Health Savings Account Blog

October 12, 2011

Health Savings Accounts Reformed Health Insurance

Since Health Savings Account (HSA) Plans became available in 2004, people have been using them to reshape what health insurance had to offer. From low-cost coverage to tax advantages, HSA Plans reformed health insurance.

Health savings accounts allow people to put money aside for future medical expenses and grow that balance with tax-free earnings. When HSA funds were needed to pay for qualified health care expenses, the withdrawals were also free from taxation.

Even greater savings were possible with the chance to reduce taxable income. Within government limits, Health Savings Account contributions can be taken as deductions to lower federal, and usually state, tax bills.

One of the most important benefits of HSA Plans is that contributions may be invested just like IRA contributions. The choices range from simple interest-bearing, liquid savings accounts to bonds, mutual funds or stocks. But, unlike IRA money, HSA balances aren't locked up until HSA owners turn 65.

Another important difference is that HSA owners aren't required to make mandatory withdrawals during retirement. To learn more about the greater control that HSA Plans offer before and after retirement, please see our online resources.

Posted by Wiley Long at 11:03 AM | Comments (0)

September 22, 2011

Are Health Savings Accounts Affected By Health Care Reform?

The Affordable Care Act has made major changes in health insurance and Health Savings Account Plans are no exemption. The trade association America’s Health Insurance Plans says that more than 11.4 million U.S. residents have HSA-eligible health insurance plans. That amounts to more than a 14-percent increase since last year.

Health care reform ended the option to buy over-the-counter drugs without a prescription using HSA funds. To do so now would result in a hefty 20-percent penalty on the withdrawal along with the need to pay taxes on that withdrawal.

On the other hand, health care reform mandates that high-deductible plans, including HSA-compatible plans, purchased after the Affordable Care Act became law must cover preventive services before the deductible has been met.

Little else has changed with respect to HSA Plans. HSA contributions can still be deducted from your taxable income. You don’t have to worry about the unspent money left in your HSA at the end of the year because it is carried over year after year. Once you turn 65, you can use HSA money for any purpose with no penalty, but you will have to pay taxes when you buy something other than qualified health care. You can learn about all the rules that apply to HSA Plans now with our online resources.

Learn more on our website at: http://www.health--savings--accounts.com

Posted by Wiley Long at 10:49 AM | Comments (0)

September 16, 2011

Are Health Savings Accounts Threatened By The Affordable Care Act?

Making consumers take a look at their health care expenditures is one way to curtail health care costs, and Health Savings Account (HSA)Plans can help.

Health Savings Accounts allow consumers to use a tax-advantaged account to pay for qualified medical expenses. A 2011 report by the trade association America’s Health Insurance Plans shows growing enthusiasm for Health Savings Accounts. But how has the Affordable Care Act impacted Health Savings Accounts?

One change to HSA Plans by the Affordable Care Act is that over-the-counter drugs like Advil can no longer be purchased with HSA funds without a prescription. This can be a big problem for people who need these low-cost options for long-term pain management.

An even bigger change in HSA Plans is that the high-deductible health plans that work with them must cover preventive care before the deductible has been met. That's only true for plans purchased after the Affordable Care Act became law, though. If you want to learn more about what HSA Plans offer now, our site offers news and educational resources about you Health Savings Account options.

Posted by Wiley Long at 08:47 AM | Comments (0)

May 16, 2011

Health Savings Accounts May Increase With Health Care Reform

Health Savings Accounts may start growing at a faster rate when most U.S. citizens are required to maintain minimum health insurance coverage. However, the Patient Protection and Affordable Care Act only directly addresses Health Savings Accounts with a couple of minor provisions.

Health Savings Accounts can only be combined with certain qualified high-deductible (and often low-premium) individual health insurance plans. Paul Fronstin, director at the Employee Benefit Research Institute (EBRI) says, "It's the only triple tax-advantaged plan out there." In addition to low premiums, Health Savings Accounts offer tax-free earnings and tax deductions.

The Affordable Care Act changed the penalty for using HSA withdrawals for non-qualifying expenses before age 65 from 10 percent to 20 percent. In addition, the act took over-the-counter (OTC) medicines off the list of health care that could be purchased through an HSA. OTC medication now only qualifies as an eligible HSA expense if your doctor will write you a prescription for it.

An EBRI survey showed $7.7 billion in Health Savings Accounts and Health Reimbursement Arrangements in 2010 being held in 5.7 million accounts. While total assets in such accounts have been increasing annually, the average balance per account has remained between $1,320 and $1,419 since 2007. The survey also showed that 37 percent of those who were eligible to open an HSA did not have one, either because they couldn't fund it or did not see a need for one.

Posted by Wiley Long at 11:49 AM | Comments (0)

May 10, 2011

What Do Health Savings Account Plans Mean For Preventive Care?

The American Journal of Managed Care published the largest assessment of Health Savings Account plans to date. The new RAND Corporation study showed that Health Savings Account plans significantly cut health spending and motivated patients to cut back on preventive health care.

With more than 800,000 families around the country participating, researchers found that shifting to Health Savings Account plans with deductibles of at least $1,000 correlated with an average drop in health spending of 14 percent compared to families who had health plans with lower deductibles.

At the same time, families that moved to high-deductible plans significantly cut back on preventive health care, included critically needed services. They cut back on cancer screenings and routine tests for diabetes, as well as childhood immunizations.

Amelia M. Haviland, a study co-author and a statistician at the nonprofit RAND research organization said, "This suggests people are cutting both necessary and unnecessary care."

High-deductible health plans have been on the increase in recent years. About 20 percent of U.S residents with employer-sponsored health coverage were enrolled in such plans by 2009. By 2010, a survey showed more than 54 percent of big employers offered one or more high-deductible health plan.

Haviland cautions, "We saw that patients reduced preventive care, and if this persists, it is possible to have health consequences in the future. These cutbacks could cause a spike in health care costs down the road if people end up sicker and need more-intensive treatment. However, there is no research or data to support such a spike in health care costs."

Posted by Wiley Long at 02:48 PM | Comments (0)

March 20, 2011

Health Savings Accounts Are The New Retirement Accounts

Health savings accounts are becoming the IRA of choice with escalating health care costs. These special accounts work with high-deductible health insurance plans to let you save with tax-free interest to pay for health care and take tax deductions for medical expenses.

Health savings accounts keep the tax-free interest IRA benefit and add tax deductions for contributions to the health savings account (HSA).

If you don't need HSA funds for health care, you can save the money for when you retire. Funds in this type of savings account roll over year after year. Some financial experts recommend to contribute the maximum allowed to an HSA before starting an IRA or Roth because you can withdraw money tax-free from an HSA to pay for qualified health care. On the other hand, you will not be able to spend HSA funds on anything other than health care until you turn 65.

Health savings accounts have benefits long before you retirement, though. 1) You can save for health care throughout your working years to help if you are unemployed or working where no health plan is available. 2) The health insurance plans that allow to start an HSA have lower premiums than plans with lower deductibles. 3) You can also save by reducing your taxes by taking the tax deduction available when you fund an HSA. Our online resources explain the pros and cons of these accounts and the high-deductible health insurance plans that work with them.

Posted by Wiley Long at 09:48 AM | Comments (0)

January 13, 2011

Growth For Health Savings Accounts

Health Savings Accounts have grown by $8.6 billion since the 2003 law that spawned them. In contrast, retirement accounts like 401(k)s held $2.4 trillion when 2008 ended. Industry experts predict that Health Savings Account (HSA) assets will grow by $50 billion to $100 billion.

Employees are becoming more familiar with them and companies are embracing high-deductible plans to reduce spending. Wells Fargo and JPMorgan Chase now manage most of the Health Savings Account assets, and Vanguard Group and Fidelity Investments hold $250 million worth of these HSA funds.

