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Release date 04/06/2009
YONKERS, NY — A new Consumer Reports investigation finds that many people who believe they have good health insurance actually have coverage so riddled with loopholes, limits, and exclusions that it won’t come close to covering their expenses if they fall seriously ill. The full report is available in the May 2009 issue of Consumer Reports and online at www.ConsumerReportsHealth.org. The report includes a table listing the staggering treatment costs of many common conditions, leading off with late-stage colon cancer at $285,946.
At issue are so-called individual plans that consumers sometimes get on their own after losing their jobs or if they are self-employed. An estimated 14,000 Americans a day are losing their job-based coverage, cites Consumer Reports, and many may be considering individual insurance for the first time in their lives.
“Individual insurance has become a nightmare for consumers,” says Nancy Metcalf, senior program editor at Consumer Reports. “It’s expensive and difficult to get for people who have a less-than-perfect medical history. And people who do purchase a policy often don’t understand what they’ve bought until it’s too late and they’re faced with hospital bills that their plan won’t pay.”
One couple, Janice and Gary Clausen of Audubon, Iowa, told Consumer Reports that they expect to be paying off medical debt for the rest of their lives because they didn’t realize how much treatment can cost. The United Healthcare limited benefit plan they bought through AARP proved hopelessly inadequate after Gary Clausen received a diagnosis of colon cancer. His treatment cost well over $200,000.
Findings Show How Difficult it is for Consumers to Get Good Health Policies on Their Own
For its investigation, Consumer Reports hired a national expert to help evaluate a range of health plan policies and interviewed consumers who bought those policies, as well as insurance experts and regulators to learn more. Among the findings from the investigation:
“A good plan should pay for necessary care without leaving you with lots of debt,” Metcalf says. “Decent insurance covers more than just routine care — it’s supposed to protect you in case of a catastrophically expensive illness. But many individual plans do nowhere near this job.”
Consumer Reports identifies seven clues that a health plan might be junk:
Why all the confusion about health insurance? Consumer Reports says one reason is that health insurance is regulated by the states, not by the federal government. Most states (Massachusetts and New York are prominent exceptions) do not have a standard definition of what constitutes health insurance.
How Consumers Can Protect Themselves
A good plan will cover legitimate health care without burdening consumers with oversized debt. Consumer Reports offers the following advice for choosing a health plan:
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2009 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2009 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.