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'Bare-bones' insurance for health called failure Only 197 enroll in Blues plan in Md.


WASHINGTON -- Attacking the health insurance industry, a consumer group charged yesterday that "bare-bones" policies sold in many states had failed to expand coverage of the uninsured.

In recent years states have waived rules requiring insurers to offer certain benefits, enabling companies to sell comparatively low-priced plans with fewer services. The goal has been to make basic insurance affordable for 35 million uninsured Americans, including 650,000 in Maryland.

But Blue Cross and Blue Shield of Maryland reports that only 197 people are covered under its "core" benefit policy, the cheapest but least comprehensive individual plan it sells, the group Families USA found in a study. In some of the other 19 states where these policies have been marketed, no one has purchased them, the group said.

"Bare-bones insurance is the biggest marketing disaster since New Coke," said Ron Pollack, executive director of the group, asserting that Americans reject such policies because they want comprehensive health benefits. Families USA is supporting the Clinton administration's efforts to develop a comprehensive plan for health care reform, expected to be announced in September.

Mr. Pollack questioned the value of the policies, noting that they typically limited hospital stays, demanded huge out-of-pocket spending by policyholders in the form of deductibles and co-payments and limited the dollar value of annual or lifetime benefits.

"Americans want one thing from health insurance: peace of mind that your family is absolutely protected," Mr. Pollack said. "That's why bare-bones insurance has proved to be a total failure."

He accused the insurance industry of pushing such policies as a diversionary tactic to avoid real reform, a claim that the Health Insurance Association of America hotly denied.

The industry group accused Families USA of misrepresenting its position and said insurers thought that "comprehensive health reform is imperative."

Yesterday's exchange between these two groups, which are often at odds, underscored how key players in the health reform debate are fighting to sway public opinion. Drug companies and doctors have been particularly active, with advertising and news events, and other groups vow to join in the war of words once the administration releases its plan.

Families USA said its study, funded by a grant from the health issue-oriented Robert Wood Johnson Foundation, is the first detailed, state-by-state look at these policies. Thirty-one states have approved their sale, and they are being marketed in 20 states.

The study, looking at the 16 states where the policies have been on the market the longest, found that in 11 states, fewer than 300 people are covered. In states where the most policies have been sold -- led by Oregon, where 18,345 people are covered -- consumers were offered more kinds of plans and benefits than in other states, the group said.

In Maryland, Blue Cross and Blue Shield is the only major insurer offering one of these policies. "Core plan one," as it is called, costs from $66 to $156 a month for an individual, depending on the age of the purchaser and the size of the deductible. For a family, with the parents in their late 30s and a deductible of $500, the cost is $211. The plan requires a 25 percent co-payment for services.

There's an annual $50,000 limit on services, which include 10 days of care in a hospital, maternity and newborn care, 10 outpatient visits, prescription drugs worth up to $500 a year, outpatient mental health care, outpatient surgery, diagnostic testing and primary care services such as mammography, immunizations and routine examinations.

The company offers a slightly more expensive but more comprehensive plan called "personal comp" that has attracted 29,000 subscribers.

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