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November 29, 2006
Health Savings Accounts and the Problem of the Uninsured
We have experienced an increased number of uninsured patients for the past 16 years as insurance premiums have escalated and employers have been reducing and eliminating health insurance benefits as part of the employment package. In 1990, 34.4 million Americans were uninsured. At that time, 85% of the uninsured patients were members of a family with a working adult. Today, that number is 46.6 million, according to a new Census Bureau report.
Can Health Savings Accounts help reduce this number?
46.6 million represents 15.9% of our population up from 15.6% of our population in 2004 representing an increase of 1.3 million in the last 2 years. The number of workers with no health insurance rose from 26.5 million to 27.3 million. Nearly all the increase in uninsured was among working adults.
Do you think we need a creative innovative solution to ensure that all Americans have affordable and comprehensive health insurance coverage? You bet!
Congress has so far failed to reach a consensus on how to even approach the problem.
Our difficulty is we have an elected Congress that professes to support the publics’ vested interest but in reality is swayed by vested interests’ political contributions. This is the reason they are in a State of Denial about everything including medical care of our population. America does great when the crisis is overwhelming. When the crisis subsides we resort to our highly developed short attention span and ignore our problems. We leave ourselves vulnerable to be taken advantage of by stakeholders who are protecting their vested interests.
What should we be focusing on?
1. As the price of insurance has increased and out of pocket payment for the employed has increased, the price of coverage has exceeded the price the employers can afford.
2. People working and not covered by employer provided health insurance have to pay for health care premiums with after tax dollar, while their employers pay for employee health insurance with pre tax dollars.
3. Evolving tax laws and employee benefit laws are causing employers to act in ways that cause the employer to provide fewer benefits to the employee. The biggest impact is felt by moderate to low income families. They are priced out of the market. If they get sick, they figure they can get medical care paid for by their community. The result is an increase in economic pressure on the individual and the community.
In light of this the stakeholders try to protect their vested interests at the expense of the patients and society. Policy makers have proposed to force everyone to buy insurance. The goal is to force the employer to buy insurance for the employee, or force the uninsured to buy insurance or go on Medicaid. The State of Massachusetts just passed a law mandating insurance and guarantying insurance for all.
It seems all of these proposals ignore real reason people do not buy insurance on their own in the first place.
They cannot buy reasonably priced insurance on a before tax basis. The patient is disadvantaged by an expensive and defective third party payer insurance system that does not permit them to control their healthcare dollar.
A Health Saving Account system in a Price Transparent environment cures all these defects. Real insurance would be sold to individuals using after tax dollars in a freely competitive environment. The competitive environment would not be price manipulated by the insurance industry as the Medicare Part D benefit is. People would have an economic motivation to purchase insurance and keep themselves healthy. If someone had a chronic illness and if they avoided the complications of disease they could be rewarded economically.
Families on Medicaid could be motivated in the same way with the government providing the same or similar subsidies. The cost of care to State governments would be less than it is today. However, we would be empowering to the Medicaid family to make independent decisions rather than demoralizing these families in the present system of care rationing.
Americans yearn to be free and make free choices. We are not a dumb society even though our education system is crumbling. We need enlightened leadership not imprisoned by our hierarchical bureaucracy. It is going to be up to the population of 40-50 year olds to step forward and say “we are sick and tired of this and we do not want to take it anymore.”
Learn more about Health Savings Accounts at http://www.health--savings--accounts.com
Posted by Wiley Long at 08:43 AM | Comments (0)
November 27, 2006
Summit Offers Evidence to Quiet Health Savings Account Critics
Among the main criticisms of Health Savings Account Plans are they only appeal to the young, healthy and wealthy. However, a recent Washington, D.C., gathering of health and policy leaders sought to drown out Health Savings Account detractors with anecdotal and research evidence to make a strong, positive case for the current health care movement.
"Consumer Driven Healthcare is not just about benefit plan design, it's much broader than that," stressed Beth Bierbower, vice president of product design and development for Humana, at the National Consumer-Driven Healthcare Summit. "The shift is going from an HSA plan to a focus on consumerism, and it's an important one."
Point, counterpoint
One of the most important steps in that shift, summit speakers asserted, is letting go of previously held beliefs, such as Health Savings Accounts are only for the rich and young.
For example, research presented by Maureen Sullivan, a senior vice president with Blue Cross Blue Shield - which represents about 40% of the health savings account market - shows a generally even age mix of CDH participants, versus participants in non-CDHP, traditional health plans. Among workers age 25-54, enrollment in HSAs, CDHPs without an HSA and non-CDHPs all hovered between 24% to 27%.
The incomes of CDHP enrollees is more varied than believed as well, affirmed Regina Herzlinger, a professor at Harvard's business school. Herzlinger noted the recent conversions of Whole Foods and Wendy's to HSA-driven CDHPs, saying, "These are cashiers and stockers, who don't have a lot of money to spend, but have [enrolled in HSAs]."
