their employer may be hit by high co-payments when they can least afford them. Employers are shifting more responsibility for health-care decisions to employees, according to "The unraveling of health insurance" in the July issue of Consumer Reports® (CR) magazine. This report is posted in the free Consumer Advice area at http://www.ConsumerReports.org. Emerging strategies, designed to drive down costs for insurers and save money for employers, are resulting in higher co-payments and deductibles for consumers. Consumers should be wary of the personal health account, a new type of policy recently endorsed by President Bush, that may leave employees significantly underinsured when they are injured or sick. "Health-insurance plans are changing, and people are paying more out of their own pockets for their health care," says Trudy Lieberman, Director of the Center for Consumer Health Choices at Consumers Union, and author of this report. "This is a long-term trend that does not look good for consumers." For consumers who have insurance through their employer, this report explains the new cost burdens coming their way, and how they might select among the new health-care-coverage options. It provides a road map to complex laws designed to protect health coverage for those leaving or losing their job, including the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA). CR includes recommendations and steps consumers should take to protect themselves. Some of the 75 percent of all U.S. adults under age 65 who get their health insurance through the workplace are already feeling the pinch of rising costs. Consumers insured through their employers may think they have almost complete coverage for medical expenses, but the effect of increasing co-payments and deductibles doesn't become apparent until they become sick or disabled. Thirteen percent of insured consumers did not fill a prescription in the previous year because of cost, and 17 percent were unable to pay their medical bills, according to a national survey of people ages 19 to 64 conducted by The Commonwealth Fund, a New York-based philanthropy. For employers, health insurance premiums are rising steeply because of increased costs for hospital services and for prescription drugs. The theory behind the employer trend to shift responsibility for health-care decisions is: If employees must decide how and when to spend their limited health-care dollars, they will use doctors, hospitals and medicines more judiciously, thus driving down costs. One problem with this theory is that employees will most often be making these decisions when they are sick. Whether they are qualified to do so, and whether they should do so, are medical and social questions that health-care experts and consumer advocates are only starting to confront. The three major emerging strategies are: Make the employee pay more for health care, sometimes a lot more, through higher co-payments and deductibles. Personal health accounts: Each year, employers deposit money in an account in the employee's name that can be spent only for health care. Disease-management programs, which focus on improving people's health. Of the three strategies, the disease management programs cause the least economic pain for employees. Consumers Union, the non-profit publisher of Consumer Reports, believes that personal health accounts will undermine the adequacy of health coverage in the U.S. Given the high current costs of COBRA policies, Consumers Union also believes Congress should subsidize health insurance for workers displaced by the recession. With no viable solutions in sight, consumers should take some steps to protect themselves: Prepare for the future: It's wise to budget for health-care expenses even if you think you have good insurance. Don't be tempted to "go bare:" Opting out of health insurance at work may save you money in the short term, but it can prove disastrous later on. Be wary of personal health accounts: Are you sure you'd be willing to promptly spend from your account for needed care, or would you be tempted to build the account and perhaps neglect your health? If you are offered a disease-management program, and the services seem likely to improve the quality of your medical care and teach you better self-management, it could be a good bet. To arrange an interview with Trudy Lieberman, call Joan Eve Tripi at 914-378-2436 or Jennifer Shecter at 914-378-2402. Support for this research was provided by The Commonwealth Fund. The views presented here are those of the authors and should not be attributed to The Commonwealth Fund or its directors, officers, or staff. The July 2002 issue of CR will be available June 18 wherever magazines are sold. To subscribe, call 1-800-765-1845. The material above is intended for use by legitimate news entities only. It may not be used for commercial or promotional purposes. Consumer Reports is published by Consumers Union, an independent, nonprofit testing and information-gathering organization, serving only the consumer. 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