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October 31, 2005
NY Times article on Health Savings Accounts
Saturdays NY Times had an informative article about HSAs entitled For the Thinking Employee, No-Brainer Health Care Is Passé. More and more employers are beginning to offer health savings accounts to their employees, and the long-term benefits could be quite substantial.
The article points out how the average retiree is expected to need $190,000 to cover medical expenses during retirement, and how HSAs are a terrific way to save for this. It also gives a statistic that we tell our visitors at href://www.health--savings--accounts.com – 73% of all Americans use less than $500 per year in healthcare. Thus, a whole lot of people are over-insuring themselves with plans that have low deductibles and co-pays. They end up paying more for their health insurance than they need to, and they miss out on all the tax benefits that an HSA has to offer.
Posted by Wiley Long at 06:11 PM | Comments (0)
October 28, 2005
Tax Reform Panel looks at Health Insurance Benefits
A bipartisan tax reform panel, appointed by President Bush, is exploring ways to make the tax code simpler, fairer, and more geared toward promoting economic growth. One of the things they are looking at is health insurance benefits.
Currently, employees receive these benefits tax-free, yet if an employee buys health insurance on his own, he does not get a tax-deduction. This tax benefit disproportionately benefits high-income workers (48% of the benefits go to those earning $75,000 or more).
The panel may recommend curbing the amount of tax-free health insurance contributions employers can make, and/or give a tax deduction to those workers paying their own premiums.
Loosening the bond between employer and health insurance is a positive thing. In today's mobile economy, most people would be much better off owning their own health insurance, so that if they leave an employer they don't risk losing their coverage. Tax changes that make taxation of health insurance fair to all is a positive thing.
Find more information on health insurance and Health Savings Accounts at HSA for America.
Posted by Wiley Long at 12:14 PM | Comments (0)
October 26, 2005
Lawsuit helps Health Savings Account owners
In the first decision of its kind in the country, Circuit Court Judge Richard Baldwin certified a class action lawsuit filed on behalf of thousands of uninsured health insurance patients of Legacy Health System ("Legacy"). The lawsuit accuses Legacy of consistently overcharging its poorest and most vulnerable patients -- the uninsured -- by billing them the highest rates without their knowledge. The uninsured as well as Health Savings Account holders stand to benefit from this lawsuit.
The prices these hospitals charge the uninsured far exceed the amount they require the insured patients to pay for the same exact services.
This is a common practice all across the country. Hospitals have an “official” price that almost no one (other than the uninsured) pays. They then give “discounts” to all insurance companies. The person who is paying for healthcare out of their own pocket is thus screwed.
The lawsuit is filed Multnomah County Circuit Court of Oregon and is part of nationwide litigation against nonprofit hospitals for price gouging and price discrimination against the uninsured commenced by Richard Scruggs and attorneys around the country in June 2004.
Hopefully, the end result will be honest and transparent pricing by hospitals, allowing consumers to compare rates and make informed decisions about where to obtain their medical care.
Learn more about Health Savings Accounts at HSA for America
Posted by Wiley Long at 09:32 AM | Comments (0)
October 24, 2005
HSAs will be Bigger than IRAs
U.S. Bank’s Daniel Kelly has predicted that eventually, Health Savings Accounts "will be significantly larger than the IRA market."
The tax benefits of a Health Savings Account far exceeds those of an IRA, 401(k) and every other tax advantaged account. If you have only so much money to put away for retirement, you should put it in your Health Savings Account first.
The reason is that while the money grows tax deferred like an IRA and 401(k), an HSA is the only vehicle that allows you to take money out tax-free, if it is used to pay qualifying medical expenses. Additionally, any money deposited in your account is tax-deductible.
James Knight, Chairman of 1st Pacific Bank of California, expects up to $300 billion per year will be deposited in HSAs. Newt Gingrich, a proponent of HSAs, has predicted that the average HSA-holder will have $250,000 in his account upon retirement.
Get an instant health insurance quote to see if an HSA is right for you.
Posted by Wiley Long at 03:09 PM | Comments (0)
October 22, 2005
Medicaid Health Opportunity Accounts
Last week Senator Mike Crapo of Idaho and Representative Mike Rogers of Michigan introduced bills that would allow Medicaid recipients to set up “Health Opportunity Accounts” (HOAs), which would be similar to a Health Savings Account (HSA). States would be allowed to contribute up to $2,500 per adult and $1,000 per child to these accounts, and receive federal matching funds for the accounts.
The Medicaid recipients with HOA accounts can then use them for health care expenses. The legislation, entitled the Medicaid Health Opportunity Account Act of 2005, is a step in the right direction. As I often talk about in this blog, giving people the power to make their own healthcare decisions, with their own money, will not only benefit them, but it will increase competition, and lower prices for all healthcare consumers.
