The media apparently can’t help itself in demeaning ideas and plans that give consumers more choice and control over their health spending. Take for example an article from Reuters entitled, “Wells Fargo gives staff tough healthcare choices.”
The lede says: “Wells Fargo & Co, one of the largest U.S. employers, plans to cut costs by moving its workers into insurance plans that encourage them to spend less on healthcare. The bank told Reuters that it is rolling out a new insurance approach next year that will give employees accounts to help cover medical expenses. They can either put their own pretax dollars in the accounts, or pay higher insurance premiums and have the company fund the account. If employees opt to put their own money into the accounts, they are on the hook for more of their medical expenses if they get sick.”
Sounds pretty draconian, right? But at the VERY end of the lengthy article we finally get the actual story:
Under the bank’s program, employees can have a “health reimbursement account,” which Wells funds, or a “health savings account,” which workers fill with their own pretax dollars. Both accounts will help cover out-of-pocket expenses until a deductible is met. After that, Wells will cover between 80 and 90 percent of medical expenses, with the employee picking up the rest. After an employee reaches an out-of-pocket maximum, Wells covers 100 percent of additional expenses. An insurance company administers the claims. Eligible preventive care, such as routine checkups, annual screenings and immunizations, is covered 100 percent. Employees can earn money to put into their accounts through participating in health and wellness programs.
A Wells employee in North Carolina covered on an individual basis would pay a premium of about $23 per two-week pay periodfor the health savings account option, compared with $48 for the health reimbursement account plan.
An employee in an individual plan can put up to $3,100 into a health savings account under IRS rules next year. The deductible in that plan is $3,000. In the health reimbursement option, the company can put between $200 and $1,000 in an employee’s account. The deductible is $2,000 for individual coverage. Employees must pay $25 for a primary office visit, which is less than the full cost. There are also co-pays for generic prescription drugs.
Employees who use health savings accounts can roll their money into the next year if they do not use it all and take it with them if they leave the company.And there’s a backstop: “About one-third of the bank’s employees already use some sortof account-based plan. Wells will still offer traditional plans in California and otherstates where switching would force too many employees to change their doctors.”
Does this sound to you like an evil corporation with no regard for its employees?
Hardly. In fact, Wells Fargo is leading the way with health reform that engages employees as partners in managing their health costs and coverage choices, with genuine protection against major medical costs — which is the true role for insurance. Kudos to Wells Fargo!
ObamaCare hearing: The House Education and Workforce?s Health Subcommittee held a hearing yesterday on the impact of ObamaCare’s regulations on jobs and job-based health insurance.
Committee chairman Rep. Phil Roe, M.D. (R-TN) reminded us that President Obama promised “adamantly that reform would not disrupt the health care millions of Americans rely upon and wish to keep. The linchpin of this promise was an exemption or ‘grandfather’ provision in the law… Unfortunately, in just three months, the administration defined the terms of the grandfather provision so narrowly that it became meaningless.”
I testified and said that employers work very hard to find the balance in keeping the cost of health insurance as low as possible while offering the benefits that employees want and need. Part of the way they are able to do this is by seeking bids from competing insurers and amending and adjusting benefit structures.
But HHS rules limit their ability to do that. It?s a Catch 22 because losing their grandfathered status also means they are limited in what they can do to help keep costs down.
Robyn Piper, who counsels large employers on employee benefits, told the committee: “All of our large employers have now made the difficult decision to lose grandfathered status in exchange for protecting the plan itself and making appropriate and necessary plan changes.”
She said they already are experiencing steep premium increases as a result of ObamaCare mandates, saying, “we have seen premium increases as high as 22% for preventive care” — the requirement that employers remove any cost-sharing requirements for employees. “I can strongly testify that PPACA and loss of grandfathering status can have a profound effect on certain employer groups.”
Ranking Democrat Robert Andrews took me on during the hearing, insisting that my testimony was wrong that ObamaCare has led to a hiring freeze. The law unquestionably will add new costs by forcing employers to either provide workers with expensive, government-approved insurance or pay a fine. Many employers anticipating these costs are simply unwilling to add new workers.
