Tag: "HSA"

Still No Transparency in Medical Pricing

Entrepreneur David Williams has good insight into the limits of Health Savings Accounts as tools of consumer empowerment, discussing:

…… a consumer who did his darndest to find a good deal on a CT scan, finally settling on the $475.53 price at Coolidge Corner Imaging.

But the bill he got later was for $1,273.02 — more than twice as much — from a hospital he had no idea was connected to the imaging center.

“I was shocked,” said White, a doctor of physical therapy who thought he knew his way around the medical system. “If I get tripped up, the average consumer doesn’t have the slightest chance of effectively managing their health expenses.”

The patient wasted tons of time and effort trying to get the problem cleared up. He cared since he had a high deductible plan.

In my view, high deductible plans are a pretty crude instrument to encourage cost consciousness and price transparency. (David Williams, MedCityNews, June 2, 2015)

I agree. NCPA has long championed HSAs. However, stories like the one discussed here are too common. HSAs need to become more than a way to shift costs from premium to out of pocket. Health insurers need to get out of the business of fixing prices.

If we had not been distracted by Obamacare, we might be there by now. Hopefully, we’ll be back on track before too long. I have proposed a “common law” solution to the problem of price transparency. Read more about it here.

Consumer-Driven Health Care Round Up

Lots going on in the Consumer-Driven space these days.

AHIP released its latest version of the annual HSA enrollment census. The results are impressive, though still understated since they only received responses from 71% of the companies. It finds enrollment growth of about 15% every year, now reaching 17.4 million. Perhaps the most interesting aspect is the state-by-state breakdown of market penetration. The old Red State/Blue State divide does not hold up when it comes to market behavior. Some of the states with low enrollment include Mississippi, Alabama, and South Carolina, while some of the highest enrollments are found in Minnesota, Illinois, and Maine.

AHIP also released, along with the American Bankers’ Association, a report on HSA account activity. One notable tidbit from this report is the size of the contributions, both personal and from employers. The average personal contribution in 2012 was $2,337, and the average employer contribution was $1,142. Also interesting is that only 19% of all the accounts had $0 balances at the end of the year, indicating that most people are retaining funds in their accounts at least for future use, if not for long-term savings.

Dr. Ben Carson has become a passionate advocate for HSAs, seeing them as a viable alternative to much of Obamacare. An op-ed he wrote has been widely circulated.

Patient Power Works: Significant Savings for Employers and Beneficiaries

We previously discussed the executive summary of CIGNA’s 8th annual Choice Fund experience study, which reports outcomes from 2.6 million beneficiaries of CIGNA’s consumer-driven employer-based health plans (that is, plans which are paired with a Health Savings Account or Health Reimbursement Arrangement). CIGNA has just released a much more detailed presentation of the results.

The presentation clarifies that the improved outcomes control for health status. That is, they compare “apples to apples”, and the results are not due to healthier people choosing consumer-driven plans and sicker people staying in traditional plans. Newly shared outcomes include:

  • Choice Fund customers increase their compliance with recommended care in the second year, even more than in the first year;
  • They improve their health-risk status by six percent;
  • Medical cost trend goes down 12 percent versus traditional plans;
  • The improvement persists over time, up to $7.900 savings by fifth year;
  • The improvement occurs in low-risk, medium-risk, and high-risk patients; and
  • Because employers contribute to HSAs and HRAs, employees spend less money out of pocket than peers in traditional plans!

Don’t Ask, Don’t Tell

This is from Beverly Gossage, president of HSA Benefits Consulting and a candidate for Insurance Commissioner in Kansas:

health-insuranceThe data on which of the enrolled was previously uninsured is readily available. I am certified to write policies on and off the exchange and can tell you the application itself asked these questions:

1) Have you been insured in the past 12 months?

2) When did your insurance terminate?

An applicant cannot progress through the application without answering. Of course, we won’t know if they lied on the application, but it would give us a reasonable percentage.