Research from Assurant presented at the summit shows that 62% of HSA purchasers are over age 40, and 42% earned less than $50,000 per year.
BCBS also finds that health status of HSA participants tracks with those in non-CDHPs as well, Sullivan said. Thirty-six percent of HSA enrollees described their health as very good, only slightly higher than the 31% of individuals in non-CDHPs. In addition, those whose health status is described as poor have only 1% enrollment in HSAs and non-CDHPs (see Chart 2).
Lastly, perhaps CDH critics loudly contend that consumers who have enrolled in a CDH plan don't like it. Most notably, a 2005 study by the Commonwealth Fund and the Employee Benefit Research Institute found low levels of employee satisfaction with CDHPs, that employees opted to forgo medical care more often and had higher out-of-pocket costs than traditional health insurance plans.
Grace-Marie Turner, president of the Washington, D.C.-based Galen Institute, calls the study "irresponsible," pointing out the study represented a sample of only 137 individuals in "a 25-minute phone survey, which basically turned into a [complaining] session. The whole basic concept of the study is flawed." Further, BCBS found that HSA participants are more satisfied this year than last with their health coverage.
More information, more flexibility
The real issues hindering CDH progress, summit speakers said, are still largely unaddressed.
First is a lack of more detailed health cost information for consumers. Speakers advocated for more easily understood explanations of benefits - the bill that's not necessarily a bill detailing what insurance covers for certain procedures or doctor's visits - along with more transparent physician cost data, comparison tools and real-time adjudication.
"Health care is the only system where you can come in, receive services, have no idea what they cost and then leave without paying," Bierbower noted, adding that Humana Health Insurance has begun piloting real-time adjudication in two states, and issues "smart statements" to members that detail health costs in ways that are more user-friendly.
William Boyles, editor and publisher of Consumer Driven Market Report, said, "Consumers won't want to shop for health care until they are fully exposed to what that care costs. Once they have full information, they'll be more likely to comparison shop."
As Sullivan bluntly put it: "CDH can't work without transparency."
Speakers also campaigned for more flexible tax treatments for CDH account options.
"The law is rigid. With HSAs, Congress has dictated what health insurance has to look like. Tax law is shaping the health insurance you all have," said John Goodman, president and CEO of the National Center for Policy Analysis. "You can't change health care if you have to run to the Ways and Means Committee every time you try."
Finally, Greg Scandlen, president and founder of Consumers for Health Care Choices, said that in addition to more information and flexibility, consumers need a "trusted agent" in health care. "When you need help with your taxes, you hire a CPA; when you have legal issues, you hire a lawyer. They are hired by the consumer, paid by the consumer and can be fired by the consumer," he explained. "In health care, we've been thinking of the employer as the agent, which turns the whole concept on its head."
Physicians aren't necessarily the best agents, either, Scandlen said. "Often times, physicians don't know true costs, and [consumers'] convenience has never been a priority for physicians. If it were, more would have evening and weekend hours."
However, despite acknowledging the need to make bigger strides, summit speakers and attendees generally were optimistic about the future of CDH.
"The results today are encouraging," Sullivan said. "[CDH has a] wide appeal, consumers are utilizing services differently, and cost and quality data are beginning to become more integrated. The transformation has already begun. We are on our way to a much better health care system." - K.M.B.
Hire an HSA agent at http://www.health--savings--accounts.com
Posted by Wiley Long at 08:38 AM | Comments (0)
November 24, 2006
Health Savings Accounts Cover Alternative Medicine
A Health Savings Account (HSA) does not cover every type of alternative medicine. However, a person using a Health Savings Account can withdraw money from their HSA account for any type of "qualified medical expense". Qualified by whom... the IRS.
So, the IRS pretty much thinks that proper medical expenses are any types of Western medicine - pharmaceutical drugs, surgery, doctor visits, etc. However, there are many things on the list that are alternative medical options. For example, chiropractors are on the list and so is acupuncture.
With acupuncture, it must be considered medically necessary. That means that a doctor (MD or DO) must say that he thinks you should see an acupuncturist and write a prescription for it. Then you can see an acupuncturist and pay for it with the money from your HSA.
But there's one more thing. When you are using an HSA in conjunction with a high-deductible health insurance policy, you start seeing the real costs of everything you do, up until you hit that high deductible each year.
When you start seeing the real costs of Western medicine, at that point, alternative medicine might start to look really good.
Consider the following:
A routine doctor visit done before you meet your deductible may cost you about $100. That is one hundred dollars for about a seven-minute visit. (HMOs like doctors to have short visits with their patients.)
Now think about an alternative medical provider. Let's take a naturopath as an example. A naturopath may charge about $90 for your first visit. That visit will probably take about an hour and a half.
Let's look at the cost in dollars-per-minute:
- The doctor visit costs $14.28 per minute.
- The naturopath visit costs $1.00 per minute.
You might think a doctor is better qualified to understand your health problems, but do you think they are 14 times better qualified.
