IN THIS ISSUE:
? UnitedHealth Reports “Rapid Acceleration” in HSA Activity
? Baltimore Sun – Workers Need More Control Over Health Insurance
? HSAs Give Consumers More Control over Medical Care
? The Pasternacks in New York Opt Not to Choose HSA
? The Wilders in Wisconsin Opt in Favor of HSAs
? The Phillips in Texas Also Choose HSAs
? Iowa Businesses Support HSAs
? Newt Gingrich Supports HSAs
? Can Massachusetts Legislators Learn From Mistakes?
? New Hampshire Legislators Have
UnitedHealth Reports “Rapid Acceleration” in HSA Activity
UnitedHealth Group reports a “rapid acceleration in HSA sales activity across its businesses,” according to a company press release. The release says that “many large employers have re-opened and re-drafted their 2005 health benefit plans so they can offer an HSA to their employees next year. The company is forecasting 150,000 HSA enrollees in January, 2005, on top of some 1.3 million individuals already using the “first-generation consumer driven products” offered by the company. The company is working with Exante Bank to provide “a fully integrated HSA product,” according to Andy Slavitt, CEO of Consumer Solutions.
SOURCE: Contact Mark Lindsay at 952-992-4297
Baltimore Sun – Workers Need More Control Over Health Insurance
The “Baltimore Sun” ran an editorial saying, “This nation’s employer-based health insurance system has been increasingly challenged over the past decade to maintain benefits for current workers.” They suggest, “The answer is twofold: Slow the growth of health care costs, and ease the ongoing transition from employer-paid benefits to a mix of individual policies and government subsidies.” They argue that Senator Kerry has a more “ambitious plan for redesigning the health care system” than President Bush, but they conclude, “Both candidates tacitly acknowledge, though, that the days of employers providing lifetime medical benefits are in their twilight. So it makes sense to design a system that gives workers more control over their own health insurance.”
HSAs Give Consumers More Control over Medical Care
The “Baltimore Business Journal” makes a similar point in discussing HSAs. It reports that HSAs in Maryland may “make a splash” with consumers, but it will take “a few more years” for it to take hold. It discusses the development efforts of Aetna and CareFirst BlueCross BlueShield (there aren’t very many insurance companies active in Maryland anymore), but adds, “HSAs are really part of a national movement in health care to give consumers more control over their medical care.” Cindy Ottley, spokesperson for CareFirst is quoted as saying, “It’s a movement that’s really going to change the way health care is delivered. The goal is to create an engaged consumer instead of a passive patient.”
The Pasternacks in New York Opt Not to Choose HSA
“Newsday” features a family, the Pasternacks, that “worries about the rising cost of health insurance and is always looking for a better alternative.” They considered an HSA, but decided against it because, “We’re much more comfortable with having the full, basically guaranteed coverage, so we don’t have to worry.” The article goes on to quote Dan Perrin of the HSA Coalition, but devotes more attention to critics of HSAs like Public Citizen’s Sidney Wolf and Kathleen Stoll of Families USA. The main benefit cited is the HSA’s use as a tax shelter. It quotes Steve Putterman of Mercer Human Resources as saying, “If somebody has maxed out their 401(k) contributions, this is a great tax vehicle.”
The Wilders in Wisconsin Opt in Favor of HSAs
The “Wisconsin State Journal” also features a family, the Wilders, who have looked at HSAs. Dr. Wilder is a chiropractor and a small business owner who has been paying $1,000/month for premiums for his family. He says, “Even though it’s brand new, the possibility of having more control over my health care costs is very attractive to me.” He will cut his premium payment by 70% to $300/month for a $5,000 deductible policy. Dr. Wilder says, “Because we have a healthy family, it makes more sense to have a high deductible and bear some of the risk ourselves.” Not stated is the fact that he will be saving $8,400 a year – more than enough to cover a $5,000 deductible and have money left over. Sounds like a good deal for non-healthy families as well.
