IN THIS ISSUE:
? Time to Recharge Them Batteries
? Vermont Takes on a Whole New Look
? Washington State ? ?Nearly All Carriers Have HSAs?
? Washington State ? ?Deceptive and Dangerous Initiative?
? New York State ? Expect 36% HSA Penetration in Two Years
? Harvard Pilgrim Struggles to get it Right
? Kansas City ? ?I?m In Control!?
? Indiana ? 45% Choose HSA Option
? BCBS Illinois and The Principal Offer New HSA Products
I’m taking the next couple of weeks off to recharge the batteries and renovate a property we bought in Hagerstown, MD. With any luck I’ll be back in mid-July with all my fingers intact and ready to slay some dragons. Meanwhile, to stay in touch with what is going on in the world, check out Galen’s other weekly, Health Policy Matters, and look into joining our new grassroots initiative, the Consumer Choice Community.
Vermont Takes on a Whole New Look
I was honored to be a speaker at a health care conference sponsored by the Ethan Allen Institute in Montpelier, Vermont, last week. If the first thing that comes to mind when you think of Vermont is the ranting of Howard Dean, you need to think again. Preceding me on the program was Governor Jim Douglas, an impressive and energetic new governor, who has made health reform a priority issue for his administration. He said this is no time for “quick fixes and more government gimmicks – we need real reform.” When he speaks of “real reform,” he is talking about putting consumers back in control and reducing governmental intrusions. This event was cosponsored by the state medical society, hospital association, and a number of business groups including the state Chamber of Commerce. It also released a new report by the Ethan Allen Institute, “Health Care in Vermont: A New Prescription,” that lays out 17 steps the state could take to reform health care.
SOURCE: For a copy of the report, go to http://www.ethanallen.org/pdf/HealthCare2004final.pdf.
Washington State – “Nearly All Carriers Have HSAs”
Peter Neurath reports in the “Puget Sound Business Journal” that, “Nearly all carriers in this market have come out with health plans accompanied by HSAs or something similar.” This includes Premera Blue Cross, Regence Blue Shield, KPS Health Plans, Cigna HealthCare, Aetna, and PacifiCare of Washington. He even quotes Group Health Cooperative market development director Theresa Boyle as saying that the HMO “intends to enter the market.” The article says, “The idea is not only to give employees the funds and the freedom to make their own choices. It’s hoped that in so doing, employees will spend the money prudently, because it’s their own, not someone else’s.”
Washington State – “Deceptive and Dangerous Initiative”
Public discourse and rhetoric are reaching new lows, not just in electoral politics, but in policy discussions. The authors of an opinion piece in the same issue of the “Puget Sound Business Journal” disagree with an initiative on the November ballot that would allow employers to purchase mandate-free coverage. But in expressing their disagreement, Joanna Boatman, president of Washington State Nurses Association, and Diane Sosne, president of Service Employees International Union District 1199NW, go way over the top: “Having failed in the Legislature last session, this small cabal of insurance and business interests has crafted a deceptive and dangerous initiative, I-895, which embodies their bankrupt health-policy ideas. No matter how their initiative fares, they will continue their assault next January in the next legislative session to gut our health-care system of quality and choice, all in the name of profits.” Yikes! Tell us how you really feel.
New York State – Expect 36% HSA Penetration in Two Years
An article by James Mulder in the Syracuse “Post-Standard” reports on a survey of employers in upstate New York sponsored by Excellus BlueCross BlueShield. The survey was conducted by Jon Gabel of the Health Research and Education Trust and asked employers about their familiarity with and attitudes toward consumer driven health plans. Mr. Mulder reports that, while enrollment is low right now, it “could grow to as much as 36 percent over the next two years.” It also finds that 67% of employers “think these plans would make employees wiser health care consumers,” and 42% thought they “would improve quality of care.”
SOURCE: For the news article, go to:
For the study itself, go to:
Harvard Pilgrim Struggles to get it Right
The “Boston Globe” included an interesting article by Liz Kowalczyk about the efforts of Harvard Pilgrim Health Plan in coming up with a workable consumer driven plan design. The first effort in 2002 fell flat, with only two of Harvard Pilgrim’s own employees signing up for it. One of the two was CEO Charles Baker, who says, “I knew why right away.” While the plan was “far cheaper” than the regular health plans, all of the savings accrued to the employer, not to the employee. Now the company has switched from the old fixed percentage contribution to a fixed dollar contribution, and employees can pocket the premium savings. Plus it added “an extensive internal campaign called ‘You decide’ that included personal coaches for employees,” according to the article. Now 197 of the plan’s 1,300 employees have signed up for the new approach, known as “Best Buy.” Total enrollment for the product has grown to 45,000, about 5 percent of the company’s business, and is expected to grow substantially.
SOURCE: The article ran on June 27, but the Globe has one of the worst archives policies in the country. Any article more than two days old costs $2.95 to read.
Kansas City – “I’m In Control!”
Julius Karash headlines an article in “The Kansas City Star,” entitled “‘I’m in Control’: Health Savings Accounts are the Newest Thing in Consumer-Driven Plans.” The quote is from Michael Searcy who says he likes his HSA because, “If I want to dip into it, I can dip into it. If I want to write a check for part of it, I can. I’m in control.” The article cites a Mercer Human Resource survey of 991 employers, and found that 73% are very likely or somewhat likely to offer workers an HSA by 2006. The article quotes locally-based MSAver Resources which has set up about 10,000 accounts since January, and cites Assurant’s 56,000 applications for HSA products. It also notes that the local Blue Cross Blue Shield plan will have a product available for the individual and small group markets by the first quarter of 2005. But it also quotes Consumers Union’s Trudy Lieberman as saying. “You sort of have to be a gambler to take one of these.”
Indiana – 45% Choose HSA Option
Bill Theobald writes about a recent survey of Indiana employers in “The Indianapolis Star.” He notes that employee cost-sharing is rising, with median deductibles going from $250 to $500, copays jumping 25%, and median premiums rising to $859/mo for families and $304/mo for individuals. The sponsor of the survey, Johnson & Associates, a local human resources consulting firm says, “Employees are going to have to become better consumers.” One local company installed a consumer-driven health plan for its non-union employees and found 45% chose it over a traditional PPO that was also offered.
BCBS Illinois and The Principal Offer New HSA Products
Finally, Blue Cross Blue Shield of Illinois and The Principal Financial Group have both announced new HSA offerings. BCBS president Gail Boudreaux says, “We consider HSA products to be an integral part of both our consumerism philosophy and our product portfolio.” They are teaming with Mellon Financial to offer a complete package. The Principal is using its position as an industry leader in 401(k) products to put together a comprehensive HSA program. Senior Vice President Gary Cain says, “This is the real deal. We’ve created a single source for administration and benefits management, with a variety of investment options for The Principal HSA.”
SOURCE: For information about the BCBS Illinois product, contact Tony Rau at 312-653-6701. For the Principal product, contact Rhonda Clark-Leyda at 515-247-6634 or clark-leyda.Rhonda@principal.com
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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.