Health Savings Accounts will cause all of us to evaluate our options. We'll look at all the aspects of Western medicine and alternative medicine (or integrative medicine) and we'll choose the ones that make the most sense.
Health Savings Accounts will change how we think of health insurance. They are a wonderful tool that almost every American can and should benefit from. And they're available today!
See all the HSA Qualified Expenses.
Posted by Wiley Long at 02:23 PM | Comments (2)
November 21, 2006
More Banks Offering Health Savings Accounts with Additional Benefits
The number of banks that offer Health Savings Accounts has more than tripled since the end of 2005, as more employees enroll in high-deductible health plans that qualify for a Health Savings Account. Nearly 1,100 banks now offer Health Savings Accounts, which allow consumers to set aside money tax-free for medical expenses.
Larger banks are "increasingly getting into the business, attracted by the lucrative combination of deposits, account fees and sales leads for mutual funds, and other investments generated by HSA customers," reports the Wall Street Journal.
According to the Journal, the "abundance of new Health Savings Account offerings is triggering competition that is helping to push fees lower and expanding the options for consumers to invest their savings." Health Savings Accounts typically accrue interest, but banks increasingly are offering other investment options.
Bank of America this week is expected to announce plans to introduce a new credit card in partnership with major health plans that will allow holders to earn rewards points that convert to cash for their Health Savings Accounts. In January 2007, customers will be able to invest their HSA balances in mutual funds offered by the Bank of America's Columbia Management arm.
In addition, JP Morgan Chase later this month will begin allowing individuals to enroll in Health Savings Accounts online, rather than solely through their employers. The bank also offers mutual fund investments to its Health Savings Account holders.
Experts say the "presence of big banks in the industry is expected to quickly spread awareness and hasten the adoption of Health Savings Accounts," the Journal reports. The total number of Health Savings Accounts by the end of 2006 is expected to grow to about 3.6 million with $5 billion in combined deposits, compared with 1.1 million accounts with deposits totaling $1.2 billion at the end of 2005, according to Information Strategies (Carrns, Wall Street Journal, 11/14).
At HSA for America, you can find more banks offering Health Savings Accounts: http://www.health--savings--accounts.com/admins.htm
Posted by Wiley Long at 11:58 AM | Comments (0)
November 19, 2006
Innovative Funding of Health Savings Accounts
Paying employee bonuses directly into their Health Savings Account (HSA) can save employers money and increase the value of Health Savings Accounts.
Providing cash bonuses as HSA contributions is similar to making extra 401(k) contributions to workers based on a company's performance. The strategy favors small and mid-size organizations and will probably work best the second year of the HSA rather then the first year, says Jerry L. Ripperger, director of consumer health at the Principal Financial Group.
Deflecting the tax bite
When a company pays a worker a $1,000 bonus, it costs the employer $1,100 to $1,200 because of payroll and associated taxes. Moreover, the money is supplemental income, which is withheld at the highest marginal tax rate, so the employee will only see about $500 or $600 of the bonus. This takes away the motivational impact of the bonus, Ripperger says.
However, if an employer puts the $1,000 in a Health Savings Account, which is not subject to Federal Insurance Contribution Act, or FICA, and Federal Unemployment Tax Act (FUTA) taxes; it's treated just like a premium for tax purposes. That is, $1,000 costs the employer $1,000. The money is not imputed income to the employee if used on medical expenses, so the worker gets the full $1,000.
Ripperger, who specializes in consumer-driven health care and HSAs, admits some of his clients are using the approach implicitly rather than explicitly. That is, they are thinking about how the business is operating as they determine next year's HSA contributions. "And that's okay, but what I really want to encourage them to do is get more explicit and put some formality around it," he says.
The approach really works the cleanest with small and midsize companies because they can easily move all of their employees to a high-deductible plan with a HSA combination.
It's a little less of a prefect fit if you have 10% of your employees in a high-deductible plan with a HSA. That doesn't mean a profit-sharing model for contributing to employees' HSAs can't work; it still can, Ripperger says. It just means it will work better on a full replacement basis.
Likewise, "it's important that the employer contribution to the HSA be determined and communicated prior to open enrollment so individuals can maximize their tax-advantaged savings. Remember, employees can contribute to the HSA as well as the employer, providing additional tax savings," Ripperger observes. "We are not asking to replace any current profit-sharing plans that an employer has in place. We are merely asking them to take some of the tenets that they use and apply them to funding part of their heath care plan."
Ripperger believes by offering cash bonuses as HSA contributions, employers can start to address the magnitude of health care cost, particularly if the measure can get workers better engaged in making decisions about their health and health care.
"We can examine the health care cost by closely aligning it to organizational goals by using tools such as a profit-sharing approach," he adds.
Other funding options
Recently, the Internal Revenue Service offered more guidance on HSAs, and "now we are seeing some pretty good flexibility in offering non-comparable contributions," says Alexander C. Domaszewicz, a senior consultant at Mercer Health and Benefits in California. He agrees that some employers might see this as opportunity for a profit-sharing program based on funding HSAs on corporate performance.