Health Savings Accounts are favored by the wealthy as additional tax breaks beyond 401(k)s. Thirty percent of HSA owners deposit the maximum contribution allowed. That was $3,050 for individuals and $6,150 for families in 2010. According to Fidelity vice president Will Applegate, "People equate the Health Savings Accounts to an IRA."

Tax breaks are less helpful to people with low- and middle-level incomes. The Government Accountability Office's 2008 study revealed that almost half of the people with qualified high-deductible health insurance plans did not open an HSA and many said they could not afford to do so.

Studies show that HSA owners seek less health care to avoid spending a lot out-of-pocket. It's feared that can allow medical problems to become more serious resulting in greater loss of life and more expensive medical treatment. That applies to high-deductible health insurance plans that cannot be combined with an HSA, as well. To see whether HSA plans will work you, visit us online at http://www.health--savings--accounts.com

Posted by Wiley Long at 11:39 AM | Comments (0)

December 30, 2010

Health Savings Accounts Emphasize Personal Ownership

Employers emphasize that combining a Health Savings Account (HSA) with a high-deductible health plan does more than help employers save on health care for employees. An HSA is a tool for retirement planning.

In Central Ohio, business owners want more people to utilize HSA Plans. These special forms of savings accounts can prevent some people from being forced to delay their retirement, according to Jay Savan. He's a St. Louis-based health consultant with the benefits firm of Towers Watson. Savan says, "We have trained people to view health care in 12-month increments. Our job is to turn renters into owners."

It's estimated that about 11.2 million people are already covered by account-based health plans. In addition, approximately 60 percent of large employers already offer or are planning to offer HSA Plans in the near future.

With an HSA, both the employer and employee may deposit funds in the HSA that can be withdrawn to cover qualified health care expenses. The remaining balance rolls over year after year and belongs to employees even when they leave the job.

Posted by Wiley Long at 10:34 AM | Comments (0)

December 27, 2010

Health Savings Accounts: Tools For Saving On Health Care

The need to save for health care has never been more urgent. Perhaps, that's why Health Savings Accounts are growing both in number of owners and in amounts deposited.

A Health Savings Account (an HSA)is a tool that people can use to save for future health care expenses. Even after retirement, the funds can still be utilized to pay for qualified health care expenses on a tax-free basis.

The advantages of an HSA are only available to those with a qualified high-deductible health plan (HDHP). This type of insurance is typically less expensive than full coverage plans, and the money saved on premiums can be invested in an HSA to cover expenses until the deductible is met.

HSA contributions remain the property of the account owner whether he leaves the job or retires. HSA owners also control how funds are invested to try to maximize their rate of return. Cash-back reward savings programs, money market accounts and certificates of deposit are among their options.

Posted by Wiley Long at 11:37 AM | Comments (0)

August 19, 2010

Health Savings Accounts: Can You Cut Your Healthcare Expenses With One?

Millions of Health Savings Account owners are trying to do just that. They have already deposited billions of dollars with the intent of covering their future medical expenses with tax-deductible dollars.

Why are Health Savings Accounts so attractive? You can invest tax-free money in a Health Savings Account and still control the type of investment. You can choose anything from savings accounts to a full brokerage house.

Unfortunately, there's less choice in healthcare itself. Policies in the U.S. still limit competition and make it difficult for consumers to comparison shop for doctors and hospitals. The answer is clearly to build more competition and empower consumers to drive down prices and increase access to and the quality of healthcare.

The growth of HSA plans has already helped to increase transparency and competition in the medical industry. Doctors are becoming more available by phone, medical kiosks are moving into malls, certain doctors with substantially lower rates now only accept cash payments and more doctors are competing for consumers’ healthcare dollars.

The market will respond as more and more consumers use health savings accounts to fund their medical care. Providers will begin to compete more by increasing quality and service that can benefit all consumers. You can stay up-to-date on the growing opportunities of HSA plans with the news updates on our website.

Posted by Wiley Long at 01:17 AM | Comments (0)

August 11, 2010

Health Savings Accounts See Increase in Popularity with New Healthcare Law

After a slow-down, Health Savings Accounts are rebounding in popularity after the passage of the new healthcare laws. "The number of requests for HSA proposals and requests for HSA information are up a lot for January enrollments from Fortune 500 groups," according to the president of HSA Bank, Kirk Hoewisch.

As President Obama was poised to sign healthcare reform into law, employers seemed to cautiously stall major health insurance decisions. Would Health Savings Accounts remain a part of U.S. healthcare?

"There is a consensus that Heath Savings Accounts will continue to exist," says Kunal Pandya. He's the senior analyst for health insurance and payments at Aite Group LLC in Boston. Regulators continue to redefine the rules for Health Savings Accounts as well as health insurance, but certain restrictions are already known, such as what are qualifying purchases for Health Savings Account fund withdrawals. It's also clear that in 2013, the minimum threshold to claim an itemized deduction for healthcare expenses will increase from 7.5 percent to 10 percent of adjusted gross income.

It's still possible that Health Savings Accounts will be rendered irrelevant sometime in the future, but many banks and financial institutions are looking for partnerships with health insurers to promote Health Savings Accounts for the time being. To stay up-to-date on the future of HSA Plans, HSA for America maintains extensive resources to aide in establishing Health Savings Accounts and daily news updates.

Posted by Wiley Long at 09:20 AM | Comments (0)

January 04, 2010

The ObamaCare Health Savings Account Promise – and Problems

By many accounts, the impending ObamaCare plan will be detrimental to the U.S. not only by adding trillions of dollars to the current healthcare entitlements, but also by reducing the level of healthcare innovation as the government takes over. However, despite the predicted setbacks of the ObamaCare plan, there is still hope for many Americans in the form of affordable and tax-friendly Health Savings Accounts.

Health Savings Accounts, which were created as part of the 2003 Medicare Modernization Act, represent some of the most innovative and consumer-friendly developments across the health-insurance industry to date. Not only do Health Savings Accounts provide financial resources for consumers, but they also encourage consumers to make smarter choices about their healthcare resources.

Health Savings Accounts are not only smart health insurance choices for many Americans; they are also becoming increasingly popular; since 2006, enrollment in Health Savings Accounts and their corresponding high deductible health care plans has increased by a whopping 3.2 million to 8 million.

While Health Savings Account critics argue that the programs cater to the wealth, data suggest otherwise. According to a May 2009 survey by AHIP, 53 percent of all individual Health Savings Accounts were under the age of 40. Moreover, a similar 2007 survey found that 33 percent of all individual Health Savings Account participants had been previously uninsured. In a study of more than one million Health Savings Account participants, AHIP learned that 46 percent of account holders resided in lower-middle income neighborhoods and earned between $25,000 and $50,000 per year. Total 83 percent of Health Savings Account holders lived in neighborhoods that had an average income at or below $75,000.

In a February 2009 study, the Manhattan Institute found that Health Savings Account participants used less than half of the funds that were available in their accounts in the year 2007. This figure indicates that Health Savings Accounts can serve as an effective savings vehicle that may even offset future healthcare costs.

However, the biggest draw of HSA plans is the low-cost health insurance plan that accompanies the Health Savings Account. The Manhattan Institute found that health insurance plans associated with HSA plans are ten to 40 percent less expensive than traditional health insurance plans. Moreover, 86 percent of these high deductible health insurance plans associated with Health Savings Accounts offer substantial "first-dollar" coverage, which goes towards preventive-care services, such as infant/child well care, colonoscopies, immunizations, mammograms, and pap smears.