HSA Update: Assets in Health Savings Accounts Exceeded $20 Billion in January

Key findings from the Devenir Year-End 2013 HSA Survey:

  • Steady account and asset growth. HSA accounts rose to 10.7 million accounts, holding assets totaling $19.3 billion, a year over year increase of 25% for HSA assets and 30% for accounts for the period of December 31st, 2012 to December 31st, 2013.
  • More providers offering HSAs. In 2013 over 2,200 banks and credit unions offered health savings accounts.
  • HSA contributions continue to rise. Total contributions to HSA accounts from December 2012 to December 2013 were estimated to be $16.4 billion, with accountholders retaining about 24% of those contributions after distributions for medical expenses.
  • HSA investment dollars grow with help from strong market. HSA investment assets reached an estimated $2.3 billion in December, up 30% from the end of 2012. The average investment account holder has an $11,350 average total balance (deposit and investment account).

Hits and Misses

HSA 10th Anniversary Event Photos


You may scroll through the photos of the banquet organized by the NCPA to celebrate the 10th anniversary of the signing of Health Savings Accounts into law, or you may view them as a slideshow by clicking the Slideshow button in the upper right-hand corner of the screen. If you find a photo you want to download, simply mouse over the photo, and a menu will pop up on the right-hand side.

Click the Save Photo icon and download to your computer. Downloads of photos are free.

HSA Update

HSA piggy bank 300There are now about nine million HSA’s with total assets of more than $18 billion; the average account balance is about $2,000, but accounts with funds in investment options, rather than just F.D.I.C.-insured accounts, average about $10,000, according to Devenir…

Devenir recently has started compiling a list of HSA providers on a new website, www.hsasearch.com. The site lists 31 providers, along with information on fees, interest rates, minimum balance requirements and availability of investment options; it’s expected to cover about 50 accounts by the end of the year, said Eric Remjeske, Devenir’s president. (NYT)

Health Savings Accounts: Ten Years On

On a wintery Monday night in Washington about 70 people gathered at a banquet to celebrate the tenth anniversary of the signing of Health Savings Accounts into law.

HCCS-13NovDec-HSA-featureFittingly, the dinner, organized by the National Center for Policy Analysis (NCPA), was held in the O’Byrne Gallery of the DAR’s Constitution Hall where President Bush signed the law on December 8, 2003.

Represented were many of the people who conceived of the idea in the 1980s, the policy staff and legislators who enacted the first Medical Savings Accounts (MSA) law in 1996, the entrepreneurs and regulators who took the concept and created Health Reimbursement Accounts in 2002, and the companies who have turned the law into the products and services that benefit tens of millions of people today.

NCPA President John Goodman, who is often referred to as “the father of HSAs,” and myself opened the commemoration with a tribute to the late J. Patrick Rooney, Chairman of Golden Rule Insurance, who did more than anyone else to popularize the idea and shepherd it through the legislative hurdles.

A Brief History of Health Savings Accounts

Devon Herrick, a senior fellow at the National Center for Policy Analysis (NCPA), writes:

  • Idoctor_with_piggy_bankn January 1984, the NCPA published a plan to use individually-owned “medical IRAs” to solve the long-term problem of Medicare.
  • Two months later, NCPA President John Goodman and Richard Rahn, then chief economist for the U.S. Chamber of Commerce, outlined this plan in a Wall Street Journal article.
  • That same year Singapore introduced a mandatory “Medisave” program.

Goodman and Senior Fellow Gerald Musgrave wrote a seminal study documenting opportunities in the United States to select high-deductible health insurance and place the premium savings in a personal health account to pay for small medical expenses.

In 1990, the NCPA organized a taskforce of researchers from 40 think tanks, universities and research organizations, including the American Enterprise Institute, the Cato Institute and the Hoover Institution. The report advocated self-insurance for small medical bills through Medical Savings Accounts (MSAs).

Capitol Hill responded quickly. In 1992, 12 different bills designed to create Medical Savings Accounts received the bipartisan support of 150 congressional cosponsors, including both conservatives and liberals. (More)