Under current laws, employers are penalized with a 35% excise tax for failing to make a comparable contribution to the HSAs of its employees during a calendar year. Consequently, "we saw a little bit of a freeze on folks being too aggressive in how they interpreted the law and trying to do too much around individual performance bonus and HSAs," says Domaszewicz.
Now, policymakers have opened the door for employers to be creative with funding HSAs and cafeteria plans.
"For example, if you run your HSA contributions from the company to the employee through your Section 125 cafeteria plan, which includes being able to allow for payroll reductions, then you are able to avoid comparable contribution requirements because you are then subject to the ERISA rules and nondiscriminatory rules through your 125 plan," says Domaszewicz.
But organizations seeking to reward workers through HSAs should make sure they fully understand the laws and regulations on employer HSA contributions.
"If it's cash, then you have to put money into a HSA in a way that meets the comparable rules, and that means either the same percent of the deductible or the same dollar amount," says Scott Keyes, a health benefits consultant at Watson Wyatt in Stamford, Conn.
So, for example, "[If] I get $100 and you get $1,000 dollars, that means you have $900 dollars more in a HSA. That's going to violate the rules," Keyes point outs.
However, employers can get around those rules by permitting the employee to defer the bonus and put it into a HSA at a later time. Bear in mind, though, a worker with a $1,500 high-deductible health plan who already has $1,000 in a HSA can only put in $500 more for that year. Therefore, if you receive a $1,000 bonus, you can only put $500 in the account. - L.C.B.
Learn more about HSAs at: http://www.health--savings--accounts.com
Posted by Wiley Long at 11:00 AM | Comments (0)
November 17, 2006
United Healthcare Offers New Health Savings Account Plan in Ohio
They are working, but they are uninsured. Cleveland has one of the highest rates of single, working, uninsured people in the United States including more than 129,000 individuals ages 35 to 54. This demographic group cited several barriers to purchasing health insurance including affordability, ineligibility for a group plan, complacency, and lack of satisfactory options available.
To combat these barriers, United Healthcare is piloting a health insurance program, Belay, with a Health Savings Account option, designed to reach these individuals ages 35 to 54 who are working and uninsured and provide them with a solution for their health and financial security.
The Belay program offers two affordable, direct-to-consumer health insurance plans, Belay 100 and Belay HSA 100. In Cleveland, costs for the new Belay plans range from $78 to $109 per month. In comparison, average COBRA premiums range from $200 to $500+ per month based on employer, insurer and plan selected, according to Benefits Administration Services, July 1, 2006 Bulletin.
In addition to offering an affordable solution, a key component of the pilot is getting the word out that there are alternatives to COBRA or just doing without health insurance. A multi-faceted outreach campaign, including radio, print and online advertising, was launched this week at a rock-climbing-themed event.
In rock climbing, “belay” refers to the practice of controlling the rope fed to a climber to prevent a fall; the rope system provides needed security to ensure the climber’s safety. United Healthcare’s Belay health plans offer individuals similar security, protecting them from potential financial setbacks that can result from unexpected and emergency health issues such as a knee injury, cancer or a heart attack. A cancer diagnosis can cost nearly $50,000 for treatment excluding surgery costs, while 12 months of post-heart attack care can set someone back $26,000, according to Symmetry Health Data Systems, National ETG Benchmarks, 2006.
“The Belay plans are affordable and simple health insurance options to cover individuals in the event of major and unexpected health crises, providing Cleveland’s uninsured workers with an answer to their health insurance concerns,” said Lisa Chapman-Smith, executive director, United Healthcare. “Too often, people believe that COBRA provides the only alternative to personal coverage and that individual health plans are financially out-of-reach or are too complicated to access. United Healthcare’s Belay plans are an affordable, hassle-free alternative that can help secure the financial and personal well-being of uninsured workers.”
The Belay program products, Belay 100 and Belay HSA 100, are similar in many respects: both feature low monthly premiums, cover policyholders in the case of major medical emergencies and offer basic preventive coverage. Belay 100 is a high-deductible plan, which benefits individuals who just want coverage for unexpected illnesses or accidents. Belay HSA 100 is similar but also offers a Health Savings Account (HSA), which is a tax-favored savings account created for the purpose of paying medical expenses. Contributions to HSA accounts are 100 percent deductible; withdrawals are not taxed; and interest earnings are tax free; if used to pay for qualified medical expenses. Both health plans are underwritten by Golden Rule, a United Healthcare company, and are available direct-to-consumers through an easy application process.
Rock Climbing Kick-off
On Nov. 14, world-renowned speed climber and three-time X-Games gold medal winner, Hans Florine, demonstrated the importance of being “on belay,” or secured, in rock climbing at a live performance at the Tower City Shopping Center. Hans Florine was joined by Project Bandaloop, an artistic performance group, to perform on climbing ropes suspended from the atrium ceiling, four stories high. The launch event also featured guerilla marketing teams – dressed in rock-climbing gear – that spread the word about Belay that day and across Cleveland in the coming weeks at sports restaurants, near home improvement stores and other venues.