Unfortunately, because of some of the details included in the new healthcare plan, Health Savings Accounts could be in jeopardy because of the definition of what constitutes a health insurance plan. The continuation of Health Savings Account plans may depend upon future regulators in terms of contributions by employers towards the “actuarial value” of contributions made by employers to Health Savings Accounts for employees. The actuarial value is the percentage of health-care costs insurance has to cover). In the current healthcare bill, the minimum actuarial value for a qualifying health insurance plan that can be sold through the new state health exchanges is 60 percent; in the House version, it’s 70 percent.

However, as long as these percentages hold and employer contributions continue to count towards the full actuarial value, Health Savings Accounts may survive and compete in new health exchanges. A 2009 report from the Congressional Research Service indicates that the typical actuarial value for an employer-based Health Savings Account is 76 percent, but may be 93 percent if the employer contribution is factored.

The current concern is that the language in the healthcare bill is vague. If the actuarial minimum increases and if employer contributions cease factoring into the full value, Health Savings Accounts may not meet minimum standards and could be banned in just a few hours of a decision.

Additionally, the new healthcare bill imposes very high medical-loss ratios. The House bill requires insurers to spend 85 cents of every dollar collected paying out claims. The Senate bill has a cap of 20 percent for the group market and 25 percent for the individual market on non-claims related costs. If HSA-eligible health insurance plans have to contribute more money towards claims in order to meet these minimums, these plans may be much more expensive and, therefore, less attractive to policyholders.

To that, add additional proposed regulations that may easily kill Health Savings Accounts, many of which are invisible to consumers until it’s too late.

Despite it all, the health care bill may unintentionally drive massive Health Savings Account enrollment. Both versions of the health care bill mandate that the uninsured enroll in health insurance plans (often with government subsidies), and create health insurance plan exchanges where they can compare and shop for plans easily. For many of the uninsured, Health Savings Accounts would be the best low-cost option, which could potentially save them thousands of dollars in premium costs each year. The result of such a mass enrollment would be a boon for HSA-qualified plans, as long as they are not regulated away.

“Millions of Americans would end up choosing their own health plan rather than having their employer choose it for them,” said Roy Ramthun, an architect of Health Savings Account program during the 2003 legislation. “When people see what their health insurance actually costs, instead of having the cost hidden from view, I believe more of them will choose an HSA plan because it will provide better value for their premium.”

Of course, the current language of the health care bill needs to be amended so that it is clearer. Any legislation that weakens Health Savings Accounts will ultimately result in increasing health care costs, causing millions of Americans to lose their Health Savings Accounts, and moreover, millions more could end up paying higher insurance premiums for health insurance coverage that they neither want nor need.

Posted by Wiley Long at 10:34 AM | Comments (0)

December 28, 2009

Senate Health Bill Threatens the End of Health Savings Accounts

Many healthcare experts worry that the proposed Senate healthcare bill that was recently revealed by Harry Reid will reduce the quality of medical care while costing the nation trillions of dollars, pushing the nation further into debt. The new bill will cost $1.2 on the outside; however, critics contend that when the "accounting gimmicks" are removed, the 2,074-page bill will have an actual hard cost closer to $2.5 trillion.

Critics believe that this new bill will be damaging to a nation already strapped by debt and a struggling healthcare system. In particular, many are concerned that the bill will damage Health Savings Account plans that give consumers more control over their healthcare choices and dollars. Here’s why:

Health Savings Accounts are available through many employers as pre-tax savings accounts into which employees can deposit money that they can earmark to pay for qualifying medical expenses. Health Savings Accounts accompany high deductible health HSA insurance plans that have low monthly premiums and maximum annual out-of-pocket expense amounts for participants.

The Reid bill is designed to assert more governmental control over Health Savings Accounts. According to some critics, Health Savings Accounts will be “barred from the insurance ‘exchanges’ that will demolish and supplant today's individual market.” Moreover, say the critics, once the government has the power to "define the essential health benefits" that should be offered as part of all plans, employers will lose control over what benefits they can and can’t offer to employees.

The Democrat’s argument against Health Savings Accounts is that Health Savings Account participants aren’t contributing as much money to a generalized health insurance pool that all can benefit from. As such, participants of Health Savings Account programs will not be engaging in as much risk sharing as participants in more traditional health insurance programs that come with high monthly premiums.

Consider, though, the demographics of people who participate in Health Savings Account programs; Approximately 40% of tax filers with who have Health Savings Accounts earn less than $60,000 per year, according to the IRS. According to the Employee Benefit Research Institute, 4% of adults with private insurance have a Health Savings Account for 2009, which is up from just 1% in 2006. About 9% of those adults receive their Health Savings Accounts as part of a consumer-directed health plan through their employers. Moreover, Health Savings Account beneficiaries are evenly split between those with health problems and those without major health problems.

According to the Blue Cross Blue Shield HSA Association – an organization with a high percentage of members enrolled in Health Savings Account programs - says that Health Savings Account participants are more likely to be better healthcare consumers than individuals with traditional health insurance.

As such, Health Savings Account beneficiaries are more likely to track expenses (63% to 43%), put money away for the future (47% to 18%), and research information about the quality of healthcare providers before scheduling a visit (20% to 14%). Health Savings Account beneficiaries are also more likely to participate in wellness programs, such as weight loss, fitness, and smoking cessation programs. After all, Health Savings Account participants have invested their own financial resources into their healthcare management and they want to get the most from their investment.

According to media executive David Goldhill in an article he wrote for Atlantic Monthly, if a 22-year-old starts at his company today earning $30,000 and health costs grow at 3%, by the time he retires he'll have paid out $1.77 million in healthcare premiums, earned lower wages, paid more for out-of-pocket costs and contributed to both sides of the Medicare payroll tax.

However, if that 22 year-old were to invest his healthcare money into a Health Savings Account, he would not only save a significant amount of money each month off of the cost of healthcare premiums, but he would also be able to grow his savings account for future healthcare expenses, and receive a tax benefit for his savings. "And wouldn't you consume health care differently if you and your family didn't have to spend that money only on care?" asked Goldhill.

However, opponents of the Reid bill argue that liberals fear Americans having more control over their healthcare expenses because it would result in diminished governmental and political control. The Reid bill creates an environment where it is impossible for people to choose their own healthcare plans and options.

Still, the Reid healthcare bill is seemingly being pushed through the Senate at an alarming speed, even though the public opposes the bill, President Obama’s approval rating has tanked to only 44%, and business and healthcare providers are growing increasingly concerned over the consequences of the impending healthcare reform. It seems, critics argue, that even in the face of so much opposition and disgruntlement, the government seems not to care; the healthcare bill appears to some to be more about control than creating a solid healthcare plan that will benefit America for the long-run.

Posted by Wiley Long at 08:34 AM | Comments (0)

December 13, 2009

Health Savings Accounts Offered Through Employer Consumer Driven Health Plans Are On the Rise

According to a new survey by Aon Consulting and the International Society of Certified Employee Benefit Specialists, more employers are offering Consumer Driven Health Plans (CDHPs) with Health Savings Accounts than ever before. Consumer Driven Health Plans have been available since 2000 and are popular health insurance options for employers who want to help their employees have more control over their healthcare expenses than is allowed by traditional insurance plans.

Of the 370 organizations who participated in the survey, 44% of currently offer Consumer Driven Health Plans to their employees. Comparatively, only 28% of respondents to a similar 2006 survey offered Consumer Driven Health Plans. Also, 63% of employers have more than 10% of their employees participating in a CDHP – a percentage that is similar to last year’s survey results, but higher than three years ago when 53% of employers had more 10% of employees enrolled in a CDHP.

