IN THIS ISSUE:
? Feds to get HSAs in 2005
? Hillary Clinton Wants to Talk About Health Care
? Rate Hikes Eating Up Profits in Charlotte
? Will a Constitutional Amendment Lower Costs in Boston?
? Exec Says AHPs not the Answer in Massachusetts
? Consumer Driven Solutions Taking Off in Raleigh
? More CD Plans Offered in Louisville
? HSAs Part of the Answer in Phoenix
Feds to get HSAs in 2005
The Office of Personnel Management (OPM), headed by Kay James, issued its annual “Call Letter” on Monday inviting carriers that participate in the FEHBP to propose offering HSAs to federal workers. OPM met with and listened to the concerns of the federal unions, but decided in the end that federal workers should not be deprived of new opportunities. The Call Letter is a request for proposals, though less detailed than a typical RFP and more focused on broad approaches OPM would like to initiate. The letter estimates there are 3.1 million federal workers and family members who would be eligible for HSA enrollment. Because HSAs are not available to people eligible for Medicare, the letter requires carriers to offer a similarly structured HRA to federal retirees on Medicare. It also wants to see details on benefit structure, premiums, HSA deposits, account management, and patient support services.
Carriers have until June 1, 2004 to respond for the 2005 enrollment period.
Hillary Clinton Wants to Talk About Health Care
I mostly wanted to focus on Main Street this week, but I can’t resist a quick comment about Senator Clinton’s long essay in the “New York Times Magazine” on Sunday. It is headlined, “Now Can We Talk About Health Care?” as if ten years ago she wanted to talk about it but nobody else did. This historical revisionism is remarkable. Ten years ago she assembled a group of left-leaning scholars who met in secret and developed a 1,342-page bill that was supposed to be voted up or down. There was no conversation, it was take it or leave it. In order to get “a seat at the table,” one had to agree to support the Clinton plan even before seeing it.
Let’s hope she learned from the experience, and will be open to listening as well as talking this time. Her new essay isn’t promising. She claims to want a discussion, but dismisses consumer driven health as nothing more than shifting “the costs, the risks and the burdens of disease onto the individuals who have the misfortune of being sick.” She says tax credits would make people buy coverage “without any rules of fair play.” She endorses the use of information technologies, but that is the new motherhood and apple pie position that virtually everybody agrees with – sort of like “eliminating waste, fraud and abuse” was ten years ago. Senator Clinton wants a dialogue, but she doesn’t want to “dither and disagree.” She is certainly correct that “the present system is unsustainable,” but trying to avoid hearing from those who disagree with a particular policy proposal is not the way to find solutions.
Rate Hikes Eating Up Profits in Charlotte
Sen. Clinton may not want to hear about it, but out in America there is a real discussion going on. The local business journals are a good place to measure the pulse of Main Street. The Charlotte “Business Journal,” for instance, will introduce you to Ernest Dwight, owner of the SouthWood Corp., a 40-employee sign maker. He pays 100% of the premium for his workers, but “it’s a real battle. It’s frustrating,” he says. Rate increases of 15% to 20% “are eating profits in a weak economy that’s prompted small businesses to cut expenses,” says the article. It says most employers are asking workers to contribute more to the cost of premiums. Mr. Dwight was notified of a 42% premium increase from Blue Cross, so he raised deductibles and copayments to bring it down to 18%. The article mentions that consumer driven plans provide “an incentive to avoid unnecessary health-care expenses [and] they seem to be getting some traction.”
Will a Constitutional Amendment Lower Costs in Boston?
One business owner Sen. Clinton would like to hear from is Anne Schuhler, who runs a 15-person print shop in the Boston area. She used to pay 75% of premiums for workers’ health coverage, but has knocked that down to 70% after rate increases of 60% over five years. She spent 80 hours of her valuable time working with a broker to find better coverage, and now she is expected to educate her workers “on the proper use of health care resources.” She says, “it’s time for some fundamental reforms to ensure that everyone can get the care they need at a reasonable price.” She supports a proposed amendment to the Massachusetts constitution “so residents … can get affordable, comprehensive health insurance.”
Exec Says AHPs not the Answer in Massachusetts
Sen. Clinton would also like to hear from the head of the North Central Massachusetts Chamber of Commerce, who doesn’t think Association Health Plans will help much. In fact he thinks AHPs will result in “increased numbers of uninsured and plummeting quality in our benefits.” David McKeehan cites a study by Mercer Risk, Finance and Insurance that claims rates would go up 6% overall, and 23% for employers not in an AHP, leading to one million people losing coverage. He especially doesn’t think it is fair that AHP members would escape Massachusetts’ “long list of mandated benefits.” He would prefer to see reforms that “bring long-term stability, keep costs in check, be fair to all small businesses … and maintain our high health care standards.”
Consumer Driven Solutions Taking Off in Raleigh
However, Sen. Clinton would turn a deaf ear to the folks in Raleigh, North Carolina who are enthusiastic about consumer driven health. An article by Katherine Kopp says, “Consumer-driven tools to manage health care costs? have emerged in recent years to give employers and employees innovative ways to pay for care. Now, newer mechanisms [HRAs and HSAs] ? are poised to give even greater ownership of health and medical expenses to the individual.” A local consultant says that ” … the real trend is that these plans allow individuals to be buyers of health care that meets their particular needs.” Lumenos’ Doug Kronenberg says, “Employees like having more control over a portion of their health care funds and not being told how they have to spend them. Satisfaction rates with these plans are in the mid-90 percent range.” The article cites a local company with 2,500 employees that offered a consumer driven plan as an option, and got 30% enrollment in the first year. It also mentions recent experiences by Blue Cross Blue Shield of North Carolina, Aetna, and Humana, all showing extremely positive responses.
More CD Plans Offered in Louisville
She would also want to avoid Louisville, Kentucky, where more companies are offering consumer driven plans, including most recently Bluegrass Family Health, plus Humana, Anthem Blues and Lexington-based CHA Health. The article by Jennifer Gordon also cites a 2003 Deloitte & Touche study of employers that found, “Only 14% of respondents said they were not considering this type of plan.” Eleven percent said they already offer such a plan, 8% “definitely will” in 2004 or 2005, 35% “are currently reviewing the plan design and may offer one in the near future,” and 32% “will consider this type of plan if long-term savings and employee acceptability can be demonstrated.”
HSAs Part of the Answer in Phoenix
Sen. Clinton might want to stay away from Arizona, too, where Roger Hughes is executive director of St. Luke’s Health Initiatives. Mr. Hughes writes an op-ed piece that relies on information developed by the Arizona Coverage and Access Now campaign. He says ” … [O]ur research indicates there is little support for [an employer mandate] in Arizona.” But he lists “a number of things business leaders can do now to help the health sector move toward genuine system reform.” The use of Health Savings Accounts is one of them, keeping an open mind is another.
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