IN THIS ISSUE:
? Bush, Kerry Effects on Small Business Compared
? Business Owners Need to Decide – Kerrigan
? Issues to Consider When Choosing HSAs
? Are Workers “Steering Clear” of HSAs?
? Are Consumers Avoiding HSAs?
? Are Consumers Becoming Wiser Shoppers?
? A Dead Moose on the Table in Kentucky
? Third-Party Payment the Real Cost Driver – Keating
Bush, Kerry Effects on Small Business Compared
We haven’t visited the local Business Journals in a while. They are a real asset. Not only do they give a good glimpse of what is happening on Main Street, but they are producing some of the best benefits writing and most interesting dialogue in the country. Let’s start with a comparison of the Bush/Kerry campaigns by Kent Hoover. This article has been published in more than a dozen of the local journals and is one of the most concise and factual comparisons I’ve seen of the two campaigns and how they will affect small business. For example, Mr. Hoover succinctly describes the two campaigns on health care as –
? Favors association health plans
? Would give tax credits to people who don’t have health insurance through work
? Would expand heath savings accounts
? Wants tax credits for small businesses that provide health insurance
? Favors small business access to congressional health plans
? Wants catastrophic coverage provided by feds.”
He then provides a narrative explanation of the proposals and gets reaction from business owners. Obviously the descriptions are not complete, but they provide a great nutshell picture of the essence of the two candidates’ proposals.
Business Owners Need to Decide – Kerrigan
Some of the Journals also published an analysis of the two proposals by Karen Kerrigan. She says, “small business owners will have to decide for themselves whether less government and increased market competition beats a more prominent role for government in delivering affordable, high-quality coverage.” She reports that “the Lewin Group estimated that Sen. Kerry’s plan would cost $1.25 trillion over ten years [and] cover 25.2 million people, reducing the uninsured by 50 percent. Bush’s plan would cost $227.5 billion over ten years and reduce the number of uninsured by 17 percent (8.2 million).”
Issues to Consider When Choosing HSAs
The cost of health care is one of the biggest concerns on Main Street and the Business Journals reflect that. Many articles are discussing whether HSAs and consumer driven plans are having a positive effect on health care costs. Thomas Brady, the CEO of UnitedHealthcare of Ohio, says in an article in “Business First” of Columbus, Ohio that they are having a positive effect. He provides a check list of questions employers should consider when thinking about choosing an HSA. He says, “consumer-driven health plans are among the most popular options this year,” and tells of internal research that compared 20,000 iPlan enrollees with 25,000 who stayed with traditional coverage. “UnitedHealthcare’s audit of plan users showed more than a 90 percent satisfaction rating, increased use of preventative-care services and reduced medical costs and claims,” he reports.
Are Workers “Steering Clear” of HSAs?
On the other hand, Jim Cole writes an article headlined, “Workers steer clear of consumer-driven plans,” in the “East Bay (Oakland) Business Times.” But this is a very curious article. It cites Great-West Healthcare as “having surprising success with its new (consumer driven) program” and quotes spokeswoman Victoria Mahoney as saying “We’ve been quite surprised by the results” with a third of employees opting for it. The article also reports that Hewitt Associates “expects companies? to focus on employee-controlled accounts, including HSAs and HRAs?.” And a local broker says, “This is the beginning of an aggressive campaign by some of our clients to begin behavior modification.” So, where is the evidence that workers are “steering clear” of consumer driven plans? The article offers only the two-year old limited survey by the Center for Studying Health System Change which we have reported on before. Amazing. Blow the dust off an old survey and some reporters will ignore the real evidence staring them in the face.
Are Consumers Avoiding HSAs?
Across the Bay in San Francisco, Sarah Duxbury writes a similar article, “Consumers not driving new health vehicles.” She says, “?CDHPs have been touted as the future of the health care system, and a way to harness out-of-control costs. Until recently, they’ve been slow to catch on.” But she goes on to say that Watson Wyatt “found that only 21 percent of large companies offered a consumer-driven health option in 2003, and first-year enrollment in them averages less than 10 percent.” She adds, “Watson Wyatt expected 32 percent of large companies to offer CDHPs in 2004.” She also cites Forrester Research as saying that 2.7 million people will be in CDHPs by 2005, paying $16 billion in premiums, which will rise to $86 billion by 2007 and $423 billion by 2010 — a 24% market share. Other people cited in the article predict “HSAs will give a big boost to the growth of CDHPs?.” So, it is hard to understand where the negative tone comes from.
Are Consumers Becoming Wiser Shoppers?
Writing in the “Business Journal” of Milwaukee, David Livingston has a very different view. His COBRA coverage expired so he bought coverage from Wisconsin’s high risk pool with a $2,500 deductible. He says now that he tells his providers he has a high deductible and wants to pay in cash, they often charge him half of what they usually would. He says, “Citizens need to wise up and learn to be better consumers. Wouldn’t it be nice if all doctors started offering steep cash discounts the way chiropractors do? The doctors would certainly do this if people started paying cash because suddenly price would be important to the consumer.”
A Dead Moose on the Table in Kentucky
In “Business First” of Louisville, Tom Underwood of the NFIB argues “there’s a dead moose on the table” that no one in Kentucky wants to deal with. That is the cost and availability of health insurance coverage. He lists seven actions the state should take – 1. Allow small business associations; 2. Adopt HSAs to get rid of the co-pay mentality; 3. Restore competition in the health insurance market; 4. Reduce paperwork; 5. Make claims data available to employers and consumers; 6. Review mandated benefits; 7. Pass drug rebates on to consumers. He concludes, “The time is past to act. The moose is starting to smell.”
Third-Party Payment the Real Cost Driver — Keating
Raymond Keating argues in the Silicon Valley “Business Journal” that “the real reasons for rising costs continue to elude many. Such ignorance, unfortunately, leads to misguided public perceptions and incorrect policy decisions.” He cites claims that rising drug costs are a significant driver of overall cost increases as an example. He points out that one of the real drivers is third-party payment – “when someone else picks up the tab? neither health-care providers nor consumers have incentives to be concerned about utilization and spending.” He says HSAs “are the correct response to the third-party payer issue.” Other problems cited are excessive regulations and mandates. One innovative response is Rep. Shadegg’s bill to allow consumers to purchase coverage across state lines. He concludes, “Big government health care is not the answer; it’s the problem. More consumer control and choice, and competition in the marketplace are needed.”
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