With a Consumer Driven Health Plan, employers offer a high deductible HSA insurance plan that is either coupled with an employer-sponsored tax-deductible Health Savings Account, Health Reimbursement Arrangement, or both. Of the 44% of respondents currently offering Consumer Driven Health Plans, 56% are offering Health Savings Accounts, 35% are offering Health Reimbursement Arrangements model, and 9% are offering both the Health Savings Account and the Health Reimbursement Arrangement with the high deductible insurance.

Health Savings Accounts are becoming increasingly popular amongst both employers and employees across the country. Since 2006, Health Savings Account participation has increased from 48% to 56%. Health Reimbursement Arrangements, on the other hand, are becoming increasingly less popular; in the past year, Health Reimbursement Arrangement participation has fallen from 43% to 35%, according to the Aon Consulting joint survey.

“HSAs have grown in popularity relative to HRAs since HSAs are considered more advantageous to the employee than an HRA,” said John Zern, U.S. health and benefits practice director for Aon Consulting. Zern noted that Health Savings Accounts tend to appeal to a greater number of employees because of the increased control employees have with them; employees not only contribute their own money to their Health Savings Accounts so they own their plans, but they can take their plans with them when they change jobs. Moreover, Health Savings Accounts offer many tax advantages, he said.
 
“Although only 17% of employers offer a total replacement CDH program, we expect that number to increase next year,” said Bill Sharon, national consumer-driven health care practice leader with Aon Consulting. “In response to the economic downturn and double digit health care cost increases, employers are becoming more aggressive in managing their health care costs. Implementing a total replacement CDH program is one of the leading health care strategies available to employers.”

According to the Aon Consulting survey, a startling 83% of employers offer optional Health Savings Accounts or Health Reimbursement Arrangements to their employees. The 17% of employers who do not offer these plans have implemented a total replacement CDH program CDHPs are the only plans available for employees.

Many employees who participate in Health Savings Account and Health Reimbursement Arrangement plans also receive contributions from their employers. 66% of survey participants contribute money to their employee’s Health Savings Account plans - up from 60% last year alone. Employers offering Health Reimbursement Arrangements say they plan make contributions to their accounts; 4% will contribute less than $300; 11% will contribute $300 to $499; 49% will provide contribute $500 to $799; 1% will contribute between $800 to $999; and 34% will contribute $1,000 or more.

Amongst employers who offer a CDHP, their reasons for offering the healthcare solutions have not changed much since last year; 38% offer CDHP plans to help control health-plan costs, 35% are attempting to introduce their employees to “consumer engagement” that will help them purchase the right healthcare solutions for their long-term needs, 14% have introduced CDHP to expand employee choices, 9% are trying to encourage better use of health care services, and 3% are helping their employees to have a vehicle for medical expenses they may face in retirement.

Of the 56% of survey participants who are not currently offering a CDHP to their employees, 37% say they plan to offer one. Of the employers who plan to offer a CDHP, 6% plan to offer one this year or next; 31% are undecided as to when they will offer one, and 62% say they are not seriously considering offering a CDHP.

Posted by Wiley Long at 10:37 AM | Comments (0)

December 01, 2009

What Will The Senate Health Care Bill Do To Health Savings Accounts

Senators like to tell us how their bill will help the free market. They say the "public option" or government run plan would just be another choice on healthcare to compete with other insurance plans. They say the government-run health care exchanges will make it easier for individuals and employers to choose the best health care plans.

But the reality is quite different. The Senate health care bill would severely limit choice. And in one key area, it limits choice on Health Savings Accounts which allow individuals and families to save their money tax free and use it for their healthcare.

The Reid bill in the Senate assaults Health Savings Accounts which allow individuals to accumulate tax-free funds for future medical expenses when coupled with low-premium, high-deductible HSA insurance plan. The Reid bill changes tax provisions to make Health Savings Accounts less attractive, but the real threat comes via increased regulation.

HSA insurance plans will likely be barred from the insurance “exchanges” that will demolish and supplant today’s individual market. Employers will also find them more difficult if not illegal to offer once the government has new powers to “define the essential health benefits” that all plans must eventually offer. Plans that focus mainly on catastrophic health expenses, instead of routine procedures, aren’t generous enough for Democrats.

Health Savings Accounts enhance choice. Citizens can choose the insurance plans to couple with their Health Savings Account and customize them to cover what they need. They can then use the money they put into their tax-sheltered Health Savings Account to cover a lot of HSA qualified expenses that normal health insurance plans don’t cover... like vision, dental, or Orthodontics.

What’s more, with an HSA people are essentially spending their own money. Meaning that they’ll be more frugal in seeking care, something that will in turn drive down health care prices through competition.

If we really wanted to introduce more choice into health care, if we really wanted to drive down prices, then enhancing things like Health Savings Accounts is what we should be doing. Not hamstringing them.

But that’s presuming that those pushing this health care bill really want you to have more choice in health care. Which, sadly, they do not.

Posted by Wiley Long at 05:23 PM | Comments (0)

November 27, 2009

Health Savings Accounts Continue to Gain in Popularity as Healthcare Debate Rages On

While the nation's lawmakers debate possible ways to improve the health care system, a national consumer organization reports that thousands of Americans apparently believe they've already found an answer: Health Savings Accounts.

A Health Savings Account is a lot like an IRA. The money you put into your Health Savings Account provides an above-the-line tax deduction, reducing your adjusted gross income and thereby reducing your tax burden each year.

explains Vicki Rolens, managing director of the Federation of American Consumers and Travelers (FACT).

There is one main difference between an IRA and a Health Savings Account (HSA): With an HSA, you are allowed to make tax-free withdrawals at any time to meet medical expenses that your health insurance doesn't cover.

In a bulletin to its members, entitled "How a Health Savings Account Can Save You Money and Simplify Your Life," the Federation of American Consumers and Travelers (FACT) briefly outlines HSA basics:

1. The consumer purchases a high-deductible health insurance plan (HDHP), which costs less -- often far less -- than a "conventional" health plan.

2. Part or all of the money saved on premiums -- and saved on taxes -- can then go into a tax-free Health Savings Account. The Health Savings Account belongs to the consumer, not the insurance company.

3 If a health issue arises, the consumer uses his or her HSA to pay any qualified expenses which the high-deductible plan doesn't cover. The money is withdrawn tax-free.

4. In general, "qualified" expenses include dental bills, over-the-counter medicines, prescription drugs, eye care, hearing aids, and many other health-related items and services that the HDHP doesn't pay.

5. All money remaining in the Health Savings Account at retirement can be used to meet Medicare deductibles, long term care expenses, et al, or can simply be withdrawn -- without penalty if the consumer is over the age of 65.

6. In 2010, an individual will be able to contribute up to $3,050 tax-free ... $6,150 for a family. The HSA can be opened in addition to any IRA the consumer may already have.

"The basic concept is simple," says Vicki Rolens, managing director of FACT. "You save money by having a higher health insurance deductible than usual, and you put that savings in a tax-free Health Savings Account to meet medical expenses if and as needed."

"In essence, you pay a portion of your health-care budget to yourself instead of an insurance company, and you gain some distinct tax advantages in the process."

To qualify as an HDHP, a health plan's deductible amount must be at least $1,200 for an individual plan or $2,400 for family coverage.

Rolens points out that an HSA plan may not be right for everybody, and she recommends that anyone who's interested consult with his or her insurance expert or financial planner.

FACT is a consumer organization, formed under the not-for-profit corporation laws of the District of Columbia in 1984. It currently serves more than 1 million consumers nationwide. Additional information on FACT may be found in the Encyclopedia of Associations, and by visiting the association's Web site (www.usafact.org).

Posted by Wiley Long at 10:49 AM | Comments (0)

November 03, 2009

How Healthcare Bills Will Impact Health Savings Accounts

Congress will soon vote on health care reform legislation that could harm the more than 8 million Americans who have a Health Savings Account (HSA) and restrict those who want to purchase HSA coverage in the future.

