News In Healthcare

Read­ing the first line of this arti­cle in the New York Times, The Many Hid­den Costs of High-Deductible Health Insur­ance, made me think back to our recent post regard­ing choos­ing the right health insur­ance and the fact that young Amer­i­cans are will­ing to do the research but not sure where to turn for assis­tance. This arti­cle pro­vides a detailed under­stand­ing of what addi­tional costs may be hid­den in the high-deductible health insur­ance plans.

We don’t mean to be sar­cas­tic.  We are very happy with the title of a report in yesterday’s L.A. Times — “High Deductibles a Pain for Some Insured.”  The arti­cle very clearly explains why offer­ing higher deductible health plans at a lower pre­mium is not the answer to the unin­sured cri­sis in America.  

There have been many arti­cles on the suc­cess or fail­ure of Health Sav­ings Account.  See the Wichita Eagle for a recent arti­cle.  Remem­ber, HSAs were pro­moted by Pres­i­dent Bush in his State of the Union Address as a fix for the health­care cri­sis in Amer­ica.  But what all of those arti­cles are not tying together is that in order to have an HSA, the indi­vid­ual must have a high-deductible health plan.  In order for an HSA to be a suc­cess, you must have the funds to put into the HSA so that way you can pay your high-deductible.  Every­one can say that HSAs are not catch­ing on because of a lack of edu­ca­tion as to how they work.  How­ever, from the point of view of some­one who has a funded HSA, the rea­son they are not catch­ing on is because they must be funded in order to work and if peo­ple didn’t have funds to buy a reg­u­lar health plan, they prob­a­bly don’t have the funds to put into a health sav­ings account.  When the choice comes down to set­ting aside money monthly for future health expenses or pay­ing the elec­tric bill and buy­ing gro­ceries, peo­ple will usu­ally choose the latter.

So says an exec­u­tive at a health­care sav­ings account com­pany.  In a recent arti­cle on BenefitNews.com, the low adop­tion rate of Con­sumer Dri­ven Health Plans was blamed on employ­ers’ lack of focus on edu­cat­ing employ­ees on how the plans work.   A recent sur­vey by Wat­son Wyatt found that 63% of employ­ees spend 30 min­utes or less in mak­ing their ben­e­fit deci­sions as com­pared to 6.8 hours for a car and 1.3 hours for shoes.   The article’s pur­pose is to get employ­ers to con­duct ongo­ing ben­e­fit edu­ca­tion, even beyond open enroll­ment sea­son.   As some­one who works for a com­pany that edu­cated its staff about the new high deductible health plan and HSA in a 30 minute meet­ing, I think employ­ers need to take heed to the mes­sage of this arti­cle.  The Con­sumer Dri­ven Health approach may work but peo­ple need to under­stand it - beyond the higher out-of-pocket responsibility.

What is the Pres­i­dent talk­ing about?  Excer­cise.  May is Phys­i­cal Fit­ness month and in cel­e­bra­tion, the Pres­i­dent went on a bike ride.  But before doing so, joined by Sec­re­tary Mike Leav­itt and a bunch of reporters, he spoke about the impor­tance of excer­cis­ing 30 min­utes a day to keep our bod­ies in top shape.  Pre­ven­ta­tive care goes along with the President’s plan to have Health Sav­ings Accounts fix the health­care cri­sis in Amer­ica.  In any event, it was a very impor­tant mes­sage that every­one, no mat­ter what side of the debate you are on, should lis­ten to.

America’s Health Insur­ance Plans (AHIP) released the results from its sur­vey of insur­ance plans and noted that 4.5 mil­lion peo­ple have enrolled in health insur­ance plans with health sav­ings accounts as of Jan­u­ary 2007.    The Amer­i­can Med­ical News report explains that the increase of 1.3 mil­lion over the pre­vi­ous year (43% growth) is sig­nif­i­cant but far less than the increase in enroll­ment between Jan­u­ary 2005 and Jan­u­ary 2006.  Dur­ing that time period, enroll­ment increased by 220%.

But let’s read this infor­ma­tion another way.  As stated in the AHIP press release, the sur­vey shows 4.5 mil­lion Amer­i­cans are now cov­ered lower-premium, high-deductible health insur­ance plans that are offered in con­junc­tion with an HSA.  Open­ing an HSA is not manda­tory and ear­lier stud­ies have shown that a large major­ity of the pop­u­la­tion does not open the HSA.  So, what we are left with is a report that states that 4.5 mil­lion Amer­i­cans now have to pay more out of their pock­ets because their deductibles are much higher.

A recent arti­cle in the Chicago Sun-Times about how great health sav­ings accounts are was obvi­ously writ­ten by United Health­care or United Health­Group.  The arti­cle explains that it was Golden Rule Insur­ance Co., part of United Health­care, that devel­oped HSAs about 15 years ago and so far its mem­bers have saved $165 mil­lion in their accounts.  The arti­cle goes on to say how great HSAs are for small busi­nesses or the self-employed.  This may be true from a busi­ness point of you.  How­ever, as an indi­vid­ual with a high deductible health plan and a funded HSA, the admin­is­tra­tive has­sle of mak­ing sure I am pay­ing only for what I am sup­posed to be pay­ing for is no pic­nic.  I would like to see an arti­cle on how best to keep track of all of the EOBs, allowed amounts, deductible amounts, account deduc­tions, etc.

Cigna recently announced that it has teamed up with Intuit Inc. to offer an online health tool, Quicken Health, to help mem­bers man­age their health care finances.  The Hous­ton Busi­ness Jour­nal explains that the prod­uct is expected to be avail­able to Cigna mem­bers in 2008.   This ser­vice will be very help­ful espe­cially to those who have high deductible health plans with or with­out a health sav­ings account.

There is a very inter­est­ing essay pub­lished in yesterday’s New York Times about an Epi­demic of Diag­noses.  The essay, writ­ten by sev­eral physi­cians, explains that in the past, many peo­ple lived with minor phys­i­cal or emo­tional sen­sa­tions and chalked it up to being a part of life.  Today, how­ever, those sen­sa­tions are being con­sid­ered symp­toms of dis­ease and peo­ple are enter­ing the health care sys­tem for treat­ment.  Every­day expe­ri­ences like insom­nia and twitchy legs are now diag­noses: sleep dis­or­der, depres­sion, rest­less leg syn­drome.  With the epi­demic of diag­noses comes an epi­demic of treat­ments.  Not all treat­ments have impor­tant ben­e­fits and some may have harms — which may take years to emerge.

In his State of the Union Address, Pres­i­dent Bush explained that one way to make insur­ance cov­er­age afford­able for all fam­i­lies was through the use of Health Sav­ings Accounts — which by design are cou­pled with high deductible health plans.  Since then we have con­tin­ued to hear good and bad feed­back on whether HSAs are work­ing.   This week, the Kaiser Fam­ily Foun­da­tion released its National Sur­vey of Enrollees in Con­sumer Directed Health Plans which details who is actu­ally enrolling in the high-deductible health plans and what they think of the plans so far.  Not sur­pris­ingly, the major­ity of the enrollees were found to be wealth­ier and more edu­cated than those enrolled in tra­di­tional health plans.  Lower pre­mi­ums and tax-preferred sav­ings were listed as the main moti­va­tors for enrolling in the plans.