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July 27, 2007
Health Savings Accounts Leading the Way in Consumer-Driven Popularity
The following are results from Culpepper Benefits Trends Survey on Consumer-Driven Health Plans (CDHPs) offered to U.S. employees in IT, technology, and life science organizations. Results include information on Health Savings Accounts (HSAs), High-Deductible Health Plans (HDHPs) used in conjunction with Health Savings Accounts, and Health Reimbursement Arrangements (HRAs).
Companies are reporting a strong interest in both Health Savings Accounts and Health Reimbursement Arrangements.
Thirty-eight percent of respondents currently offer a High Deductible Health Plans with a Health Savings Account. Another 15 percent plan to offer them within the next two years. Health Reimbursement Arrangements, tax-free plans exclusively funded by employers to be used before any traditional health care coverage, are offered by 19 percent of respondents. Another 28 percent are considering them and six percent plan to offer them within the next two years.
Health Savings Accounts (HSAs)
Health Savings Accounts are more common than Health Reimbursement Arrangements , with 38 percent of participating companies currently offering them. Forty-six percent of companies plan to offer Health Savings Accounts within the next two years or are currently considering the option.
Health Savings Account Enrollment
Enrollment eligibility is high, with companies offering enrollment to an average of 96 percent of employees. However, only 42% of eligible employees participate.
Company Contribution to Health Savings Accounts
Companies most often contribute a flat amount per year to employee Health Savings Accounts. Flat amount per-person contributions average $853 per year, while per-family contributions average $1,528.
Factors Influencing the Decision to Not Offer Health Savings Accounts
Seventeen percent of participating companies have no plans to offer Health Savings Accounts to employees. Concerns over the additional education required to offer Health Savings Accounts and potential employee relations issues are among factors which influence the decision to offer Health Savings Accounts.
You can view the entire results of the survey here: http://www.culpepper.com:80/ebulletin/2007/JulyBenefitsTrends.asp
Posted by Wiley Long at 10:38 AM | Comments (0)
July 23, 2007
California Health Care Foundation Study Supports Health Savings Accounts
The California Health Care Foundation has released a study of U.S. employer health insurance costs. The first finding is no surprise to employers: health insurance premium costs per employee for employers offering health benefits increased more than $1,700, or 85%, from 1996 to 2005. Salaries and wages increased just 39% over the same period. In 2005, health insurance premiums constituted almost 11% of total payroll costs, an increase from 8% as recently as 2000.
The study is full of charts that all point to the same conclusion:
health insurance costs are increasing rapidly, will likely continue to do so, and employers who get smart about ways to control health care costs have a competitive advantage over those who do not.
Health Savings Accounts, Health Reimbursement Arrangements, wellness plans, and other techniques offer tools to manage these costs proactively. Adopting these practices can reduce absenteeism, cut costs, and actually enhance the quality of benefits provided to your employees.
Learn more about Health Savings Accounts and Health Reimbursement Arrangements at: http://www.health--savings--accounts.com
Posted by Wiley Long at 11:16 AM | Comments (2)
July 18, 2007
Single-payer Systems - A Proven Failure
With the release of Michael Moore's new movie SICKO, the debate on healthcare in the U.S. continues to grow. Many well-meaning people believe that a government take-over of healthcare coverage, called a "single-payer" system, is the answer. But if one simply looks at the countries that currently have single-payer systems, it is quite apparent that they are failed systems, with the citizens of these countries clamoring for change.
Because demand goes up when prices go down, the only way a government that provides “free” healthcare can control cost is by limiting access. So citizens in countries with single-payer systems always suffer long waits and lack of access to medical care and technologies.
For instance, in Canada there are currently over 800,000 people on waiting lists for medical procedures. The average wait time for people who are referred for surgery is over four months! If it weren’t for the fact that thousands of Canadians come to the U.S. each year for treatment, the average wait times would be even longer.
Per capita, Canada only has 20% the number of MRIs that the U.S. has, and only 14% as many CAT Scans. There are hundreds of prescription drugs available in the U.S. that are not yet available in Canada as they try to control costs.
The situation in Britain is no better, with over 1 million people currently on waiting lists. In June Britain’s Health Department found that 1 in 8 patients waits over a year for scheduled surgery, and shortages are forcing more than 50,000 operations to be cancelled each year.
Waiting for surgery is not just an inconvenience; it can mean the difference between living and dying. For instance, in the U.S. the survival rate for stage 1 colon cancer is 90%; in Britain it is 70%. American women diagnosed with Stage I breast cancer have a 97% survival rate after 5 years; in Britain it’s only 78%.
As Americans contemplate copying these failed systems, citizens in Europe and Canada are headed in the opposite direction. Germany just recently passed laws to enhance insurance competition, Sweden has begun privatizing some of its healthcare, and millions of Europeans are finding ways to opt-out of their government healthcare systems.