I cited a study by James Sherk of The Heritage Foundation saying that net job creation in the private sector dropped nearly 10-fold to 6,500 a month in the 15 months since the law’s passage compared to the previous 15 months.
I believe I prevailed in the somewhat heated exchange in explaining that 6,500 new jobs a month is woefully inadequate when 14 million Americans are unemployed.
Now we have a new study by Sherk explaining how ObamaCare will price less skilled workers out of full-time jobs:
President Obama?s health care law . . . will price many unskilled workers out of full-time employment. After paying the new health premiums, the minimum wage, payroll taxes, and unemployment insurance taxes, hiring a full-time worker will cost employers at least $10.03 per hour. Full-time workers with family health plans will cost $13.75 per hour. Employers who hire workers with productivity below these rates will lose money. Businesses employing less skilled workers will probably respond by dumping their employees onto the federally subsidized health care exchanges and replacing full-time positions with part-time jobs.”
Chairman Roe recounted an exchange with an IHOP employer who said his average profit per employee was $3,000 a year. “How on earth am I going to be able to afford to provide them with health insurance that may cost several times that amount? Even paying the fine would completely swallow up my profits,” he said.
And that’s one of the many, many reasons why this legislation MUST be repealed!
CLIP OF THE WEEK
Saving Jobs from PPACA?s Harmful Regulations
Grace-Marie Turner testified yesterday before the House Education and Workforce Committee’s Subcommittee on Health, Employment, Labor, and Pensions, hearing on “Regulations, Costs, and Uncertainty in Employer Provided Health Care.”
GALEN IN THE NEWS
ObamaCare Extends Its Tentacles
Grace-Marie Turner, National Review Online: Critical Condition, 10/07/11
Saving Jobs from PPACA?s Harmful Regulations
Grace-Marie Turner, Testimony before the House Education and Workforce Committee’s Subcommittee on Health, Employment, Labor, and Pensions, 10/13/11
Perry And Other GOP Candidates Knock Romney On Mass. Health Reform, Blast Health Law
Republican Presidential Debate Excerpts on Health Care, Kaiser Health News, 10/12/11
Obamacare Will Price Less Skilled Workers Out of Full-Time Jobs
James Sherk, The Heritage Foundation, 10/11/11
Now the Health Care Lobbying Really Begins
Merrill Matthews, Forbes.com, 10/13/11
Don’t blame doctors for high health care costs
Sally C. Pipes, USA Today, 10/11/11
Unessential Politics = No Net Benefits
Thomas P. Miller, National Journal, 10/12/11
Budgetary Savings from Delaying the PPACA
Douglas Holtz-Eakin and James C. Capretta, American Action Forum, 10/11/11
AEI Special Poll Report: Health Care
Karlyn Bowman and Andrew Rugg, American Enterprise Institute, 10/12/11
Obamacare’s unkept promises unsettling for families
Benjamin Domenech, The Tampa Tribune, 10/13/11
MEDICARE AND MEDICAID
A Time for Solutions: Finding Consensus in the Medicare Reform Debate
Joseph Antos, Statement to the Senate Special Committee on Aging, 10/12/11
What Changes will Health Reform Bring to Medicare Advantage Plan Benefits and Enrollment?
Robert A. Book and Michael Ramlet, Medical Industry Leadership Institute, October 2011
Medicaid waiver entangled in safety net in Massachusetts
Jason Millman, Politico, 10/11/11
Different Takes: Advice For The Super Committee
Henry J. Aaron, Nina Owcharenko, and David Kendall, Kaiser Health News, 10/12/11
Part D Price Controls Kill Jobs
Sally C. Pipes, Investor?s Business Daily, 10/13/11
Design Can Improve Healthcare; Can It Also Lead to New Cures?
David Shaywitz, The Atlantic, 10/11/11
Patentability of Healthcare Diagnostics: Prometheus in the Supreme Court
American University Washington College of Law Event
Monday, October 17, 2011
11:45am – 1:30pm
Is Ageing Good For Us?
Stockholm Network Lunchtime Roundtable
Tuesday, October 18, 2011
12:30pm — 2:30pm