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July 31, 2006
New HSA bill could surpass guaranteed issue requirement
Rep. Mike Rogers (R-Mich), has introduced H.R. 5475, the Health Savings Account (HSA) Accessibility and Portability Act. The bill would require insurance carriers to make the high-deductible health plans that accompany Health Savings Accounts portable, as well as cap the rates of individual policies. As a result, insurance companies would avoid guaranteed issue requirements.
"With health savings accounts becoming more and more popular with employees in small businesses, and the accounts being portable from one job to another, we need to provide the same portability for the high-deductible policies that give them backup for their HSAs in the event of major health problems," Rogers said in a statement.
The bill could further fuel business interest in HSAs and at the same time give insurance carriers relief from guaranteed issue requirements for small groups. Rogers says his bill will make insurance more affordable for small businesses because, as some experts say, the guaranteed issue requirements add about 25% to the cost of coverage.
Posted by Wiley Long at 11:01 AM | Comments (2)
July 28, 2006
Start Saving with a Health Savings Accounts
Since World War II, the U.S. health care system has been built on the assumption that most employers will provide their workers with insurance. That assumption is under extreme pressure as health costs have gone up at twice the rate of inflation.
Today more and more companies are testing the waters of an approach that exposes their employees to more of the costs of health care. The theory is, if the money comes out of employees' pockets, they will use only what they need and shop for the best value. This theory works with Health Savings Accounts.
Many employers and self-employed individuals are investigating consumer-driven health care with individual health savings accounts due to the convergence of three powerful trends:
• Rapidly increasing premiums for traditional health insurance.
• A backlash by employees and providers against managed care with provider-side cost constraints.
• A rise in health care consumerism fueled by the Internet and direct-to-consumer advertising for health products and services.
Employers and self-employed individuals are exploring whether these consumer plans can contain health care costs and increase consumer choice and satisfaction concerning health care.
As more Americans discover the advantages of health savings plans and as more companies offer them, consumers will be able to affordably insure themselves. Because most consumer-driven health care plans, like health savings accounts, are portable, individuals won't necessarily have to worry about losing coverage if they change jobs, lose a job or want to start a business.
When individuals have more control over their health care spending, they become better consumers and health care costs are driven downward. The question still remains whether consumer-driven health care plans are the complete answer to our health care problems. The answer will come in time, but this is definitely a step in the right direction.
Find out how a Health Savings Account can start you on the path to finacial healthcare freedom.
Posted by Wiley Long at 07:06 AM | Comments (0)
July 26, 2006
Health Savings Accounts will be a test of time
In the wake of a congressional hearing on ways to make health savings accounts (HSAs) more palatable to consumers and increase HSAs' uptake in the marketplace, United Press International talked with John C. Goodman, an economist and president of the Dallas-based National Center for Policy Analysis who is referred to by some as the 'Father of the Health Savings Account.'
Goodman said that, while some modifications might improve the accounts, all workers will save money in the long run and that Health Savings Accounts are the future of employer-based healthcare.
Q. Does the 'Father of the Health Savings Account' title mean you came up with the idea and how did it begin to catch on as a health coverage option for employers?
A. No, I don`t claim that. ... I learned of the idea from another economist, Jesse Hickson, who (became) the chief economist of the American Medical Association. What I did that was unusual and unique, I started writing about (HSAs) and got some other economists with the NCPA to start thinking about what could be done with this idea.
So we developed it and we promoted it. I was the guy that brought the idea to Steve Forbes, who then tried it out on his own employees at Forbes Magazine. And then I presented the idea to employees of the Golden Rule Health Insurance company; they were the first insurance company to do it.
First, they tried it out on their own employees and when they liked the results, they stated marketing the plan.
Q. In your own observations, what business sectors seem most receptive to the HSA?
A. It`s been very popular among individuals and small businesses. But now the new trend is for some large companies to do this; Wendy`s has done it, Whole Foods has done it. These are companies that have put all of their employees in these plans.
Q. What sectors seem more resistant to HSAs?
A. The big companies, they`re like big battleships. For them to change their health plans takes several years. But what we are told from the surveys is that the majority of employers are really giving this serious thought.
Q. But in the two years or so since HSAs were authorized, the uptake has been only about three million, which is arguably modest. Why do you think they haven`t caught on faster?
A. That is very fast, it`s faster than (adoption of IRAs). In fact, it`s faster than any financial product so far. It may be slow relative to people`s expectations, but ... if you look back at the history of the (uptake) of IRAs and 401(k)s, the HSA product has been faster than those other products. From where I`m sitting, I am not no interested in the number of people (adopting HSAs); what has interested me is the sea change of opinion, because that tells you where the market is going.
