General Accountability Office: "Early enrollee experiences with health savings accounts and eligible health plans." 1
The GAO found that:
o HSA-eligible plans and traditional plans covered similar health care services, including preventive, diagnostic, maternity, surgical, and emergency room services and also used similar provider networks.
o HSA-eligible plans had lower premiums, higher deductibles, and higher out-of-pocket spending limits than traditional plans in 2005. Taking things in order:
o Premiums for HSA insurance were, on average, 35% less than traditional coverage for single plans and 29% less for family coverage.
o HSA-eligible insurance is more likely to have higher deductibles than traditional insurance because one of its features is giving people an opportunity purchase these policies, which generally have lower premiums, and put the savings into a tax-free HSA.
o Higher and lower out-of-pocket spending limits are simply a way of shifting costs: Lower spending limits are likely to bring higher premiums, and vice versa.
o 51% of the people enrolling in HSA-eligible insurance plans had incomes of $75,000 or more, appearing to buttress the argument that HSAs are only for the wealthy.
o But that also means that 49% of the purchasers had incomes of less than $75,000. Other studies by Blue Cross and Blue Shield,2 Assurant Health, eHealthInsurance, and America?s Health Insurance plans, covering millions of lives, have found a virtual bell curve in income for those buying HSA insurance.
o Further, studies show that people age 45-54 are the most likely age group to purchase HSAs: They are old enough to know they need health care, are wiser about wanting control over their choices, and have enough time before retirement to accrue some real savings in their accounts. And because they are older and likely have been in the workforce longer, they are more likely to have higher incomes.
o The GAO estimated that HSA-eligible plan enrollees would incur higher annual costs than PPO plan enrollees for extensive use of healthcare, but would incur lower annual costs for low to moderate utilization. GAO also found that focus group participants generally reported positive experiences with HSAs, but wouldn't recommend them to colleagues who use maintenance medication, have a chronic condition, have children, or may not have the funds to meet the high deductible.
o Consumers with HSA-qualified health insurance have a cap on their annual out-of-pocket expenditures of $5,000 for individuals and $10,000 for families. While these are significant sums, patients with high medical expenses, such as organ transplant recipients, find that their annual costs are lower than with traditional insurance, which generally requires a co-insurance payment of 20% or more for every health expenditure, leading to much higher out-of-pocket costs.
o Roughly 55% of those reporting HSA contributions in 2004 didn't withdraw any funds from their HSA that year. Those who did withdraw funds used the money correctly: About 90% of these funds were withdrawn for qualified medical expenses.
o Clearly, some people are using HSAs to save for the future and the vast majority are withdrawing funds for appropriate medical care.
The Commonwealth Fund: "Squeezed: Why rising exposure to health care costs threatens the health and financial well-being of American families." 3
The Commonwealth Fund claims in a new study that people with individual health insurance policies pay more, get less, have higher deductibles, and are less happy with their coverage than those with job-based plans. This certainly would seem to undermine confidence in private health insurance, but the facts show serious problems with the study.
o The Commonwealth study was based upon telephone interviews with only 137 people with individual policies, out of 1,878 included in its survey. America's Health Insurance Plans4 countered that the Commonwealth findings are not consistent with AHIP's own survey of 1.9 million individual policies covering 3.2 million people.
o AHIP found that individual insurance policies were more affordable than Commonwealth reported and had richer benefits.
o AHIP's data shows that 9 in 10 people who completed the application process were offered coverage. Commonwealth said that 9 in 10 people who "explored" buying coverage in the individual market didn't succeed.
o A new Blue Cross/Blue Shield study5 finds that overall satisfaction rates for patients with consumer-directed plans were higher than those enrolled in traditional coverage, 47% vs. 27%.
o Further, consumers purchasing their own health insurance are more likely to select high-deductible health insurance to save money on premiums. Even then, however, consumers are subjected to heavy-handed regulation and mandates by the states that drive up premium costs by as much as 45%.6
2 "Market Experience with CDHPs: Transformation or Transition?" BlueCross BlueShield Association. http://bcbshealthissues.com/proactive/newsroom/release.vtml?id=210738
5 "Market Experience with CDHPs: Transformation or Transition?" BlueCross BlueShield Association. http://bcbshealthissues.com/proactive/newsroom/release.vtml?id=210738
6 "Trends in State Mandated Benefits, 2006," Council for Affordable Health Insurance. http://www.cahi.org/article.asp?id=802