Starting this week, the House of Representatives will begin debate on the Affordable Health Care for America Act, and the Senate is expected to finish work on its version of health care reform shortly.

Both the House and Senate bills make major changes that would impact people with Health Savings Accounts:

- Both bills mandate benefit levels for most health plans that could eliminate Health Savings Accounts as an option.

- Both bills prohibit you from using any money in your Health Savings Accounts to buy over-the-counter drugs such as allergy medications that you now get without a prescription.

- The Senate bill may place a tax on high-value health plans, so-called "Cadillac" plans, by taxing the cost of such coverage, including employer contributions to your HSA.

- Both bills raise the penalty for the use of HSA dollars for non-qualified HSA medical expenses from 10% to 20% of the reimbursement.

It is important that you take the time to contact your members of Congress and let them know that you depend on your HSA for affordable coverage and the flexibility to set aside tax-free dollars to pay for your health care expenses.

Enter your zip code and find contact information for your member of Congress.

When contacting your member of Congress, here are some things to keep in mind:

- Over 8 million Americans currently have coverage through Health Savings Accounts – people should be able to keep the coverage they currently have.

- Going forward, people should be able to choose what works best for them – including the right to pick a health savings account that allows them to decide how best to spend their health care dollars.

- Employers that offer Health Savings Accounts should be allowed to continue to provide these benefits to their employees.

Thank you for your involvement and support. We need health reform that protects people with Health Savings Accounts. HSA for America will continue to keep you informed about issues relating to Health Savings Accounts.

Posted by Wiley Long at 06:08 PM | Comments (0)

November 01, 2009

Health Savings Accounts and Obamacare

Health Savings Accounts could very well be the answer to our current healthcare mess. They are tax-exempt accounts which allow employees and employers to contribute thousands of dollars annually toward paying for health expenses. In conjunction with high-deductible health insurance, most people much less in premiums than a regular insurance option. Often, an employer will save enough to pay the deductible amount into the Health Savings Account, and still be able to cover the high-deductible health insurance plan's premium.

In other words, if all Americans got Health Savings Accounts overnight, we would immediately begin saving about one-third of our health care spending, and would instead put that money away for when we need it most. The results...

This would increase family savings (a good thing) and would drastically lower the cost of healthcare for everyday Americans (an essential thing). Additionally, Health Savings Accounts bring price transparency as well, since all health care costs—up to the high deductible amount have to be bought by the consumer, not the insurer, again encouraging shopping around, competition, higher quality, more innovation, and lower prices.

Unfortunately, Health Savings Accounts and HSA Plans are also under the gun in the house bill released: Health Savings Accounts will have to shoulder a medicine cabinet tax. That means while you used to be able to buy over-the-counter medicines with tax-free account money, you’ll now only be able to use after-tax dollars. The bill raises the additional tax on non-qualified withdrawals from a Health Savings Account (raising the tax from 10% to 20%). Health Savings Accounts will effectively be killed by a final provision, which requires that most plans provide first-dollar coverage for most services.

So, while Health Savings Accounts could save the system, our government is instead trying to kill them without thought of consequence. Pelosicare would destroy one of the best aspects of the current system.

Posted by Wiley Long at 11:12 AM | Comments (0)

October 13, 2009

Health Savings Accounts Are Helping To Lower Healthcare Costs

Two business executives have suggested what we have been saying all along, that Health Savings Accounts along with High Deductible Health Plans would help reduce the effects of rising health care costs.

Tom Kennedy from J.F. Brennan Co. marine construction and Tom Brock from Altra Federal Credit Union said their firms have seen positive results with Health Savings Accounts. The two spoke at a forum sponsored by the Coulee Area Regional Employers, or CARE, Health Action Cooperative.

About 20 percent of companies nationally had switched to Health Savings Accounts by 2005, up from only 5 percent in 2003, according to the Kaiser Family Foundation.

Brock said Altra made the switch in 2007. Under Altra's HSA plan, the company contributes $292 a month to each participating employee's Health Savings Account.

Unlike the current flexible spending plans, Brock said, there is no "use it or lose it" characteristic with a Health Savings Account, in which all the employee-contributed money must be spent by year's end.

Instead, employees can amass up to $5,950 a year.

Altra has a $6,000 family plan deductible. Once the deductible is reached, those in the plan then pay 20 percent of care costs up to a total of $10,000, after which the plan pays the full cost of care.

While the high deductible can be a shock for those not used to such plans, it's "not enough to create financial hardship for the family," Brock said.

And the Health Savings Account gives employees more flexibility, he said.

Healthy employees who do not have any costs for the year "are rewarded with a growing Health Savings Account," Brock said.

Altra has 240 employees locally, and 134 use the Altra health benefits. Of those, 74 percent have more than $1,000 in their accounts, 44 percent have more than $2,000, and 11 percent have more than $5,000, Brock said.

Claims for the first six months of 2009 are 40 percent less than the first six months of 2008, he said, adding that Altra's 2008 costs were virtually the same as in 2005, despite 10 more employees in the plan.

Kennedy noted similar experience at Brennan.

Critics of HSA plans point to the high costs, along with sometimes more paperwork.

High deductible health insurance plans might encourage consumers to skip basic and preventive care if companies don't offer incentives for those services, said Larry McNeely, federal health care advocate for the U.S. Public Interest Research Group, in a telephone interview from Washington, D.C.

"It's great that companies are doing wellness and having incentives to get preventive health care," he said. "But that doesn't mean HSA plans don't create an obstacle for going to the doctor when you need to go to the doctor."

Posted by Wiley Long at 10:35 AM | Comments (0)

October 01, 2009

Healthcare Reform Needs Health Savings Accounts

Health care reform is currently the #1 topic in America today. Many solutions have been offered to solve our healthcare problems. The President thinks a single-payer system would be best, but details have been sketchy and the outcome is in doubt.

A single-payer system would be risky because the government would hold all the money and remain vulnerable to political manipulation and bureaucratic inefficiency. We've seen this in Medicare and Medicaid.

The best system would be a well regulated "Everybody Hold Your Own Money and Pay Your Own Way System," which could be accomplished with Health Savings Accounts.

Health Savings Accounts would empower patients to deal directly with their caregivers without third-party interference or regulation and lead them to become sensitive to the potential benefit and the cost of their care.

Health Savings Accounts could be funded with pre-tax money from regular automatic savings, like payroll deductions, and everyone should have one from birth. Children’s Health Savings Accounts should be funded by their parents. In only a couple of years, normally healthy people would save enough to stay ahead of their health care expenses. They would save the same money they now pay in insurance premiums, so once in place, the new system would cost less because no money would go to insurance company administration and profit, and unnecessary procedures and tests would decrease because people would keep the money they didn’t spend.

When any Health Savings Account becomes large enough to cover anticipated needs, the extra money could be rolled over into a retirement account, or child’s Health Savings Account. At death, a person’s Health Savings Account could be rolled over to heir’s Health Savings Account, after an inheritance tax which would be used to fund Health Savings Accounts for the poor and unhealthy. Everyone would keep the money they didn’t spend, so they would not spend it unnecessarily.

Government’s role would become only regulatory. A commission might be needed to determine a fair market value for services and patented drugs, but it is likely that market forces would control these and make the mix of available services more appropriate to people’s needs.

To insure that Health Savings Account money was spent on effective care, and not wasted or stolen by fraud, standards of medical practice should be established with a Wikipedia-style online system to allow each licensed practitioner and researcher to propose, amend and vote on standards of practice in their field. A true consensus statement would then be available on every relevant standard of practice, which would be more up to date and represent truly effective practice, better than the opinions of a panel of “experts.”