And I remember the dark days of the early 1990s, when everybody was on the other side, and all of the business groups, the large trade associations for the insurers, they were all against this idea. And only a few people in Congress had any interest in it at all. And what I have seen is a complete and total sea change. So now the (U.S.) Chamber of Commerce, the various business organizations are all behind this. So we have won the war of ideas.
Q. What do you think changed the tide?
A. I think two things changed it. One, we tried everything else; especially, we tried managed care. We can argue about whether managed care could in principle work or not work, but it turns out that the politicians weren`t going to allow it to work. They were threatening to pass no 'drive-through (outpatient) deliveries'(laws), no 'drive-through mastectomies; (laws). They did pass 'no drive-through deliveries;' no 'drive-through mastectomies' was going to be next. At the federal and sate level, they were not going to allow the companies to do a lot of things that would have curtailed cost.
So what the insurance companies realized and what the employers realized was there was a (limit) to what they were going to be able to accomplish with bureaucratic rules.
Q. Cost-sharing is a cornerstone of the HSA, but a Commonwealth Fund study out this month showed that tax subsidies associated with HSAs would reduce cost-sharing for those who spend the most and for those who spend their least on healthcare, yet increase cost-sharing for the majority of people who fall into the mid-range of spending. So that the roughly 8 percent who account for about 50 percent of healthcare spending would see no change or a decline in cost-sharing. How do you respond?
A. In any one year, what (the survey) describes is correct, but people who are in the middle (of healthcare spending) are not going to stay in the middle; they`re on their way to becoming better or they`re on their way to getting worse, they don`t tend to stay right in the middle. And so, over a number of years, it turns out that there are very few people whose out-of-pocket costs really go up with a conventional (HSA) plan.
Q. The study authors also said that cost-sharing would have to be raised substantially for the high spenders, but that might make healthcare unaffordable for those who need it most. Any comment?
A. The Commonwealth Fund has never liked this idea; they`ve been very slow to look at it. It sounds like they`ve discovered something that people in the business have known for years. (With HSAs), over, say five years, hardly anybody has an increase in out-of-pocket spending. So I think they are just wrong. You have to ask, over a period of years, what is the effect of this, and studies from South Africa (show that) hardly anybody loses in the long run. The(Rand Corporation studies) also show that over time, as people go through their healthy and sick stages, that almost everybody comes out ahead.
Q. How can HSAs be made more flexible?
A. Instead of employers putting the same number of dollars in everybody`s account, they should be able to put more in the accounts of people that they know have higher costs and less in the accounts of those with lower costs. All employers know that employees have different health costs and they pay more for the premiums of some than others, so why shouldn`t they also be able to put different amounts in the (HSAs)? The Bush administration has supported this idea in principle and there are some bills over on (Capitol) Hill that would allow employers to do this.
I would like to see these accounts used creatively to solve the problems of the chronically ill, and to do that, you have to have special contributions depending on the (health) condition and its expected costs, and right now, we`re not doing that.
Q. But won`t such condition-specific accounts create a lot of paperwork for the employer and discourage their use?
A. That`s up to the employer and I don`t think they`ll bother with it unless there`s some returns. But I will tell you that we`ve already started doing this in Medicaid and for disabled patients under Medicaid. About half the states now have private programs called 'Cash and Counsel' which lets disabled Medicaid recipients manage their own healthcare dollars and make their own decisions.
So if a Medicaid beneficiary doesn`t like the person whose bringing the meals by, he can fire that person and hire somebody who does a better job. So it literally lets them control their own expenses. And the satisfaction rates on these programs have been extremely high, like close to 100 percent. So of all the strange places to try this out, it`s in Medicaid, and it`s gone really well.
Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at 09:56 AM | Comments (4)
July 24, 2006
Health Savings Accounts put consumers in control
The cost of health insurance for the average family has tripled over the past two decades. Rising healthcare costs are eating into gains in wages for American workers.
Over the years, individuals and families have lost sight of how their healthcare dollars are actually spent. Health savings accounts (HSAs), however, are changing all that and revolutionizing our healthcare system. HSAs are giving individuals and families control over their healthcare dollars, which is injecting more consumerism and choice into the healthcare marketplace.
HSAs are helping patients and doctors communicate more directly and are causing health insurers to compete better for Americans’ healthcare dollars. HSAs not only give people more control over their health and healthcare dollars but they also provide individuals and families with an affordable healthcare option.
Since the inception of HSAs two years ago, one-third of those who have purchased HSA-compatible insurance were formerly uninsured. Thirty-three percent of HSA-compatible health plans sold are now offered by small businesses that previously did not offer health coverage. In the past two years, over 3 million Americans have discovered that HSA-compatible insurance is the best and most affordable option for the healthcare coverage they need.