The Phillips in Texas Also Choose HSAs
“Newsweek” also follows the formula of starting with an illustrative family, this time the Phillips of Austin, Texas. With a wife and three kids, Rich Phillips was searching for coverage after leaving his job to start his own company. He was getting quotes of $1,000/ month until he discovered an HSA policy for $350/month. The article doesn’t say how much his deductible is, but it does say he is putting $300/month into his HSA. Let’s see — $1,000/month for coverage versus $350 in premium, $300 in HSA savings, and another $350 left over to spend on food, clothing and shelter each month. I wonder which a low-income family would prefer? This article also quotes Dan Perrin and mentions his www.hsainsider.com as a resource for finding an HSA plan.
Iowa Businesses Support HSAs
Recent surveys in Iowa find that “high health care costs have caused a loss in profits, delayed expansions, and job losses.” Fred Buie, the president of Keystone Electrical Manufacturing says, “Up until this point, we have been able to get the sort of productivity increases we needed from employees to offset the cost increases. But we are rapidly reaching the end of that rope.” In response, Mr. Buie has converted his coverage to health savings accounts. The article says, “84% of businesses surveyed support a tax exemption for money that workers spend on health care, while 56% favor employee-owned medical savings accounts into which businesses would pay a fixed, tax-deductible amount each month, instead of employer-sponsored health insurance.” Also, “48% say that in place of Medicaid, the government should help low-income workers buy catastrophic coverage policies and pay medical expenses.”
SOURCE: This was picked up from an Associated Press story dated August 17, 2004. I have not been able to find out where it was published originally and though the Iowa Department of Public Health sponsored the survey, it does not appear to be available on their web site.
Newt Gingrich Supports HSAs
The “New York Sun” includes an article by Jay Whitehead that features Newt Gingrich’s commitment to consumer driven health care. The article describes the problems with rising health care costs and says, “An ideal solution, Mr. Gingrich says, is a Consumer Driven Health Plan [that] matches an HSA? with a high-deductible insurance plan?. This combination saves employers and employees 15% to 30% over the cost of traditional PPO coverage. Then add online comparisons of doctor and treatment prices and quality ratings, and health care becomes a lower-cost, higher quality consumer market.” He gives diabetes care as an example of how “an information-rich, incentive-based plan” can prompt patients to take care of themselves and “postpone the onset of blindness and heart disease.” He compares the third-party payer model to a rental car – “Nobody has ever washed a rental car.”
SOURCE: You have to be a subscriber to access articles. The piece ran on August 18, 2004.
Can Massachusetts Legislators Learn From Mistakes?
Writing in the “Boston Herald,” Conrad Meier wonders if Massachusetts lawmakers will ever learn from their mistakes. He writes, “To undo the damage wrought by two decades worth of manipulation and over-regulation” the legislature recently “voted for still more manipulation and over-regulation.” He remembers how previous laws, including a universal entitlement, community rating and guaranteed issue, have driven insurance companies out of the market, reduced competition, raised costs, and increased the numbers of uninsured in that state. He says, “Other states have been more successful in keeping health premiums affordable, the uninsured rate low, and the quality of services high,” through pro-market activities.
SOURCE: The article ran on August 21, 2004, but it’s not available on their web site. You may e-mail the author at: email@example.com.
New Hampshire Legislators Have
Neighboring New Hampshire is one state that has made a U-turn from excessive regulation. State Senator Robert Clegg writes in the “Manchester Union Leader” that former governor Jeanne Shaheen “spearheaded the effort to enact so-called ‘community rating’ laws.” He adds, “Looking back, we now can see that in every state where community rating was implemented, it resulted in massive insurance company defections, spiraling rates and fewer choices for small businesses.” He says in 2004 the legislature reformed the small group laws to allow for more market dynamics, and while “it is impossible to reverse eight years of destruction in seven months … many positive trends have emerged,” including going from 3 insurers offering coverage to 7, new products like HSAs being offered, and lowering the cost of coverage “for a large majority of small businesses.”
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