Posted by Wiley Long at 10:20 AM | Comments (4)
November 15, 2006
Blue Cross Blue Shield Releases New Health Savings Account Survey
The national Blue Cross Blue Shield (BCBS) Association has released a new survey of people using consumer-driven health products, especially Health Savings Accounts (HSAs). The study is based on Web site interviews with 3,000 BCBS consumers, a much larger sample than some other HSA surveys that have been conducted in the past.
The results reveal some interesting data, including differences between the behavior of people who have opened an HSA account and those who haven't done so. Here's what they found:
About 57 percent of those with HSA-qualified health insurance coverage have opened accounts, with another 16 percent saying they intend to. Enrollment by age and health status is similar across product lines.
The biggest differences between people with a Health Savings Account and those in a health plan that is not consumer-driven show up in their behavior and reported satisfaction. People with HSAs are more likely to say they are much more or somewhat more satisfied than they were the previous year with their overall coverage (47 percent), the value they receive from their coverage (44 percent), and their perception of being in charge (36 percent).
Blue Cross Blue Shield HSA survey respondents enrolled in plans that are not consumer-driven ranked their satisfaction on the three measures much lower: 27 percent, 23 percent, and 18 percent, respectively. More specifically, HSA enrollees report greater satisfaction with respect to:
* Access to prevention and wellness: HSA holders 59 percent; non-consumer-driven (non-CD) plans 52 percent;
* Health plan enrollment process: HSA 65 percent; non-CD plans 61 percent;
* Decision tools in selecting providers: HSA 55 percent; non-CD plans 47 percent;
* Decision tools in managing expenses: HSA 54 percent; non-CD plans 42 percent;
* Information on benefits: HSA 57 percent; non-CD plans 47 percent;
* Cost and quality information: HSA 54 percent; non-CD plans 40 percent; and
* Insurer's Web capabilities: HSA 55 percent; non-CD plans 45 percent.
The actual use of tools is higher for HSA holders, too:
* Use of nurse hotlines: HSA 10 percent; non-CD plans 6 percent;
* Wellness programs: HSA 20 percent; non-CD plans 8 percent;
* Provider information tools: HSA 38 percent; non-CD plans 10 percent;
* Prescription cost and comparison: HSA 42 percent; non-CD plans 19 percent; and
* Web site use for coverage information: HSA 53 percent; non-CD plans 32 percent.
Learn more about HSAs and Blue Cross Blue Shield plans that qualify to work with an HSA at: http://www.health--savings--accounts.com
Posted by Wiley Long at 09:07 AM | Comments (1)
November 13, 2006
NCPA Health Savings Account Report
A new report provides confirmation of what proponents of Health Savings Accounts have long asserted - putting patients more in touch with the cost of care is essential to controlling those costs, according to Devon Herrick, a senior fellow with the National Center for Policy Analysis (NCPA).
The report, by Massachusetts Institute of Technology's Jon Gruber, was a retrospective analysis of the landmark RAND Health Insurance Experiment (HIE), originally conducted in the 1970s. Gruber found people cut back on their use of health care the more they have to share the costs of that care.
According to Gruber:
- When cost-sharing moved from zero (i.e. free care) to 95 percent, total health care spending fell about 30 percent.
- More telling however, outpatient spending fell 40 percent while face-to-face doctor visits fell by 60 percent.
"The less people are insulated from the costs of health care, they less likely they are to run to the doctor every time they have the sniffles," said Herrick. "When patients are responsible for paying even a small portion of their medical bills, they begin to change their spending behavior."
Public health advocates fret that patients cut back on care, worrying that prevention now will save higher expenditures in the future. Yet, taking the choice away from the patients and putting everyone on free care doesn't substantially improve the overall health of the average person.
"As health care consumes an increasingly large chunk of Americans' budgets, someone will have to decide between medical care and other uses for our money," said Herrick.
"When given a choice, individuals choose the option they feel is best for them. While their choice might not please public health advocates, cutting back on medical usage appears to have little detrimental effect on their health."
http://www.health--savings--accounts.com
Posted by Wiley Long at 08:31 AM | Comments (2)
November 11, 2006
Health Savings Accounts Propel Medical Debit Cards
Could the wave of the future be medical debit cards? How far fetched is it to believe that one swipe of a debit card can reveal your identity, your health record, and your health plan coverage and eligibility information? Not as far fetched as you think. And Health Savings Accounts are helping to propel this type of innovation.
According to HealthLeaders-InterStudy, a provider of managed care and healthcare market intelligence, insurers and payment processors are building technology systems to link banks, payors, providers and consumers together.
The ultimate goal is a smart debit card that will carry all the information needed to make a healthcare purchasing transaction transparent, efficient and seamless.