Congress must take action to make HSAs an even more affordable, accessible, and consumer-friendly healthcare option. First, individuals and families should be put on an equal footing with employers when purchasing coverage.
Currently, employers use pre-tax dollars to purchase healthcare coverage. In the same way, individuals should be allowed a tax deduction for premiums paid on health insurance.
Moreover, to provide further incentives to individuals and families, Congress should provide a payroll tax credit equal to that enjoyed by employers purchasing healthcare coverage for their employees. By taking away these tax inequities, we can put everyone on the same playing field and expand access to affordable healthcare for all Americans.
Congress should also increase the contribution limit on HSAs so that more savings can build up over the long term for future medical needs. We support doubling the amount individuals and families can contribute to an HSA — up to $5,250 for individuals and $10,500 for families. That way, as money builds up tax-free, individuals and families will realize more savings and will have an incentive to be even smarter consumers in the healthcare market.
Health savings accounts put Americans back in control of their healthcare dollars and empower the doctor-patient relationship. These accounts create incentives for Americans to save for their future healthcare needs and invite consumerism and competition back into the healthcare market.
More market transparency and more competition mean lower prices for healthcare. Lower costs mean more healthcare for more Americans. Congress should use the opportunity it has in July to expand and liberalize HSAs.
Learn more about HSAs at http://www.health--savings--accounts.com
Posted by Wiley Long at 09:01 AM | Comments (0)
July 22, 2006
Health Savings Accounts Will Make Affordable Health Care Possible
There have been outcries in the U.S. for a health care system that is government administered and regulated. Such systems in the rest of the industrialized world have inevitably led to long, sometimes fatal, delays in elective specialty referral and treatment. Primary care and emergency care are usually adequate, because failure in these more common areas of care would have political consequences.
Consumer-driven health care, best represented by Health Savings Accounts, controls cost while preserving choice and availability of quality health care.
Health Savings Accounts provide funds to pay medical expenses, tax free, up to the deductible and are owned by the individual for life. HSA funds cannot be used to purchase general medical insurance, and HSAs are not available to Medicare or Medicaid participants.
Unused HSA funds earn tax-free, compound annual interest and can be used to purchase insurance between jobs. At retirement, the HSA can be converted to an IRA or used to pay for Medicare premiums and deductibles, but not Medigap insurance. At death, the HSA passes to the spouse or to the estate if the spouse is deceased. Patients regain choice in all aspects of their medical care but must assume more responsibility, thereby reducing waste.
As of March, 6.3 million HSA plans and health reimbursement arrangements (similar to HSAs) had been sold with $6.9 billion deposited in the tax-free accounts. The U.S.Treasury Department estimates there will be 20 million to 25 million people covered by HSAs by 2010, under present law, and 40 million to 45 million if Congress expands HSAs, as President Bush has proposed.
Early concerns, that HSAs only favored the wealthy, healthy and young, appear unfounded. Of HSA participants, 37 percent previously had no health insurance; 40 percent earned less than $50,000 per year; 50 percent were over age 40; 19 percent were over age 50; 73 percent are families with children. Premiums ranged from $100 to $460 per month. Patients with chronic conditions are more compliant, and there is increased use of wellness and preventive medicine programs.
Deloitte Consulting, in a new study of large employers, found the cost of health benefits increased 2.8 percent in 2004 and 2.6 percent in 2005 in companies with HSA-type plans. HMOs, PPOs, point of service, and fee for service plans increased by 21/2 to 3 times as much.
The private sector, with governmental support, is engaged in solving the following problems: hospital and physician price transparency; the association of HSAs with comparatively inefficient PPOs; the lack of availability of HSAs to Medicare, Medicaid, and state high risk pool participants; and the danger that an aggressively promoted socialized system will pre-empt the development of HSAs.
Innovative plans are being developed and, in some cases implemented, to allow many Medicare, Medicaid and high risk pool patients to enjoy the choices and responsibilities of the mainstream of health care. Fewer patients will be totally dependent on government-run programs, which could then be funded and administered more effectively.
Learn more about Health Savings Accounts at HSA for America.
Posted by Wiley Long at 10:14 AM | Comments (0)
July 20, 2006
Health Care Choice Act Would Create Competitive Marketplace
The Health Care Choice Act would increase access to individual health coverage by allowing insurers licensed to sell policies in one state to sell policies in any other state. Why is this important? Under the current system, many localities have only one insurance product available, so the consumer is forced to buy an overpriced product, or forgo insurance altogether. The state markets are simply not competitive, says Devon M. Herrick, a senior fellow at the National Center for Policy Analysis.