The quality of evidence on any issue varies from one study to the next, and leaves room for differences in opinion about what is good treatment. Health Savings Accounts should be allowed to pay for all procedures which received an overwhelming vote of approval, and not for those with overwhelming disapproval. The more money in an account, the lower a procedure’s vote would need to be to have it included. The list of approved procedures would change, and its quality would improve as fast as new evidence and experience accumulated.

Regulations should also end patents for new drugs which do the same thing as established drugs, as well as new preparations of established drugs. Advertising of prescription drugs should end because it leads to unrealistic expectations and misdiagnosis. And these regulations should require saved money to be invested conservatively.

Posted by Wiley Long at 03:56 PM | Comments (0)

September 29, 2009

Health Savings Accounts Can Help Reform

Health Savings Accounts have been a huge success since their inception in 2004. Health Savings Accounts have attracted millions of Americans in the past five years since Congress (Republicans and Democrats) made them available. An estimated 46 million people are without health insurance, but 18 million earn at least $50,000 a year and choose not to participate because of what they consider excessive premiums. For an enhanced system to work, everyone must pay something. So how do you "force" individuals to be part of an insurance group that covers procedures they don't need or want based on their age or gender?

One solution to this "all-in" dilemma is greater use of Health Savings Accounts. Money placed in Health Savings Accounts is protected if not used for medical expenses, can grow tax-free and is transferable to other health care plans or Medicare. Health Savings Accounts are among the broad variety of insurance products we sell our clients. Based on our experience, Health Savings Accounts are used by working individuals on all income levels, are cheaper by 22.5 percent than a traditional family health insurance plans and are extremely valuable to those who get sick or have pre-existing conditions. Once you reach a deductible level in a Health Savings Account, there are no co-pays on prescriptions, doctor visits, hospital procedures or testing.

Congress faces heavy lifting to make health care coverage portable and affordable, and not break the taxpayer. Health Savings Accounts can be meaningful in that outcome.

Learn more about Health Savings Accounts and get instant quotes on HSA insurance at HSA for America.

Posted by Wiley Long at 11:39 AM | Comments (0)

September 23, 2009

Health Savings Accounts - Why Not Make Them Larger!

Creating "Large" Health Savings Accounts would be a step in the right direction to reduce government control over the U.S. health care sector.

Currently, the government exempts employer-sponsored insurance (ESI) from payroll taxes and income, which seems like a tax cut. But it operates more like a tax increase because it strips workers of control over their earnings. It also drives up health insurance premiums.

Large Health Savings Accounts would replace the tax exclusion for ESI with an exclusion for money contributed to a Large Health Savings Account, which the worker would own.

The same tax exclusion would be available to all workers, regardless of where or whether they purchase health insurance.

Altering the tax exclusion that way would force employers to shift the money they now use to purchase health benefits – on average almost $4,000 for individuals and $9,000 for families – into workers’ cash wages. Individuals could then contribute, say, up to $8,000 annually to a Large Health Savings Account. Families could contribute up to $16,000.

Workers could use those funds to purchase medical care and health insurance, from any source, tax-free. For example, they could hand the money right back to their employer and stay on the company plan. Anything the worker doesn’t spend grows tax-free.

Large Health Savings Accounts have a number of advantages over other tax-based health care reform proposals, including Sen. John McCain’s proposal to provide tax credits for health insurance. Large Health Savings Accounts would eliminate the tax code’s influence over consumers’ health care decisions to a greater extent, and with fewer economic and political downsides, than Sen. McCain’s tax-credit.

One downside of McCain’s tax credit proposal, as well as other reform proposals, is that they discriminate against the uninsurable. A tax break for health insurance is only valuable if you can obtain health insurance. Tying a tax break to insurance automatically excludes a lot of very sick people. In contrast, Large Health Savings Accounts offer the same tax break to the uninsurable, who arguably need it most.

Learn more about HSA plans at HSA for America.

Posted by Wiley Long at 11:07 AM | Comments (0)

September 10, 2009

The Health Savings Account Solution To Our Health Care Crisis

The current level of spending and growth in health care cost will soon bankrupt our nation. Reform is needed, but any reform must guarantee that patients have access to the treatment they need, when they need it, with the doctor they choose, at a price that is transparent, affordable, and covered.

That is exactly what the Patient-Controlled Healthcare Protection bill does. For people currently on Medicare, Medicaid, SCHIP or any combination, they will for the first time ever gain complete control and complete coverage through high deductible insurance with a personalized Health Savings Account (HSA) to cover the entire deductible.

The structure of the plan leaves health care decisions between patients and their doctors while getting both government and insurance autocrats out of the way. Like many people, I currently have an Health Savings Account, but the insurance company has far too much control over health care decisions and the doctors I use. Insurance companies long ago got out of the business of insuring and into the business of micro-managing health care decisions. Insurance was originally intended to insure against potential catastrophic illness or accident and normally required a small premium to protect against such unknowable future events.

It is time to put insurers back in the business of insuring, and that is what the Patient-Controlled Healthcare Protection will do. An updated version of the plan expected to be introduced this week also ensures that our most vulnerable and needy citizens are protected and covered.

Under the bill, everyone eligible for Medicare, Medicaid, SCHIP or any combination has the option each year of having the federal government purchase private insurance with a high deductible, while also funding cash into a Health Savings Account that covers the deductible. For any household containing one person currently covered by one of the government healthcare programs, that person will receive $2,500 deposited into an individual Health Savings Account under their control, while any household containing more than one covered under these programs will be provided with $3,500 deposited into their household Health Savings Account.

The Health Savings Account will be accessed by a debit card coded so that it may only be used for health care purchases. Additionally, the bill provides incentives for employers to provide exactly the same kind of coverage for their employees. Employers may provide pretax contributions to employees for deposit and use in a Health Savings Account of the employee's choice as well as for a catastrophic health insurance plan. Such contributions and purchases are business expenses to the employer and non-taxable to the employee. The self-employed have the same opportunity and advantage. The bill also mandates that policies will be owned by the employee, making the policy fully portable wherever and whenever an employee were to go.

Also, there is no more using or losing the amount in the Health Savings Account by the end of the year. Any unused amounts remain in the account, allowing it to grow. And there are no limits on the pretax amounts that may be put into such Health Savings Accounts. To help make insurance policies more competitive, insurance companies licensed to do business in the United States may offer policies across state lines, which has long been called for by Rep. John Shadegg (R-Ariz.).

For some conservatives, the new alternative to the government programs may seem like another government giveaway, but it will actually cost less than what is currently being spent to cover Medicare, Medicaid, and SCHIP. Even further savings for the government should come from the fact that most young people in their twenties and thirties can accumulate major amounts of cash in their Health Savings Accounts by the time the reach Medicare eligible age. This should eventually lead to fewer and fewer people even needing or wanting government assistance.

It all puts the country on a correction course to actually save increasing amounts each year, all while giving patients the control and coverage we have long desired. In order to increase accessibility to the desirable new form of Health Savings Account, two or more individuals living in the same household may establish a Health Savings Account for their household simply by signing an agreement regarding how the Health Savings Account will be divided should someone leave the household. It should also be noted that once money is paid into the Health Savings Account, it may only be used for healthcare purposes, though it may be gifted to the Health Savings Accounts of children, relatives or heirs with no tax consequence.

When the amount in the Health Savings Account exceeds the deductible, the owner may choose to raise the deductible or even invest it in order to earn interest or premiums from reliable sources such as government bonds. A separate type of federal inflation-proof Treasury bond may be created specifically for such an investment, thereby guaranteeing that as long as the United States exists, so does your healthcare savings. To encourage seniors to avoid spending the account on unnecessary healthcare, ten percent of any excess of the government-provided annual Health Savings Account amount may be withdrawn at the end of the year tax-free.