The majority of health accounts do have debit cards tied to flexible spending accounts and health reimbursement arrangements, which are set up and controlled by employers to pay for employees’ qualified medical expenses. Industry observers say the more recent adoption of Health Savings Accounts, which are tied to high-deductible health insurance plans, will further propel debit card use.
However, most systems do not feature instant processing and approval of a health insurance claim... and without that “real-time claims adjudication” feature, most health purchases cannot be as simple as a department-store purchase.
A few large insurers are making progress. Humana Health Insurance has launched a successful real time claims adjudication system in six medical practice sites so that physicians’ offices can be paid in a matter of seconds. This four-month pilot project enabled the clinic staff at MacGregor Medical Center in San Antonio, Texas, to get a claim back from the insurer so the bill could be presented to the patient on the spot.
United Healthcare is unveiling an integrated ID and debit card that will store members’ identification, eligibility status and health records. Using a card reader connected to the provider’s computer via a standard USB port, the provider can then call up the patient’s information on the UnitedHealth-CareOnline provider portal. This system would enable a claim to be submitted, and within 10 seconds the provider would know the reimbursement and how much the patient would owe.
All this innovation will further help Health Savings Account owners now and in the future. Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at 10:15 AM | Comments (0)
November 09, 2006
United Healthcare - Golden Rule to Start Offering Health Savings Accounts in North Carolina
United Healthcare's Golden Rule Insurance Company, a leader in the individual health insurance market for 60 years, announced it will begin offering a wide range of affordable health plan choices in North Carolina for individuals and families not covered by employer plans.
Golden Rule's product portfolio includes Health Savings Account (HSA) plans, other high deductible plans and more traditional co-pay plans. "Saver" options within each type of plan feature Golden Rule's lowest premiums and are designed for people who thought they could not afford health insurance until now.
The “Savers” provide customers with protection from the more costly medical expenses that can break a family’s budget, like hospital confinements, outpatient surgeries or CAT scans. Premium costs are lowered by limiting the amount of coverage for the more routine expenses, like doctor visits.
In addition, United Healthcare - Golden Rule is able to provide its customers significant discounts on medical care through United Healthcare’s network of more than 19,000 physicians and 194 hospitals in North Carolina as well an extensive national network of healthcare providers and facilities.
“Golden Rule understands that most Americans struggle with health care costs, especially hardworking individuals and families who have to buy their own health insurance,” Richard A. Collins, Golden Rule CEO said. “We believe that North Carolinians will find that Golden Rule offers a choice of lower cost, high quality health plans along with a strong dedication to customer service and prompt payment of claims.”
“North Carolinians who do not have health insurance available through their employers have a critical need for affordable health insurance,” said Austin Pittman, CEO for UnitedHealthcare of North Carolina. “The scarcity of such insurance up until now is a likely contributor to our state’s large number of uninsured children. These new health plans from Golden Rule are priced to meet the needs of working people.”
“Golden Rule looks forward to serving our new customers in North Carolina and we are pleased to be doing business in the state,” Collins added.
Golden Rule helped pioneer the Health Savings Account (HSA) which combines a high deductible insurance plan with a tax-favored savings account. Golden Rule customers typically save 45-55 percent or more in premiums by choosing a health savings account plan over a more traditional plan. In addition, HSAs offer triple tax advantages: the savings go in tax deductible, grow tax deferred and can be withdrawn tax free as long as they are used for qualified medical expenses including vision and dental.
Today, 40 percent of Golden Rule customers are covered by HSA plans and, as of June 30, 2006, its customers had accumulated more than $170 million in their health savings accounts. Importantly, a third of Golden Rule HSA buyers in 2006 were previously uninsured.
In addition to North Carolina, Golden Rule currently offers health insurance in 28 other states and is rated “A” (Excellent) by A.M. Best, and “A+” (Strong) by Standard & Poor’s, independent rankings that indicate financial strength and stability.
For more information, visit our United Healthcare Golden Rule health insurance page: http://www.health--savings--accounts.com/golden.htm
Posted by Wiley Long at 12:20 PM | Comments (0)
November 07, 2006
Year-End Health Savings Account Tax Strategies
2007 is just around the corner, and there are several issues to consider if you currently have a Health Savings Account (HSA), or are planning on getting one in the near future.
100% of the deposit you place in your HSA is deductible on your federal income taxes. All but four states also make HSA contributions tax-deductible on state income taxes. If you are looking to reduce your 2006 tax burden and put away more money for retirement, your HSA is the first place you should put your money if you have not yet maximized your contribution.
The maximum you can contribute to your Health Savings Account in 2006 is the lesser amount of your deductible, or $2,700 for singles and $5,450 for families. Individuals who are 55 or older may contribute an additional $700. Note that contribution limits are pro-rated, based on the number of complete months during the year in which you have a qualifying HSA health insurance plan.