You can find more Health Savings Account information at HSA for America.
Posted by Wiley Long at 11:15 AM | Comments (0)
October 20, 2005
Can Health Savings Accounts help with healthcare confidence?
The Employee Benefit Research Institute recently released their 2005 Health Confidence Survey, in which 1003 adults were surveyed about their attitudes towards various aspects of health care.
One of the results the survey revealed was that 63 percent believed there would be no change in the quality of their health care if they knew the full price of services they receive.
59 percent believe quality would improve if they had access to more information on the quality of health care providers.
47 percent believe healthcare quality would improve if they had more responsibility for their own medical decisions.
Currently most medical consumers are responsible for just a co-pay for most medical services they use. Most have no idea the real price of the health care services they are about to receive, and have very little ability to discern that information ahead of time.
What if all 3 of these conditions changed? Well, as in any market with competition, quality would improve and price would go down. But because consumers are currently buying medical services with someone else’s money, from providers who don’t post their prices, everyone is being overcharged, often in combination with poor service. This is easy to understand if you think about any other commodity. Clothes, cars, computers – you name it. Quality improves and prices drop over time.
Apologies to all the healthcare providers who offer great service at low prices, as I’m only generalizing. But it is a general truth, as we all know – healthcare costs are out of control. Health Savings Accounts may just be the answer.
Posted by Wiley Long at 09:30 AM | Comments (0)
October 18, 2005
New Health Savings Account Spanish-language brochure
U.S. Treasurer Anna Escobedo Cabral spoke to the California Hispanic Chamber of Commerce in Oakland last month about the release of a new Spanish-language brochure to help Spanish speakers better understand how Health Savings Accounts (HSA) work. Since 30% of Hispanics are currently uninsured, Health Savings Account plans may provide a much more affordable option, and enable more uninsured to gain coverage.
The Spanish-language HSA brochure can be downloaded free of charge from the U.S. Treasury Web site at: http://www.treasury.gov/offices/public-affairs/hsa/pdf/hsa_tri-fold_brochure_es.pdf.
View more HSA Information at HSA for America.
Posted by Wiley Long at 10:29 AM | Comments (1)
October 16, 2005
California continues to tax Health Savings Account contributions
California senators recently decided to continue taxing Health Savings Account (HSA) contributions (report). California is one of only five states that continue to tax HSA contributions. All of the other states have conformed to federal law, allowing a 100% tax deduction for any contributions to Health Savings Accounts. Because over 40% of all HSA owners appear to have been uninsured before buying their HSA policy, these plans provide a powerful way to reduce the number of uninsured.
California, along with Alabama, Maine, Massachusetts, and Wisconsin, should get with the program.
Find more HSA State Income Tax information at HSA for America
Posted by Wiley Long at 04:42 PM | Comments (0)
October 14, 2005
Hospital Price Reporting and Disclosure Act
Last week U.S. Senators Jim DeMint (R-S.C.), Richard Durbin (D-Ill.), and John Cornyn (R-Texas) introduced the “Hospital Price Reporting and Disclosure Act,” bipartisan legislation requiring hospitals to disclose their charges for the most common procedures and drugs administered in an inpatient setting.
“Consumers seeking routine hospital services need to know what they’re paying so they can make educated decisions,” said Senator DeMint. “This bill provides a simple mechanism for hospitals to disclose their prices.”
Specifically, the legislation would require hospitals to regularly report to the Secretary of U.S. Department of Health and Human Services (HHS) the amount they charge for the twenty-five most commonly performed inpatient procedures, the twenty-five most common outpatient procedures, and the fifty most frequently administered medications. The Department would then post this information on the Internet for easy access.
“Americans need access to reliable information about hospital prices in order to make responsible decisions about their healthcare,” said Senator Cornyn. “This legislation aims to give Americans that information in a user friendly format. That’s an important step in the right direction towards empowering consumers to make informed healthcare decisions for their families.”
Hospital charges vary significantly based on facility and procedure. Some hospitals charge just $120 for a chest x-ray while others charge more than $1,500.
“The worst part about price discrepancies is that consumers often have no idea what the cost is from the beginning,” said Senator DeMint. “No other industry expects consumers to commit to buying before they know the true cost. This will make hospitals more accountable to patients. Patients should have access to price information before they commit to a procedure. Information is power, and this bill is an important step in empowering Americans with the tools to be smart consumers.”
On June 30, 2005, a companion bill was introduced in the U.S. House of Representatives (H.R. 3139) by U.S. Reps. Bob Inglis (R-S.C.) and Dan Lipinski (D-Ill.).
These are positive moves, which will force hospitals and other healthcare providers to finally compete in a free market.