This plan provides patients both choices and security like never before, allowing the selection of the doctor of you choose without an insurance company telling you a physician is not on your plan. Additionally, the bill puts an end to “gatekeepers” who get to tell you whether or not you may visit a particular specialist. If you want to go directly to a dermatologist for a skin problem, that’s where you go. If you want to see an orthopedic specialist for a bone problem, that is who you see. Doctors will be free to diagnose, advise, and treat in consultation with patients without having to consult the government or insurance company to see if giving you what the doctor thinks you need meets bureaucratic approval.

TRANSPARENCY of health care costs is another critical component of this bill. Health care providers must provide a list of charges for procedures, treatments, or expenses to any potential patient, as well as the prices that are charged to other entities. Free market principles should prevent a government from telling doctors or hospitals what to charge, but they also require that everyone gets to know exactly what a health care provider charges so the patients make informed decisions to get the best value for the best treatment. This will bring to light the actual price of health care paid by insurance companies, which is only a fraction of the obscure and exponentially inflated prices we see.

This plan also prohibits insurance companies from cherry-picking only the healthiest and least risky Americans and denying those who need health care most. There would be no cancellations for pre-existing conditions or problems that arise. There will be some necessary cost-sharing aspect in order for this requirement to be met. But it is time to make that the kind of coverage we have.

Another problem of great concern is that terrorist cells have reportedly discerned that they can simply send pregnant women to the United States on travel visas just in time to have babies. One lady recently bragged to a member of Congress sitting by her on a plane from Newark to the Middle East (not knowing who he was) that another grandchild would be born in the United States by the end of August as their daughter would visit America right before the baby was born. She also mentioned during the long flight that her husband and her son-in-law were both members of Hamas. She explained how nice it was to bring children into their family who are American citizens. She added that the best part was that her daughter could fly back to their country and not even have to pay anything.

For the sake of our national and financial security, this cannot continue. Because the risk of excessive health care costs bankrupting our country is not acceptable, it is a matter of national security that our system not be overwhelmed by immigrants receiving taxpayer-funded care. Therefore, anyone seeking to travel or immigrate to the United States must provide proof that they will have full health care coverage while here. Such coverage may be through a sponsoring employer or a resident in whose household the immigrant intends to reside. Otherwise, a visa will not be granted. If health care coverage ceases while the migrant is here, then the visa does too.

Employers needing migrant workers could set up their own migrant worker coverage or households could allow an incoming immigrant coverage under their plan, but there must be coverage. We do believe in following the rule of law which currently requires that anyone needing healthcare must have it provided, regardless of legal status, so we follow the law and provide the care.

For the sake of this nation's survival and progress, we cannot afford a government-takeover of healthcare -- especially when there is a much simpler, more viable option. It is imperative that we seek true health care reform that puts the patient first by protecting your vital relationship with your physician.

The Patient-Controlled Healthcare Protection Plan will create a fiscally responsible, genuinely patient-centered approach to health care, which is what Americans expect, demand, and deserve. It eliminates the obstacles between you and your doctor. No insurance company, HMO, or government bureaucrat will have the power to tell you whether you can receive health care. This plan gives patients complete control and complete coverage that is affordable and accessible. Medicine will once again be about the patient's needs and the doctor's diagnosis, with true competition like we haven’t had in a very long time, if ever.

Posted by Wiley Long at 10:46 AM | Comments (0)

August 18, 2009

Health Savings Account Modifications Likely To Be Minor Under Healthcare Reform

As reported on INSIDE CONSUMER-DIRECTED CARE, a newsletter with timely news and insightful analysis of benefit design, contracts, market strategies and financial results, modifications to Health Savings Accounts are likely to minor at best under any new healthcare reform bill.

Despite cries of alarm being circulated by various Health Savings Account interest groups, health reform observers interviewed by ICDC say that any modifications to Health Savings Accounts targeted by legislators would likely be minor. And some provisions under consideration could actually drive the more widespread adoption of HSA-qualified plans.

To date, the reform proposals voted out of the House and Senate committees have either not addressed Health Savings Accounts or proposed only minor changes. The version of the America’s Affordable Health Choices Act (AAHCA) voted out by the House Energy and Commerce Committee July 31 made no mention of Health Savings Accounts. An amendment sponsored by Rep. Michael Rogers (R-Mich.) would have clarified that Health Savings Accounts were qualified health benefits plans that could be offered through the proposed health insurance exchange. But the amendment was defeated. The House Ways and Means Committee, however, suggested in its version that health accounts (Health Savings Accounts as well as Health Reimbursement Arrangements and Flexible Spending Accounts) could no longer be used to pay for over-the-counter medicines.

The version of the AAHCA voted out of the Senate Health, Education, Labor & Pensions Committee made no mention of Health Savings Accounts. The Senate Finance Committee plans to approve its long-delayed and yet-unseen reform bill by Sept. 9. The committee on May 19 released a list of reform savings and revenue options that included limiting HSA contributions and increasing the additional tax on distributions from Health Savings Accounts that are not used for HSA qualified medical expenses.

Greg Scandlen, director of Consumers for Health Care Choices, contends that “Health Savings Accounts are too deeply entrenched in the market” at this point to be seriously jeopardized, and employers are adopting HSA plans [with Health Savings Accounts] at an increasingly rapid rate.

Red Gillen, senior analyst and HSA watcher at Boston-based financial research and consulting firm Celent, tells ICDC that another reason why Health Savings Accounts will most likely survive is that some members of Congress have said that all Americans should have the same coverage they have. While this is unlikely because of the coverage’s rich benefit design, he points out that “federal employees do have the choice of an HSA option.” He also notes that the days of comprehensive health plans in their current form are numbered because they are too expensive. “Plans with $10 copays are definitely going the way of the buggy whip,” he says.

Jay Savan, a St. Louis-based Towers Perrin consultant, contends that the adoption of account-based health plans, in particular Health Savings Accounts, will accelerate as a result of many of the mandates in the House and Senate proposals.

“A requirement that all Americans acquire health coverage would likely drive substantial interest in relatively low-cost, high-deductible health plans (HDHPs),” Savan tells ICDC. And interest in HDHPs “may be strongest among those individuals and families who qualify for federal premium subsidies.” HDHPs also would be attractive to employers under the requirements that they offer a minimum-value health plan. A tax cap on employer-provided health benefits, he suggests, would drive interest in HDHPs in order not to breach the cap. And while the impact of a guaranteed-issue requirement in the insured market is yet to be defined, Savan speculates that “it may have an inflationary effect on premiums, in general, as carriers seek to counteract the impact of unregulated morbidity on their books of business.” But to the extent that premium levels are impacted, either broadly or with a focus on higher-value/higher-premium coverage, “it is reasonable to expect a migration into lower-premium plans, such as HDHPs,” Savan says.

Some HSA Rules Could Change

While Health Savings Accounts are not likely to disappear, the rules governing them could change. “There is discussion of a return to the original account contribution limits stipulated at [HSA] enactment that called for a maximum annual contribution equal to the lesser of the HDHP deductible or the statutory account contribution limit,“ Randall Abbott, a Boston-based Watson Wyatt consultant, tells ICDC. There could also be increased penalties for HSA withdrawals when the funds are not used for qualified health-related expenses, he says. And while substantiation now is not required, “it is possible that it could be required at the time of distribution. If unsubstantiated, the amount would be immediately included in taxable income.”

Abbott cautions that “Washington watchers know better than to bet on the outcome of emerging debates.” But he asserts that even if HSA plans and/or Health Savings Accounts are affected by changes under reform, none of the changes should be viewed as roadblocks by employers or health plans. “Change is inevitable,” he says, adding that “the degree of change remains to be seen.”