Because both regulations and mandates are made on a state-by-state basis, the cost of insurance varies widely. For example, California is a large state with a fairly competitive insurance market.
-- A 25-year-old male from Northern California perusing the Web site of the nation's largest independent Health Savings Account agent (HSA for America) can choose from over 84 different plans.
-- These plans range in price from $468 per year ($4,000 deductible, no co-insurance) to $2,952 per year (HMO with $0 deductible, no co-insurance and $25 office visits).
Unfortunately, not every state is so lucky:
-- A 25-year-old male living in Kentucky could get an individual insurance policy for $960 per year.
-- That same male, were he a resident of New Jersey, could expect to pay $5,880 per year for similar coverage.
-- Kansas would price the policy at $1,548, and New York state would rate it at $5,172.
The Health Care Choice Act would allow consumers to shop for individual insurance on the Internet, over the telephone or through a local agent. Residents of any state would be free to choose among policies from any insurer that offers them. The policies would be regulated by the insurer's home state. Consumers would be more likely to find a policy that fits their budget -- giving more people access to affordable insurance, says Herrick.
http://www.health--savings--accounts.com
Posted by Wiley Long at 12:12 PM | Comments (0)
July 18, 2006
Retirement Benefits of a Health Savings Account
When you retire, some of your regular expenses are going to go down. But others are going to go up - and topping the "going up" list is health care. Well before you retire, consider opening a Health Savings Account so you can better deal with those doctor's visits and prescription drugs during retirement.
How expensive will health care be for you during your retirement years? Here's a number to consider: A 65-year-old couple retiring today will need, on average, $200,000 set aside to pay for medical expenses during retirement, according to a recent study by Fidelity Investments.
This number doesn't even include the cost of over-the-counter medicines, most dental procedures and, most importantly, long-term care (such as in-home health care or an extended stay in a nursing home).
Of course, the $200,000 figure is just an average; your costs may be considerably different. For example, you might have retiree health coverage from your former employer, although this seems to be becoming less likely, given the fact that more and more companies are scaling back on precisely these benefits.
To prepare yourself for the six-figure sums you might need to pay for health care, consider these suggestions:
-- Stay healthy. Obviously, you can neither prevent all illnesses nor suspend the natural aging process. However, by eating right, exercising regularly and reducing stress, you can improve your health and possibly reduce the odds of incurring high medical costs in retirement.
-- Contribute to a Health Savings Account (HSA). If you have access to this type of plan at work, consider using it. Your money has the potential to grow tax deferred, and you can withdraw funds from your account tax free, provided withdrawals are used for qualified medical expenses. Keep in mind, though, that the contribution limits to HSAs are relatively low, so your savings will probably not grow enough to cover all of your medical costs. Yet, every dollar can help.
-- Plan ahead for long-term care. If you are fortunate, you will never have to enter a nursing home or require the services of a home health care professional. Still, you never know. People who reach age 65 have a 40 percent chance of entering a nursing home, according to a study by the U.S. Department of Health and Human Services - and in some areas, just one year’s stay in a nursing home can easily cost $100,000. To avoid incurring these catastrophic expenses, consider putting a long-term care protection plan in place.
-- Boost your savings. It’s easier said than done, but try to put away as much as you can while you’re working. Fully fund your IRA each year, and put as much as you can afford into your 401(k) or other employer-sponsored retirement plan. If you "max out" on your IRA and 401(k), you might want to invest in an annuity, which provides the potential for tax-deferred growth of earnings and can be structured to pay an income stream that you can’t outlive.
No one can predict the future. But by recognizing the likely costs of health care during your retirement years, and by taking the steps necessary to deal with these expenses, you can hopefully avoid some unhealthy surprises down the road.
Learn more about Health Savings Accounts.
Posted by Wiley Long at 09:06 AM | Comments (0)
July 16, 2006
Study Shows Health Savings Account Plans Stimulate Positive Consumer Health Behavior
A three year study conducted by United Healthcare has found that individuals with a Health Savings Account are more likely to be actively engaged in managing their health and making health care decisions than individuals in more traditional arrangements. While the study sample remains relatively small because of the recent introduction of Health Savings Accounts, it is the largest study to date, covering a three-year period and examining more than 50,000 individuals. The results provide solid and measurable examples of how health care spending and consumer behavior can be positively advanced - without adverse effects on health outcomes - when consumers are given the necessary support.
"These results reinforce the revolutionary impact that the concept of consumerism is having by providing vehicles to effectively transfer knowledge and wealth to consumers so they can make wiser, more financially sound decisions about their health care," said MikeTarino, CEO of Definity Health.