Find more Health Savings Account inforamation at HSA for America
Posted by Wiley Long at 10:29 AM | Comments (0)
October 12, 2005
Health Savings Accounts promote price transparency and consumerism
As I talk about often on this blog, one of the biggest impacts Health Savings Accounts (HSA) will have on the healthcare market is the promotion of price transparency and consumerism. There are other trends that are paralleling this movement, in which price and quality information is being supplied to consumers, as people come to realize the previous system of “managed care” does not work. A cursory understanding of economics and history shows that planned and managed economics always loses to the free market when it comes to price and quality.
The Partnership for Change is a union of about 20 employers and unions that have joined with the California Public Employees Retirement System to push for greater quality and price transparency in hospitals in the state of California. This group plans to give higher payments to hospitals that show higher quality and better efficiency.
There is nothing so revolutionary about this, as most companies that provide higher quality goods or services get paid more. The hospital business, though, tends to work very differently. Getting the price of a given procedure is very difficult, and consumers haven’t traditionally had much information upon which to make a decision.
The system in which hospitals have been able to deliver services without having to justify their costs is slowly coming to an end.
Find more Health Savings Account inforamation at HSA for America
Posted by Wiley Long at 05:36 PM | Comments (0)
October 10, 2005
New paper released on Health Savings Accounts in Medicare
Consumers for Health Care Choices has released a paper urging Congress to make Health Savings Accounts available to Medicare recipients. It notes that the Medicare Modernization Act has made a Health Savings Account (HSA) available to all Americans except those on Medicare.
The tremendous number of people opening HSAs will result in a large number of people reaching age 65 with substantial balances in their accounts. They also will have experience controlling more of their own healthcare decisions, yet will currently have to drop that approach because of their age. The article notes that beneficiaries could fund the Medicare HSA with money rolled over from an under-65 HSA, or with money that would otherwise be spent on Medicare supplement coverage, or money that might be spent on out-of-pocket costs.
We support this idea, and believe it would be beneficial to Medicare recipients, as well as further the benefits that consumer-directed healthcare will have on the entire healthcare system.
Posted by Wiley Long at 04:59 PM | Comments (0)
October 08, 2005
A Health Savings Account study on the Future of Healthcare
United Benefit Advisors has published a study of current employer health care cost containment strategies. The study describes their attitudes and their predictions of the future of health care benefits, and how Health Savings Accounts (HSA) could play a major role.
The study reveals two main changes that employers are predicting in health care benefits over the next five years:
1. All hospitals, physicians, and insurers will be required to publicly disclose all prices. This of course will be great for the consumer, as it will finally allow everyone to compare prices and shop for the best value.
2. Employers will begin adopting a 'total compensation' approach in which employees will decide how much of their pay goes to cover health benefits, retirement, or other benefits. This too will be great news for employees. It will allow those who are covered by a spouse's insurance plan to forgo the benefits and increase their take-home pay. Likewise for those who may want to purchase their own lower-cost high-deductible Health Savings Account plan.
These predictions are signs of positive change to the healthcare industry, though the hospitals may not agree...
Posted by Wiley Long at 05:02 PM | Comments (0)
October 06, 2005
Revealing Hospital Prices for Health Savings Account customers
Uwe Reinhardt is a Princeton health care economist who was recently heard on NPR attacking Health Savings Accounts. In an article in the Milwaukee Journal Sentinel, he is quoted lamenting what might happen if hospitals actually had to reveal their prices to the public. "If prices were not kept secret, there would be more pressure on hospitals to become more efficient and to lower costs. The high-cost hospitals would be out of business.”
That any business in the U.S. - including hospitals - should be able to stay inefficient and still stay in business - overcharging their customers and the tax payers - is just plain wrong. Their is growing pressure for hospitals to reveal their prices, so that people can actually compare prices before buying. They'll go kicking and screaming, but I don't think they'll be able to resist the pressure to come out in the open with their pricing structures.
Posted by Wiley Long at 03:11 PM | Comments (0)
October 03, 2005
Guaranteed Issue laws not conductive to Health Savings Accounts
Guaranteed Issue laws allow people to wait until they are sick before buying health insurance, and any insurance company doing business in the state cannot deny them coverage. This naturally has the effect of raising premiums and is not conductive to Health Savings Accounts (HSAs). Can you imagine how much automobile insurance would cost if you could wait until you have an accident before you buy the insurance?
Only five states still have this ridiculous law — Maine, Massachusetts, New Jersey, New York, and Vermont. None of them have any insurance companies that offer HSA plans to individuals, simply because the risk to the insurance company is too high.
State legislatures should of course repeal these laws, but at the very least they should make an exception for Health Savings Accounts. This would make health insurance much more affordable, and would likely have a large effect on reducing the number of uninsured.
Posted by Wiley Long at 09:31 AM | Comments (3)