Tag: "Health Savings Accounts"

High Deductibles are More Common

The growing prevalence and amount of deductibles has resulted in an increasing percentage of covered workers enrolled in a plan with high deductibles. In 2012, about a third (34%) of covered workers were enrolled in a plan with a deductible of a $1,000 or more compared to 10% in 2006, and 14% were enrolled in a plan with a deductible of $2,000 or more compared to 3% in 2006. The percentages of workers include workers who are enrolled in a high deductible plans with a savings account (HDHP/SO), such as an HSA or an HRA, and those who are in a plan without a savings account.

Source: Kaiser Health News.

CDH Round Up

We haven’t reported on what is happening in the market for Consumer Driven Health in a while, so there is a lot to look at.

Blue Cross

We’ll start with a study by the Health Care Service Corporation (the Blue plans in Illinois, Texas, Oklahoma and New Mexico) on the experience of their customers with their CDH plan, known as BlueEdge. Enrollment in BlueEdge has passed 1.5 million people this year and this study tracks them from before they entered the Consumer-Directed plans, which include both HSAs and HRAs.

A press release reports that BlueEdge enrollees –

  • Were four percent more likely to use preventive services.
  • Reduced overall utilization by 12 percent.
  • Were 10 percent more likely to use generic medications.
  • Spent 24 percent less on inpatient and 8 percent less on outpatient services.
  • Reduced hospital ER care by 12 percent.

These are changes in behavior by the same people before and after they joined the BlueEdge program. Unfortunately, the study itself is not available to the public, but a summary on the company web site reports that the reductions grew over time, dropping by 9.1% in the first year, but by 11.4% over three years.

HSAs Increasingly Popular

America’s Health Insurance Plans has released its annual survey of Health Savings Account (HSA) plans. Here is Chris Jacob’s summary:

The survey finds that as of this January, 13.5 million Americans are enrolled in insurance plans compatible with HSAs — an increase of more than 18% compared to January 2011. What’s more, enrollment remains evenly distributed along age and gender lines, disproving the notion that HSA insurance policies favor the young and healthy. And the survey also demonstrates that most HSA plan holders have access to tools, including price and quality data, that can make them better consumers of health care.

HSAs Under Attack

Three separate provisions in the statute, and regulations implementing the law, will reduce access to HSA plans:

  1. ObamaCare’s essential health benefits package contains new restrictions on deductibles and cost-sharing, which will prevent at least some current HSA plans from being offered.
  2. ObamaCare’s medical loss ratio regulations also impose new restrictions that studies show will hit HSA plans particularly hard, and could force individuals to change their current form of coverage.
  3. The ObamaCare statute does not specify that cash contributions made to an HSA will be counted towards the new federal actuarial value standards.  And a February bulletin released by HHS in advance of upcoming rulemaking indicates that under the Administration’s approach, not all contributions into an HSA will count towards the new minimum federal standards – meaning some HSA policies will not be considered “government-approved.”

More from Chris Jacobs on ObamaCare’s negative effect on health coverage.

Shopping for Care

Castlight Health [is a] nascent health care start-up…with the goal of giving insurance subscribers meaningful information on health care costs. Castlight, in the simplest terms, wants to bring comparison shopping to health care.

It launched, last year, a Web site where employees on [Health Saving Account] plans can compare what doctors charge for the same service. The site…also includes other patients’ quality rankings of doctors, alongside information on what remains in an individual’s account.

More from Sarah Kliff at Ezra Klein’s blog.

High Deductible Health Insurance

Question: If I asked you to point to the most obvious examples of wasteful health care spending, where would you direct me? This is a no brainer. There is nothing more wasteful than first-dollar health insurance coverage. Even deductibles as low as $1,000 or $1,500 are incredibly wasteful in many places. By that I mean that if you choose a higher deductible, the premium savings is greater than the additional expense you are exposed to. That means you can put some of the premium savings in the bank to cover the additional risk exposure (dollar-for-dollar) and still come out ahead.

Second question: When is the last time you saw an article in Health Affairs or any other health policy journal pointing out this obvious way to eliminate waste? My guess is that your answer is “never.” I’m sure you have seen articles about the hazards of high deductible insurance. Why are the journals so reluctant to focus on the benefits?

Every serious study that has ever been done on the subject has found that patients spend less on health care when they are spending their own money. The latest study by the RAND Corporation estimates that families with high deductible plans and Health Savings Accounts spend about 30% less than families with conventional insurance. And that’s with HSA plans designed by Congress. Think how much more effective the accounts could be if they were designed by the marketplace.

Further, no patient group was harmed by the switch to high-deductible insurance — not even vulnerable populations. This echoes the earlier findings of the RAND Health insurance experiment more than 30 years ago.

Ooh I’m driving my life away,
looking for a better way,
for me

A Better Way to Slow Medicare

A report that will be released this week by the American Enterprise Institute finds that competitive bidding can save more money than the President’s budget proposals without endangering the care of millions of seniors. The authors—Roger Feldman of the University of Minnesota, Robert Coulam of Simmons College, and Bryan Dowd of the University of Minnesota—estimate that competitive bidding that includes all Medicare plans could save $339 billion over a decade. That is the approach taken by Sen. Ron Wyden (D-Ore.) and Rep. Paul Ryan (R-Wis.) in their bipartisan Medicare reform proposal.

Better yet, these savings reflect what health plans already say they can do. They are based on the actual bids of Medicare Advantage plans and the actual cost of traditional Medicare to provide full benefits without scrimping on health services.

Full article by Joseph Antos. AEI study here.

BREAKING: Regulations Threaten HSAs

A new report by Milliman Inc. says that high-deductible health plans, including those with health savings accounts (HSAs), will likely be more adversely impacted by the medical loss ratio requirements under the Patient Protection and Affordable Care Act (PPACA) than other types of comprehensive medical plans.

“HSAs were widely anticipated to be the low-cost bronze plans for consumers under the Patient

Protection and Affordable Care Act,” said Kevin McKechnie, executive director of [the American Bankers Association] HSA Council. “The medical loss ratio requirements make this very difficult…”

Press release. Previous post on Roy Ramthun’s white paper.

Kaiser Health News Explains HSAs

In an article ostensibly designed to answer frequently asked consumer questions about Health Savings Accounts (HSAs), Kaiser Health News has this to say:

  • “HSAs can be confusing.”
  • “HSAs have two basic elements: A tax-preferred savings account…and a high deductible health insurance plan…any adult with a high-deductible health plan and no other form of health care coverage can establish one of these accounts.”

[Translation: you probably don’t want one of these.]

In the rest of the article HSAs/high-deductible health plans are described as a way for employers to control costs, as problematic for low-income individuals, as having a straitjacket design, as requiring consumers to pay the full-dollar amount of their medical expenses until they meet their deductible, and as discouraging certain types of medical care.

Three Cheers for Sen. Hatch

The Family and Retirement Health Investment Act of 2011 will:

  • Allow a husband and wife to make catch-up contributions to the same HSA;
  • Remove the onerous new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs;
  • Allow individuals to roll-over up to $500 from their FSA accounts;
  • Clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible;
  • Reauthorize the use of Medicaid health opportunity accounts;
  • Promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and better diet;
  • Allow seniors enrolled in Medicare Part A to continue contributing to their HSAs; and
  • Allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars.

Read full post on the Family and Retirement Health Investment Act of 2011.