The Health Savings Account study compares cost and utilization trends among approximately 50,000 individuals in high-deductible plans connected to Health Savings Accounts to data from roughly 15,000 individuals enrolled in preferred provider organizations (PPOs). The study period was between 2003 and 2005 and consisted of two sample groups drawn from the same employers. This new data reinforces the results of earlier Definity and United Healthcare studies, which have consistently shown that HSA enrollees have higher usage of preventivecare services and lower tendency to pursue discretionary acute care services.
Notable findings from the three-year study include:
-- Preventive Care - In each of the three years, up to 5 percent more of the HSA members sought preventive care services than did PPO enrollees.
-- Acute Care - Individuals enrolled in an HSA showed an annual reduction in the use of acute care services (22 percent fewer hospital admissions and 14 percent fewer emergency room visits) without adverse health effects or outcomes, while the relative utilization of those services actually increased year-over-year among PPO members.
-- Chronically Ill - HSA enrollees with a chronic illness also used acute services less (8 percent fewer hospital admissions and 12 percent fewer emergency room visits) but continued to visit their primary care physician at the same rate as chronically ill members enrolled in traditional plans.
-- Overall Costs - Costs per member decreased 3 percent to 5 percent in the HSA plans over the 2004-2005 period, as compared to their 2003 baseline level, while increasing 8 percent to 10 percent among PPO participants (after adjusting for demographics, health status, plan design impact and geography).
"While not yet conclusive, these findings support what we've seen anecdotally for the past several years: when consumers are given more information and responsibility for their health care, they will make efforts to assume more control over decision-making about the care they need in order to pursue the optimum courses of treatment. This in turn can help positively impact their health care outcomes and related costs," Tarino said.
Saving Today for Tomorrow's Expenses
Further United Healthcare research found that consumers with Health Savings Accounts are contributing to their accounts and accumulating money for future health care expenses at higher rates than had been previously anticipated.
The HSA research is based on data from 130,000 members who have opened an HSA with United Healthcare's Exante Bank, the industry's largest HSA administrator. The study found:
-- The average balance in an Exante HSA is $1,112.00 for accounts that were opened January-March 2005, illustrating that consumers are building savings for future health expenses through these accounts.
-- Approximately 60 percent of employers provide funding to their employees' HSAs, and on average employers are funding 40 percent of the employees' health insurance policy deductibles.
-- Nearly 90 percent of employees open the savings account if their employer offers to contribute funding to their HSA.
Jeff Cava, executive vice president of Human Resources and Administration for the Wendy's restaurant chain, said employees at his company are saving more than many anticipated. Wendy's began offering HSAs in 2005, and by the end of the year employees had accumulated a collective $4 million in their accounts. "We took money that used to go to a third-party payer to help pay health claims, and gave it to employees who will use it to offset their health care costs," he said. "How many other company-sponsored health plans are there that transfer wealth?"
Learn more about HSAs at: http://www.health--savings--accounts.com
Posted by Wiley Long at 11:34 AM | Comments (2)
July 14, 2006
CO Insurance Commissioner Puts Faith in Health Savings Accounts
"Entrepreneurs in America have always responded to demand," Colorado Insurance Commissioner Dave Rivera told a recent audience of health insurance brokers.
Since Rivera is in charge of consumer protection, he believes that the market, not government, will solve the nation's health care crisis.
Instead of over regulating insurers, he trusts letting Health Savings Accounts flourish and, in turn, disclosing risk and rewards to consumers.
Not surprisingly, he's a fan of high-deductible health plans and mandate-light insurance policies that give consumers greater flexibility to shop for the benefits and services they want.
Rivera talked with the Rocky Mountain News about what he's been up to in the past 15 months.
What have you spent most of the past year working on?
Big picture, I've been really focused on this movement in many aspects of insurance in moving from a paternalistic system where the employer or government makes a lot of decisions to a system where consumers have a lot more decision-making power.
What are the potential downsides of this movement?
Anytime you give consumers the ability to make a decision that's best for their individual circumstances, that's preferable to having government make that decision for them. But you always run the risk of a consumer making the wrong decision.
And as people become busier and have less time on their hands, it is a challenge to manage all this information. That's why one of our focuses has been on meaningful disclosure. The trick is making sure consumers have information but that it is meaningful and not too much so they don't understand it or won't use it.
Give us an update on title insurance.
It's been a big project that's ongoing. But it fits into something I feel strongly about: You can have a lot of competition and choice, but if you don't have a level playing field, the consumer doesn't benefit.
