Medical Costs

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.

Woodland Hills insurer Health Net Inc. slashed its full-year profit outlook for the second time this year as some of the company's customers incurred higher-than-expected medical costs. The news sent company shares tumbling $4.34, or 19%, to $18.36 in trading Friday. Health Net cut its 2012 profit forecast to a range of $1.45 to $1.55 a share, down from $2.85 to $3 a share. Analysts said it will be difficult for management to regain investor confidence after two consecutive disappointing quarters.

I would like to comment on your editorial "Medical Costs: Out of Sight" (Dec. 1) concerning the high cost of medical care. Recently, a friend of mine who had never been sick in his life, was stricken with a painful attack of diverticulitis. He had to be confined to a hospital bed for 36 hours while being treated with antibiotics. I picked him up when he checked out of the hospital and drove him to his home. Oddly, his greatest concern was not about the frightening attack from which he had just recovered, but about the cost of his hospitalization.

Any comedian can wring out empathetic laughs with an HMO horror story. Any politician can bring a tear with tales of managed-care mismanagement. It's hard to resist wanting to punish HMOs, to try to force them to give better care. That doesn't mean it's the right thing to do, since one of the aims of managed care has always been to dampen spiraling medical costs. Consider the raft of health coverage bills--18 of them--now pending in the California Legislature.

Cigna Corp. reported a decline in second-quarter profit due to rising medical costs that could also hurt results for the rest of the year. Cigna, the third-largest U.S. health insurer, said earnings fell 6% to $262 million, or $1.73 a share, missing lowered expectations, as revenue also declined 6%, to $4.7 billion. Cigna had lowered its profit forecast in May, citing higher-than-expected medical costs and a weak stock market that was hurting its retirement-plan business.

In an effort to offset the skyrocketing cost of unpaid hospital and emergency room bills, the Santa Barbara County Board of Supervisors voted to increase traffic fines and fees for other violations by 12%. Supervisors voted 4-0 to implement an emergency services fund that would levy an estimated $1 million annually in fines and other charges related to traffic violations to cover unpaid medical costs.