In Britain there are now over 6.5 million people who carry private insurance, despite the availability of “free” coverage from their NHS. Another 250,000 self-fund each year for acute private surgery, because they don’t want to or cannot afford to wait. Even the Labour party now favors privatization of healthcare in Britain.
In 2005 the Canadian Supreme court issued a ruling which stated, "The prohibition on obtaining private health insurance… is not constitutional where the public system fails to deliver reasonable services." Private healthcare clinics are now opening in Canada at the rate of one per week.
Isn’t it amazing that some of the same people who criticize government ineptness – including Katrina, the many screw-ups in the war on terror, No Child Left Behind, and more – actually think the government would do a good job managing the nation’s healthcare?
Freedom, choice, and innovation are what have given us the highest quality healthcare in the world. But we do need change. By encouraging consumer-driven solutions, competition, and price transparency, we can help avoid the healthcare disaster that government control would bring.
http://www.health--savings--accounts.com
Posted by Wiley Long at 10:19 AM | Comments (5)
July 14, 2007
Blue Cross Leading the Way for Health Savings Account Owners
Blue Cross Blue Shield of Tennessee is operating a pilot program that can tell Health Savings Account owners how much they will owe out of pocket before they talk to a doctor, have surgery or agree to have an X-ray.
"What drove this was convenience for the member," company spokesman Scott Wilson said. "It was inconvenient when you were at the doctor's office and you didn't know what you are going to encounter."
The pilot program is for members enrolled in Health Savings Account qualified plans.
The plans vary in design, but generally the member puts money into a pretax or tax deductible Health Savings Account for smaller medical expenses and has a more traditional health insurance policy to protect him in case of a major illness or accident.
The pilot program allows physicians' staff to use its Blue Cross billing program to find out before a patient visits how much it will cost out of pocket. The company expects the estimate will be processed in less than 10 seconds, said Paul Kulpa, senior program manager for HSA plans from Blue Cross Blue Shield of Tennessee.
As of this week, 24 health care providers' offices across the state and in North Georgia are participating in the Blue Cross pilot program, Mr. Wilson said. Blue Cross hopes to expand the service, he said.
Chattanooga Allergy Clinic, which has locations in Cleveland, Tenn.; Hixson; and on Lee Highway, participates. Patients can find out how much an office visit, allergy shots or test will cost before they see a doctor or agree to a procedure, business manager Kristie Tatum said.
"It helps us to be able to collect more at the window because of the high deductible, and it helps the patient because they don't always know how much their deductible is or how much is left," she said.
Enrollment in HSA plans has grown across the country since the first ones were introduced in 2001, said Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute, a nonprofit and nonpartisan think-tank based in Washington, D.C.
"In the better part of six years we've gone from zero to somewhere in the neighborhood of 6 million as of last year," he said.
Of the 1.2 million commercial Blue Cross members in Tennessee, 63,822 are in HSA plans, Mr. Wilson said.
Cigna is developing Health-e-Pass that includes the same kind of program that Blue Cross is piloting, company spokesman Joe Mondy said. The program is not available in Tennessee or Georgia, but the company hopes to expand it soon, he said.
Cigna wants to make a doctor's visit more like a retail shopping experience for its members so they will know what they're getting and what they owe, Mr. Mondy said.
He said the company is starting its pilot with its 500,000 HSA plan customers and hopes to expand to the rest of its 10 million members across the country.
Find information on Blue Cross Blue Shield in your state.
Posted by Wiley Long at 11:31 AM | Comments (0)
July 10, 2007
Humana Trying to Make Health Savings Account Costs Predictable in Michigan
Addressing the particular challenges faced by small businesses, Humana Inc. is introducing a series of new health insurance packages designed to alleviate the financial stresses of increasing health insurance costs. Dubbed "No Worry", these packages offer predictable health care expenses over a three-year period and plans that gradually transition passive health care users into informed and active health care consumers.
Available for businesses in Michigan with 51-99 employees, employers may select one of 35 three-year No Worry packages.
Each package presents a unique combination of predetermined health insurance plans for years one, two and three that provide actionable information and tools leading employees toward increased consumer engagement. For example, a No Worry package might include a traditional PPO plan in year one, Humana’s consumer-engaging CoverageFirst plan in year two, and a high deductible health plan compatible with a Health Savings Account in year three.
With No Worry, Humana guarantees the annual premium rate increase for medical insurance will not exceed 6 percent, well below industry cost trends, for the two subsequent years. Employers can qualify for an even lower 4.5 percent medical premium rate cap in the second and third years by adding dental coverage and meeting other requirements like having 90-percent of their employees complete a Humana Health Assessment.
No Worry was developed in response to feedback from small businesses and independent insurance agents and brokers.
“We asked small business owners what their key concerns were with respect to health benefits for their employees, and the same concepts resurfaced again and again,” said Denise Christy, president of Humana’s Michigan market. “They want predictability, a long-term solution to rising costs and a hassle-free process. We listened, and the result is No Worry.”