We believe title insurers set up shell reinsurance companies to provide kickbacks to the referring home builders and lenders. If the title insurer was able to divert a portion of the premiums, aren't these premiums overpriced?
Have you made enemies in the title insurance industry?
I wouldn't say we've made enemies. Our goal again is to help create a level playing field. The companies that were playing by the rules are happy that we're taking these actions.
You've said that health savings accounts are one part of a 10- or 12-step recovery plan for the health care system. What are the other parts?
A good tort environment that discourages frivolous lawsuits will keep down costs and make sure that doctors can afford to practice here and want to practice in Colorado.
You've also said that overuse of health care is the main contributor to rising premiums.
We clearly have perverse incentives, or no financial incentives, to make the right decision in health care. We have little financial incentive to shop around, or little financial incentive to pick up the phone and say, "Do I really need to come in to the doctor now?"
When our family had $15, $20 copays in the old system, if it was a minor cold, we'd just go to the doctor. Now we have an HSA, and at least we ask the question, do we really need to?
How are HSAs going to make a huge dent in costs when they are based on a false premise: namely that unnecessary doctor visits and procedures are the source of sky-high health costs?
If you look at HSAs, they are paired with high-deductible health plans, so you're talking about a $1,050 deductible for someone with a chronic illness, but it's a 30 percent to 40 percent reduction in premiums.
There might be a lot of people who would have had no health insurance at all to take care of those chronic illnesses and who now have access to affordable health insurance.
Tell me some other ideas on your 10-point list.
Health information technology: moving us out of the 19th century, by implementing electronic medical records that preserve privacy and give doctors the information they need so they are not duplicating care.
Who is going to pay for those records?
That's going to be one of the challenges, and government may have to play a role - either through grant funding or financial incentives.
Taxpayers?
Yes, if you are looking at government playing a role.
Find out more about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at 10:05 AM | Comments (0)
July 12, 2006
Can Health Savings Accounts Help Veterans?
The chairman of the Senate Veterans' Affairs Committee Sen. Larry Craig, R-Idaho., wants to create pre-tax Health Savings Accounts for military veterans to help them pay for their own health care. He said health savings accounts, already widely used in the private sector, could be easily provided to veterans.
"With an HSA, individuals or companies can contribute to an account on a pre-tax basis," Craig said in a statement. However, under the current law, veterans enrolled in the Department of Veterans Affairs health care system are prohibited from using an HSA.
"Those funds can then be withdrawn by individuals to pay for qualified health care expenses. When coupled with a high-deductible, low-premium health insurance policy, HSAs allow people to provide for their own health care needs and do so tax free."
Craig’s committee would not have jurisdiction over the legislation he plans to introduce. Because it changes tax law, the bill would be referred to the Senate Finance Committee, which could have difficulty acting on it.
Tax legislation must originate in the U.S. House of Representatives, where there is no similar proposal at the moment. However, if the House were to send the Senate a tax bill, even one unrelated to veterans or health savings accounts, the Senate could attach Craig’s proposal if he can gain enough support.
Under current law, veterans enrolled in the Department of Veterans Affairs health care system are prohibited from using a health savings account. “That’s crazy,” Craig said. “That means a service-connected veteran, using the system the government established to care for his or her injuries now, must surrender a tax advantage. That’s not right.”
Because of how the law is written, it isn’t just a veteran who is denied the tax advantage but also the veteran’s family, Craig said. That’s because the law can be interpreted as prohibiting a veteran enrolled with the VA for health care from having any pre-tax health savings account, whether for the veteran or his or her family.
“With limited exception, VA is not a family health care provider,” Craig said. “That could mean that a veteran who uses the VA health care system may be cheating himself out of contributions to an HSA that could cover his entire family for care that VA will not provide to them.”
Craig said the prohibition doesn’t seem to serve any purpose. “Veterans are just being treated differently under the law, and cannot enjoy a tax break others enjoy.”
Learn more about Health Savings Accounts at http://www.health--savings--accounts.com/
Posted by Wiley Long at 02:18 PM | Comments (0)
July 10, 2006
Health Savings Account Movement Likely to Impact Voluntary Market
Many carriers today seem more convinced than ever of the positive impact that Health Savings Account (HSA) plans will have on voluntary product sales.
According to a recent Eastbridge study, 39 percent of voluntary carriers surveyed believe that long-term care plan sales will increase as a result of the introduction of Health Savings Accounts. This number is up from just 24 percent in 2004. In addition, almost 60 percent think we will see an increase in the sale of hospital indemnity, supplemental medical, and mini-med plans due to the move toward consumer-driven healthcare. This number is up from 44 percent in 2004.
