Across-the-board deductibles don’t make a lot of sense. In Priceless, I argued that whole categories of care should be transferred to the patient in some cases and there should be first-dollar coverage for other kinds of services. Austin Frakt seems to agree, reproducing this graph from the book, and remarking:
LASIK is an elective procedure, the purpose of which is well understood by the patient. I’m on board with the idea that insurance shouldn’t cover such things, or if it does, not the full cost and certainly not the marginal cost. All health procedures just like this are good candidates for the purview of John Goodman’s “New HSA.”
The issue is not whether the procedure is like LASIK surgery, however. The issue is whether choices by the individual will create costs for other members of the insurance pool. Where there are no “financial externalities,” the case for individual decision-making is strong.
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.
Almost a quarter of Americans have less than $100 in their emergency savings fund, according to a recent TNS survey for CashNetUSA. Of the 1,000 participants surveyed, a staggering 22.8 percent reported that if they needed to cover an emergency expense within one day, they would have less than $100 available.
Both males and females reported similar savings patterns, however, 55 percent of Americans with children under the age of 18 reported having less than $800 in emergency savings compared to 42 percent of those without.
Source: It’s Economic.
The Kaiser Family Foundation conducts an annual survey of employer-sponsored health plans. According to the 2012 survey, one-third (31 percent) of firms that offer health coverage offers a consumer driven health plan (CDHC) option. Approximately one-in five covered workers are in CDHC plan. Eleven percent of covered workers are in a Health Savings Account-qualified (HSA) plan in 2012 — up from 9% in 2011; while 8% are in an HRA plan in 2012 — about the same as in 2011.
About 149 million people are covered through an employer health plan. The report didn’t break down HSAs/HRAs by the number of people enrolled. But the data suggests that as many as 28 million people may be in an employer HRA/HSA plan.
The Treasury Department is seeking comments on whether it should eliminate or modify a rule that requires U.S. residents to use all the money in their tax-free health flexible spending accounts or forfeit the balance to their employer, National Journal reports.
Don’t tarry. Deadline is Friday. There is no reason workers should be forced to spend their Flexible Spending Account (FSA) funds in December on unnecessary purchases like prescription sunglasses rather than forfeit the money. With a tax free rollover, 35 million people would be added to the 27 million or so who already have a “use-it-or-save-it account” (Health Savings Accounts and Health Reimbursement Arrangements). So this could have a huge impact on health care markets.
Two unresolved problems: Would people be able to withdraw unused funds, pay taxes and spend the money non-health consumption? They should. Another restriction that needs to go is the rule that an unused balance in an employer FSA account precludes obtaining a Health Savings Account (HSA) because HSAs cannot coexist with other types of coverage that provide for first-dollar benefits.
HT: American Healthline.
AHIP’s latest census of HSA-qualifying insurance coverage contains some fascinating information. Keep in mind these numbers are for HSA-qualifying coverage only. It does not include HRA plans or stand-alone high deductibles.
The finding reported in most of the news stories is that enrollment in these plans grew from 11.4 million in January 2011 to 13.5 million in January 2012, an increase on 18% in one year.
This continues the steady growth documented by AHIP’s annual surveys. The trend line is unmistakable –
While politicians and policy wonks are obsessed over the latest to-ing and fro-ing in Washington, in the real world Health Savings Accounts continue to grow as the future of health care financing. To wit –
Milford, Indiana switched to an HSA program for the town’s nine employees effective July 1. An article in the Mail-Journal reports, “The change will nullify a 12 percent increase in the town’s cost for the next fiscal year and improve preventative coverage. In fact, the town will see a four percent — or $6,000 — yearly decrease in premium rates under Medical Mutual of Ohio. Covered employees will see their deductible rise by $500, but their post-deductible, out-of-pocket expenses will be covered at 100 percent — an improvement over the current plan.” The town will also contribute $200 to the HSAs of single employees and $400 to families.