“Three-year contracts eliminate the need for benefit selection each year, saving small employers valuable time and energy. The rate increase cap ensures predictable health benefits costs, enabling more accurate budgeting and long-term financial planning for small businesses. We’re confident that Humana’s consumer-driven tools and programs encourage behavior changes that result in wiser health-care consumers and healthier, more productive employees, and our rate guarantee demonstrates that,” added Christy.
In addition, employers can add dental and/or life insurance to their No Worry package, and Humana will guarantee that the annual rate increase for dental will not exceed 2.9 percent in years two and three, and that there will be no annual rate increase for basic life insurance in the second and third years.
“Managing a small business is fraught with difficult decisions. Forgoing health benefits because they’re unaffordable is not an option any business wants to consider,” said John Crusse, director of small business sales for Humana’s Michigan market. “Humana’s No Worry program offers a long-term solution to this dilemma by holding down cost while still offering employees meaningful benefits and choice.”
Humana Inc. started quoting No Worry beginning July 1, 2007, for Michigan employers whose health plans take effect on September 1, 2007 or beyond.
Visit http://www.health--savings--accounts.com for more information on individual and family Health Saving Account plans.
Posted by Wiley Long at 09:12 AM | Comments (0)
July 05, 2007
Health Savings Account Growth Accelerating
Significant investments are being made today to implement Prepaid Health Savings Account cards that will provide significant benefits to cardholders and Third Party Administrators (TPAs). The most important of these is the inventory information approval system (IIAS) that will deliver auto-adjudication, significantly reducing administration costs for TPAs while eliminating the need to submit and file records by the Health Savings Account cardholder.
This report evaluates the size of the Health Savings Account market today and forecasts growth through 2011. It also offers a forecast of the number of Health Savings Accounts that will likely be candidates for HSA Prepaid cards. Not all Health Spending Accounts will be candidates for a Prepaid HSA card. For instance, many HSAs are under funded. Many have very low transaction rates because the owner perceives the HSA more as an investment account than for health spending. Both of these consumer behaviors will reduce deployment of Prepaid HSA cards.
"It is not just account holder behavior that will delay adoption of Prepaid HSA cards," states Tim Sloane, Director of the Debit Service at Mercator Advisory Group. "The broad acceptance of the inventory information approval system is also critical to the value proposition these cards deliver to TPAs. Every time a transaction is not adjudicated it reduces the cost savings the HSA depends on and frustrates the cardholder. It will be years before IIAS works for services rendered at hospitals or doctor's offices - and these account for 51.7% of all healthcare related expenditures according to the AMA."
Highlights of the report include:
- It is very likely that financial asset management firms will spend heavily to advertise the benefits of the HSA as an investment instrument, directly competing with banks for these account dollars.
- It is possible that the next presidential campaign will again focus on healthcare and that a new administration will legislate an entirely new environment - making all existing forecasts obsolete.
- While there are just over 1 million HSA accounts associated with a Prepaid HSA card today, this will increase to 6.5 million accounts in 2011 - a compound annual growth rate of just under 60 percent.
- Broad deployment of IIAS is an important assumption that is built into this forecast. Any additional delays or balkanization of the market into competing systems would significantly lower the forecast.
This report is 35 pages long and contains 13 exhibits, and tables.
Members of Mercator Advisory Group have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. You can visit them online at: http://www.mercatoradvisorygroup.com
Posted by Wiley Long at 11:39 AM | Comments (0)
July 02, 2007
Consumerism and Health Savings Accounts Driving Health Care Change
U.S. industry segments are coming together to increase the potential size and popularity of consumer directed health care, taking advantage of a huge reserve of money that could develop in the next 10 years, says Dean Halverson, CEO of the Leede Research Group.
For instance:
- Banks have begun offering health coverage as part of their insurance programs and are aggressively developing consumer models such as health savings accounts.
- The reverse is also occurring; health insurers such as United HealthCare and Blue Cross Blue Shield have gained bank charters to handle the growing number of HSAs.
- Retailers are also getting into the game, offering clinics and other more direct services.
- Wal-Mart recently announced it will offer clinics in as many as 2,000 of its stores; Walgreens and CVS Pharmacies have purchased national retail clinic chains.
One of the main drivers is convenience, says Halverson:
- In many markets, a mom who has a child with an ear infection, for example, can walk into a retail location and see a nurse practitioner without an appointment.
- They can get a diagnosis and leave with an eardrop prescription in as little as 15 minutes.
- They pay for this visit by credit card, generally for under $50, and often at their own expense.
The movement toward consumer models that better allow choice will continue to grow, says Halverson. Eventually, we will purchase health services as we do other services, based on what best fit our needs. In addition, as we move to a true consumer model, providers will be forced to make pricing available to consumers in a clear fashion. They will be judged on the value they provide, taking into consideration quality and cost.
Join the switch to consumer driven health care. Visit http://www.health--savings--accounts.com to get started!
Posted by Wiley Long at 09:51 AM | Comments (0)