"Health Savings Accounts and high-deductible health insurance plans help employers reduce costs, but the move to higher deductibles is often frightening to employees," says Gil Lowerre, president of Eastbridge. "We know that employees sometimes feel these new plans leave 'gaps' in insurance coverage that employees may not feel comfortable filling themselves. Voluntary products are one way that employees can fill those gaps."
"We are seeing carriers develop or revamp some of their voluntary plans (like hospital indemnity plans) to fit into this market," says Bonnie Brazzell, vice president of Eastbridge. "In fact, almost twenty percent of respondents in our study see hospital indemnity plans as a 'growth' product for their companies over the next few years," adds Brazzell.
Limited benefit medical plans are another example of products that are expected to increase as the medical market changes. "Thirty-five percent of the carriers we surveyed," notes Gil Lowerre, president of Eastbridge, "expect limited benefit medical plans to be a 'growth' product in the voluntary market." While most limited benefit plans would not fit under an HSA, they are quickly becoming an important voluntary benefit to cover those employees not eligible for an employer's core medical plan.
The 2006 Worksite Product Trends Frontline Report updates our 2002 and 2004 studies on the same topic. Where applicable, the current study draws comparisons between this year's results and those of the past two studies. Eastbridge Insight and Information Partner Companies as well as participants in the survey receive the Frontline Report free of charge.
Eastbridge Consulting Group, Inc. is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada.
Learn more about Health Savings Accounts at HSA for America
Posted by Wiley Long at 08:30 AM | Comments (0)
July 07, 2006
Health Savings Accounts Push Greater Price Transparency
As high-deductible policies and health savings accounts force patients to take a greater role in directing their health care, insurers and consumer groups are pushing for greater transparency in pricing.
The New York State Health Accountability Foundation unveiled a website with its newest annual report card, which mixes quality data from several sources to rate hospitals and HMOs on a slew of procedures and conditions. It's one of several similar efforts under way around the state.
And this report, available online at www.abouthealthquality.org, does one thing different than most: it tries to lift the veil on prices.
Included among its ratings of how hospitals fare with heart-attack patients or pneumonia cases is data about what hospitals charge for 15 common procedures and what Medicaid reimburses them.
The data also includes the monthly premium rates charged by HMOs across New York.
"Our hope is that, by publicizing this financial information, we start stimulating a dialogue about health care and efficiency," said Dr. Anthony Shih, vice president for quality improvement at IPRO, a health-quality group that compiled the report.
But unlike bread or gas, the price of health care is negotiable. And in most cases, insurers have negotiated much lower rates for hospital care than what's listed.
While price transparency is important, it must be coupled with education, said Angela Skretta-Huck, vice president of the Northern Metropolitan Hospital Association.
"This, I think, for the average consumer is going to be very confusing," she said.
The data's use is limited at this point, acknowledged Laurel Pickering, executive director of the New York Business Group on Health. But it's a good start to the conversation and part of a growing trend.
Several states now require hospitals to make their prices public. Some insurers have begun posting the rates they pay. And Medicare recently published its payment rates for 30 major conditions.
"It's never just about quality, and it's never just about cost," Shih said. "The key is finding a balance."
Hospital list prices
When it comes to prices for procedures, local hospitals are all over the map. For example, here are list prices for a Caesarean section birth at hospitals across the mid-Hudson in 2004-05, as filed with the federal government.
Private and public insurers negotiate rates that are often just a fraction of the list price. And most hospitals now discount prices for the uninsured, too. But the rates can give an indication of which facilities are more expensive than others, experts say.
Benedictine Hospital $9,788
Bon Secours Community Hospital $23,135
Catskill Regional Medical Center $4,259
Kingston Hospital $6,250
ORMC - Arden Hill $13,936
ORMC - Horton $14,150
St. Anthony Community Hospital $22,975
St. Luke's Cornwall Hospital - Newburgh $10,188
Price Transparency in healthcare continues to gain momentum. With more tools to arm themselves when making healthcare decisions, health savings account owners will be able to make bette choices.
Learn more about health savings accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at 09:03 AM | Comments (0)
July 05, 2006
House Hearing Reveals Health Savings Accounts are Working
At a House hearing before the Ways and Means Committe, witnesses say Health Savings Accounts are a good idea and seem to be working, but they could use a little tweaking to become more widespread.
Business leaders and insurance representatives said Health Savings Accounts should be tweaked to allow employers to contribute more for chronically ill workers and permit workers to have accounts larger than the deductible of their high-deductible accompanying HSA insurance plan. They also called for more transparency so that their employees have access to the information they need to make healthcare decisions.