You have until April 15 (or later if you file for an extension. Update 8/20/2007: this information is incorrect. You cannot extend the deadline for your HSA contribution by filing an extension.) to make your 2006 contribution. If you do not fully fund your account for the current year, you cannot make a catch-up contribution for 2006 after this deadline. However, you can reimburse yourself in later years for qualified expenses incurred in 2006, even if you do not have the funds in your account to reimburse yourself at this time.
In 2007, the maximum annual HSA contribution will go up to $2,850 for individuals and $5,650 for families. Individuals 55 or older will be allowed to contribute an additional $800.
To maximize your tax benefit for 2007, it is important to have your HSA-qualified health coverage in place no later than January 1.
In order to pay for a medical expense from your HSA, it must be a qualified expense. Some of these qualified expenses include dental expenses, eyeglasses, chiropractic visits, over-the-counter medications, and sometimes even nutritional supplements.
Now is a good time to make sure you have an accurate record of your medical expenses for the year. Make sure you separate the expenses for which you have reimbursed yourself from your HSA from those that you paid for out-of-pocket. You'll want to keep receipts for all medical expenditures paid from your HSA with your 2006 tax records. Place the "non-reimbursed medical expenses" in a separate file, keeping them with the concurrent year's tax records in whatever year you decide to reimburse yourself.
The penalty for over-funding your HSA is a whopping 6%. You have until April 15, 2007 to withdraw excess funds for the 2006 tax year to avoid the penalty. Your HSA administrator may notify you of any over-funding, but they are under no obligation to do so. It is your responsibility, so make sure you check into this if you think your may have over-funded you account.
The minimum deductible for HSA-compatible health insurance plans in 2006 was $1,050 for individuals and $2,100 for families. In 2007 this will increase to $1,100 for individuals and $2,200 for families. If you currently have an HSA-qualified plan with the lowest eligible 2006 deductible, that deductible will automatically go up on January 1 to the new minimum.
Strategies to Maximize Your Tax Benefits
There are basically three different strategies you can take when deciding how to fund your health savings account.
1. Put no money in the account, except when you incur a medical expense. This strategy allows you to legally "launder" any money used to pay medical expenses. In other words, by depositing money into your HSA, then immediately withdrawing it to reimburse yourself for medical expenses, you are making your medical expenses all tax-deductible. You may want to use this strategy if you are on a tight budget and want to keep your cash outlay as low as possible.
2. Fully fund the account, or at least put in as much as possible based on your budget. Take money out of the account any time medical expenses are incurred, and let the rest grow tax-deferred. This strategy will maximize your tax deduction, while making your HSA funds available to pay any non-covered medical expenses before your deductible is met.
3. Fully fund the account, but pay all medical expenses from a non-HSA account. Reimburse yourself for medical expenses at a later date. This strategy will allow you to maximize your tax deduction, and will also allow you to maximize the tax-deferred growth of your HSA. You can then reimburse yourself, tax-free, at any time in the future for medical expenses incurred over the ensuing years.
To maximize the potential growth of your funds, you may want to make your 2007 deposits as early in the year as possible. Any growth in your account is tax-deferred, like an IRA. If possible, you should plan to make your deposit the first week in January.
Posted by Wiley Long at 09:18 AM | Comments (21)
November 05, 2006
Health Savings Accounts Becoming A Paradox for Administrators
Javelin Strategy & Research has published a new report concluding that Health Savings Accounts (HSAs) represent a paradox for HSA Administrators and payment leaders. HSA Administrators cannot overlook the long-term opportunities for asset growth, yet they must plan to address problematic consumer awareness and interest along with other thorny healthcare industry issues.
Here is what the HSA report found:
“HSAs are an important strategic priority for HSA Administrators and financial services executives,” said Bruce Cundiff, Senior Analyst at Javelin Strategy& Research. “But financial institutions must navigate unclear and complicated business-to-business relationships to ensure profitability and customer relationships. The banking industry cannot afford to fumble this opportunity away to the investment sector, as happened with 401(k)s, nor can it take on the mess of the healthcare industry. But consumers must be targeted carefully. Despite their greater use of healthcare services, more than half of all seniors have no interest in Health Savings Accounts, and detailed data-analysis shows seniors may be a much less appealing target than young adults. Financial providers must plan accordingly, as the initial benefits are related to transactions while assets are the long-term play.”
“Consumer-driven healthcare is still years from fruition, and financial executives must enter this new market with keen insight,” said James Van Dyke, President & Founder of Javelin Strategy & Research. “Industry leaders must plan the right steps now to reap long-term rewards. Success depends on thorough market analysis and HSA vendor selection to enable efficient transactions and simultaneous access to a multitude of financial and medical information, all to provide strengthened consumer assets and relationships”.
Learn more about HSAs at: http://www.health--savings--accounts.com
Posted by Wiley Long at 03:39 PM | Comments (0)
November 03, 2006
Rising Healthcare Costs Hurting Household Savings
Americans struggling with rising health care costs say these increases cut into personal savings and impact household finances according to the results of the 2006 Health Confidence Survey (HCS) released by the Employee Benefit Research Institute and Mathew Greenwald and Associates, Inc.
