Health Savings Account Blog

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.

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