"The health and wellness of our employees and their families now and in the future will improve as they take more ownership of their health care decisions," said Jeff Cava, executive vice president of restaurant chain Wendy's International, which switched all of its employees to HSAs three years ago.
Since the switch, the 84 percent employee participation rate in company insurance has remained stable, while in the first year the company's healthcare claims decreased by 14 percent, Cava testified.
To ensure the long-term health of employees is protected, the company has tacked on extras -- like full coverage for preventive care and extra contributions for drug costs.
Karen Ignagni, president and CEO of America's Health Insurance Plans, in her testimony suggested making HSAs more compatible with Flexible Spending Arrangements, and enacting a tax credit to help low-income individuals purchase HSA-compatible insurance.
Opponents of HSA expansion argued they discourage employees from preventive care, are not a viable option for the poor, and may further fragment insurance markets.
"Placing greater financial burdens on the sickest and poorest patients is not the right prescription for what ails the health care system," said Sarah Collins, assistant vice president of health insurance research at the Commonwealth Fund.
The Health Savings Account debate is likely to continue for some time. Here's a great article entitled "The Health Savings Account Debate" which goes into more detail.
Find more information online at http://www.health--savings--accounts.com
Posted by Wiley Long at 08:09 AM | Comments (0)
July 03, 2006
BCBS to Offer Health Savings Account Owners More Price Transparency
The Blue Cross Blue Shield Association, along with Highmark Inc., is preparing to roll out hospital quality and comparative pricing data for its members, as part of the growing price transparency movement created by Health Savings Accounts.
The data, which includes Highmark's negotiated rates for various medical conditions, are expected to be available in the Pittsburgh area by January 2007.
"Historically, the local Blues were doing their own things in measuring cost and quality," said Dan Holtz, senior vice president of regional markets at Highmark. "The medical directors all got together and decided to standardize quality and cost measurements."
Officials from the West Penn Allegheny Health System and University of Pittsburgh Medical Center, the region's dominant health care systems, were unavailable for comment about the Blues' new rating system. But Dr. Terence Starz, president of the Allegheny County Medical Society, welcomed the effort.
"It's extraordinarily positive the system is being directed by these quality initiatives," Starz said. "The great challenge, of course, is that these diseases are very complex, making absolute criteria difficult to determine.
"We want to make sure care is not totally defined by cost."
Word of the Blue Cross Blue Shield initiative comes just a week after Aetna Inc. announced it would begin disclosing its negotiated rates with doctors in the Pittsburgh market starting in August.
And in March, U.S. Department of Health and Human Services Secretary Michael Leavitt announced plans to make it as easy to compare prices for knee replacement surgery as it is for televisions. Earlier this month, HHS' Centers for Medicare and Medicaid Services disclosed the prices it pays various hospitals for medical procedures on its Web site.
Holtz said members will see prices for specific conditions, such as a hernia repair, rather than individual medical procedures, which can be confusing to the consumer. Seventeen Blues' plans are working with hospitals in other parts of the country to identify the best ways of packaging this information for Blues' members.
John Check, vice president of benefits at Bellevue-based insurer Seubert & Associates Inc., said transparent pricing is the next step in the evolution of health savings accounts, which are coupled with high-deductible health insurance plans. Easily accessible pricing information is key to the success of these so-called consumer driven health plans, he said.
Included in the Blues' quality criteria will be standards from CMS, which oversees the federal government's Medicare program, and the Agency for Healthcare Research and Quality, an HHS agency that is based in Rockville, Md. The Blues' association also is establishing a preferred provider list for hospitals that provide bariatric surgery, organ transplants and heart care.
The number of procedures performed will be a factor in the Blue Distinction Center designation, Holtz said, which is kind of like the "Good Housekeeping Seal" for hospitals. The designation is voluntary for hospitals, but may present hurdles for some facilities.
So far, fewer than half of the hospitals that perform bariatric surgery that applied for the designation nationwide have received it, Holtz said. The insurer will not disclose the names of the institutions that have been rejected and no Pittsburgh hospital has yet been evaluated.
Special criteria will also be set for hospitals that provide angioplasty, but not open-heart surgery, which the Pennsylvania Department of Health mandates for all but 11 hospitals, which are involved in a demonstration project. Legislation introduced in the state House and recently passed by the Senate would open the door to an increasing number of hospitals to offer angioplasty, a heart vessel-clearing procedure, without cardiac surgery capability.
This is all great news for Health Savings Account owners. With growing price transparency, HSA owners will have more resources when shopping for health proceedures.
To learn more about Health Savings Accounts, visit us at: http://www.health--savings--accounts.com/
Posted by Wiley Long at 09:45 AM | Comments (0)