As health care costs continue to rise, Americans who experienced higher health costs report these increases negatively affect household finances. Thirty-six percent say increased healthcare costs result in a decrease in savings for retirement, up from 25 percent in 2004, while 28 percent reported difficulty in paying for even basic necessities, up from 18 percent. Can Health Savings Accounts reverse this trend?
“As the responses indicate, rising health care costs are leading to an erosion of savings and a decline in overall financial well-being. When consumers are faced with tough financial decisions, it often leaves them with little left for savings,” said Jerry Ripperger, director of consumer health for the Principal Financial Group. “Due to rising costs, Americans are falling behind in savings and struggling to handle even basic expenses, which over time has had a significant impact on their confidence in the healthcare system.”
Health Coverage Trumps Increased Pay
When asked specifically about employment-based coverage, most Americans value those health benefits more than an increase in salary. In fact, three-quarters of those with employment-based benefits state they would prefer $6,700 in employment-based coverage over an additional $6,700 in taxable income. Workers said they would need at least $11,000 in additional taxable income to willingly give up employer-sponsored healthcare.
Not surprisingly, the majority of those surveyed report increasing dissatisfaction with the healthcare system with six in 10 Americans rating the system as fair (28 percent) or poor (31 percent). Those dissatisfied with costs increased dramatically with 52 percent saying they were not satisfied or not too satisfied with health costs, compared with 33 percent in 2005.
“Those unhappy with the current system base this largely on rising costs, so it’s logical they would place a high value on health benefits provided by their employers,” noted Ripperger. “Employers should take note, health insurance is not only highly valued by employees, it’s also the most requested workplace benefit. Our experience has shown that high-quality benefits help employers by actually encouraging employees to work harder and stay in their current position longer.”
Quality of Care More Important Than Cost
Although cost was identified as a primary driver for dissatisfaction, the survey revealed that Americans still use quality rather than cost as their primary consideration when making decisions about care. They give more weight to quality when choosing a provider for open heart surgery (89 percent) and cancer treatments (87 percent), while others consider quality over cost when seeking lesser treatments like immunizations or an annual physical (72 percent each).
“When faced with serious health issues, quality is often the most important factor and many Americans feel quality would improve if they had more responsibility for their own care decisions,” said Ripperger. “Programs that include components of consumer driven health care like health savings accounts and wellness programs are increasingly important ways to engage employees to become more involved in healthcare decisions.”
Specifically respondents say that the quality of medical care they receive would improve if they had access to more information about the success of different treatment options (74 percent), information comparing doctors and hospitals on both quality and cost (70 percent). They also believe it would be better if both doctors and hospitals were required to supply information about quality and costs (61 percent).
Perception May Not be Reality For Personal Health
When faced with rising costs, some Americans’ are taking action with many choosing generic drugs when available (82 percent) and talking to their doctor about treatment options and costs (57 percent). Others say they are trying to take better care of themselves as a way to fight costs (80 percent, up from 71 percent in 2005).
“Changing health behaviors is the best way we can make a significant impact on rising costs, but with obesity rates and other health indicators on the rise, I’m not sure Americans are really putting their money where their mouth is,” said Ripperger. “This highlights the need to educate employees about not just healthcare, but also their overall health. Making smarter choices will ultimately impact rising costs and will hopefully begin to change overall health confidence.”
Full results of the 2006 EBRI Health Confidence Survey are published in the November issue of EBRI Notes, which is available on EBRI’s Web site at www.ebri.org.
Posted by Wiley Long at 09:12 AM | Comments (0)
November 01, 2006
Health Savings Accounts for Medicare
Medicare officials say it is time to modernize the health plan by providing American seniors with more information and choice when it comes to their healthcare.
According to the National Center for Policy Analysis, beginning in 2007, Medicare will launch plans with features similar to Health Savings Accounts (HSAs):
- Under the plan, Medicare pays for high-deductible insurance coverage and puts money in an account for the Medicare recipient.
- The money and its earnings accumulate tax-free as long as they're used to buy health care.
- If the money in the account isn't used, it can roll over to the following year.
- Medicare recipients would pay more of their initial costs out-of-pocket, but unlike traditional Medicare there would be a cap on their total spending for the year.
- Medicare said the program would be good for people who already had an HSA in the private market and are familiar with the concept, and those who want more control over health spending or who need protection from catastrophic health expenses.
In many ways, the new Medicare initiatives reflect a shift within the private insurance market to more "consumer-driven" health care. In essence, patients pay part of their health care costs so they have more incentive to stay healthy and choose cost-effective care when they're sick.
John Goodman, president of the National Center for Policy Analysis, says there's a chance the introduction of HSAs will skew premiums, but changing Medicare is worth the risk.
"What we have now is a very wasteful system," Goodman said.
Learn more about Health Savings Accounts and what they can do for you at: http://www.health--savings--accounts.com
Posted by Wiley Long at 07:47 AM | Comments (0)