Notably absent from the debate is the role HSA plans with Health Savings Accounts could play in meeting the stated goals of health reform. “Still lost in the discussion is the growing evidence that Health Savings Accounts and other HSA plan solutions are proving effective at doing exactly what advocates had predicted they would do: safely control health care costs while preserving quality of care,” James G. Knight, M.D., tells ICDC. Knight is CEO of Consumer Directed Health Care, Inc. “The current political machinations seem to be ignoring the success of Health Savings Accounts and HSA plans.”

William Giaconia, vice president in charge of consumer-driven products at CIGNA, agrees, noting that “HSA plans are all about affordability and quality, which are the keys to expanding access, improving health and reducing costs.” He says that “well-designed HSA plans that are benefits neutral and reduce, not shift, costs are proven to provide affordable health care coverage without restricting choice or compromising quality.”

Some of the key ingredients of HSA plans have made their way into the current reform proposals, however. For example, the House proposal includes preventive care services with no cost sharing under its list of essential benefits, reflecting the first-dollar coverage benefit typically found with HSA plans. And the proposal also would impose out-of-pocket limits on catastrophic coverage, similar to limits found in HSA plans.

Read more about the Healthcare Reform debate on our special Healthcare Debate Blog.

Posted by Wiley Long at 11:47 AM | Comments (0)

July 13, 2009

Healthcare Reform Needs to Include Health Savings Accounts

For all those Americans looking to give less money to health insurers and put more money in their pockets, a Health Savings Account (HSA) is the plan for you. You pay a lower premium, and put the extra cash that would have been going to an insurer in a tax-free savings account that you own. You get to spend the money tax-free to meet your health insurance deductible. Health Savings Accounts grew by 31 percent in 2008 and currently over 8 million Americans now have an HSA.

In a recent poll, over three quarters of HSA owners said they would recommend getting a Health Savings Accounts to their friends and families.

84 percent of HSA owners say more Americans should be able to have access to Health Savings Accounts.

91 percent say Health Savings Accounts should remain an option for all Americans.

80 percent of those surveyed said the ability to save for future health care expenses is the primary reason for using a Health Savings Account.

For those who do not believe Medicare will be in the same shape it is in now, mainly because of the baby-boomers who are beginning to hit the system, then perhaps sending less cash to insurers and keeping some of it for your future health care expenses is a good idea.

It turns out those with an HSA use more preventative care than those with traditional plans, and among men the increase in the utilization of preventative care is three times of that among women. Men appear to respond better to a financial incentive, as opposed to being told, reminded (dare I say, nagged?) to go to the doctor.

When it is in their financial interest, men will go — i.e., if I don’t get whatever the issue is handled now, I will pay more later.

In addition, about 2.5 million of the 8 million people who became insured with an HSA last year, were uninsured — so Health Savings Accounts are helping to solve that problem too.

The average age of an HSA health insurance policy holder is 45 years old, and the majority of those with an HSA are families. Companies like Whole Foods, Wendy’s, Microsoft, Boeing, Target and Best Buy offer Health Savings Accounts, and millions people who work in small companies have an HSA. Three quarters of employers who offer Health Savings Accounts give their employees half of their deductible in cash in their HSA accounts. HSA owners get a lower premium, and cash for their account. According to the Kaiser Family Foundation, the average employer contribution to the employees family plan HSA is $2,068 every year. Employees also spend less for their health premium share because the cost of a family HSA is $3,886 dollars less than a traditional PPO plan.

Unions also have Health Savings Accounts. The printers at the Boston Globe, owned no less by the New York Times, have an HSA. The Boston Globe contributes $2,000 to an individual or family HSA. The individual’s deductible is $1,500 and the family deductible is $3,000. The city of Dayton in Ohio has an HSA for all its employees. Individuals get $1,500 deposited into their account, with a $2,000 deductible, and families get $2,000 in their account with a $3,000 deductible.

Once the money goes into your HSA, regardless of its source, you own it. It stays in your account year after year, until you spend it. It is not the employers money, it is yours. If you leave your job, your money goes with you.

And when you spend your own money, you are more judicious when you consume health care. 85% of the savings to employers who switched to an HSA were from a reduction in the amount of health care consumed.

For example, a woman who twisted her knee by stepping off a curb went to the doctor who said I cannot tell if you have torn your ACL or not. He gave her three options, he could cut into her knee and put a scope in and find out exactly what was wrong, or he could order her an MRI or she could ice it for three days, and see how it is after three days.

With an HSA, she asked, how much would the scope and the MRI cost? The scope was $2,300, the MRI was $900. She chose the couch. Her knee after ice and elevation, it turns out, healed perfectly. If it didn’t, she would be back at the doctor’s office, since pain is a motivator to go to see the doctor.

The woman wrote me and said, if I had had traditional insurance I would have asked for the scope and MRI just to get some value out of my high monthly premiums, and I would not have even cared or asked or known how much it would have cost.

Health Savings Accounts improve everyone’s understanding of health care costs, including the doctor’s, and with an HSA the patient and doctor are the ones making the decision about the course of care together, with cost as one of the factors weighed in the decision.

President Obama has said if you like your current health care plan, under his reforms, you can keep it.

Well, HSA owners like their plans. Now it is time for President Obama to keep up his end of his campaign promise.

Learn more about what a Health Savings Account and an HSA Insurance Plans can do for you at HSA for America.

Posted by Wiley Long at 10:55 AM | Comments (0)

July 01, 2009

Health Savings Accounts are a Better Reform Option

If we are to review of the history of health care in this country since the U.S. government's entry when Lydon Johnson signed into law Medicare and Medicaid, we find disturbing trends. The unconstrained, growth in size and shameful increases in cost and liability have crippled the system putting both in danger of collapse. And yet, we the people have allowed our improvident government to further politicize private health care, further exacerbating cost to every component within the system.

Many questions remain about how to solve our health insurance crisis in this country, but Health Savings Accounts have already proved to have a positive effect on health care.

Has an attempt to overhaul the health care system included an analyzed study of the current delivery on a state-by-state, city-by-city basis? How will the 170 million individuals with health insurance be impacted by a potential public overhaul and subsequent offering? Why are 46 million Americans without health insurance? Are they eligible for private insurance? Estimates have concluded 11 million of the 46 million uninsured are eligible for Medicare.

Increases in health care spending are decreasing, reaching single-digit percentages over the past three years. The smallest increase of 6 percent occurred during 2008. For profit, nonprofit and charitable entities manage and control revenues and expenses by design and per the tax code.

The proposed public solution accomplishes neither while adding uncontrollable inefficiencies and waste to the newly rationed care. This option is formed without natural propensities and incentives aimed at quality and innovation. The Congressional Budget Office projects the proposed public option will reduce the uninsured total by only a third at an expense of $107,000 per uninsured ($1.6 trillion/15 million uninsured), utilizing a 2007 government estimate of 46 million Americans uninsured under the age of 65.

Decisions made by physicians and participating insurance companies are shaped to hedge against liability versus serving the need and care of the patient. Malpractice statutes contort patient care, extending well beyond physician advertencies and controlled processes.

Permanent and portable individually owned Health Savings Accounts will provide and empower the individual with choice. Health Savings Account (HSA) purchase vouchers will extend affordability and equal access to care for the poor.

This solution is the only remedy enabling the health care industry to advance the practice, treatment and discovery of new innovations in the fight against and management of human disease.

Learn more about Health Savings Accounts at HSA for America.

Posted by Wiley Long at 11:24 AM | Comments (0)

June 28, 2009

Attack on Health Savings Accounts

Some lawmakers want national health-care reform to include new constraints on health savings accounts, a move that banks and insurance companies warn could discourage saving at a time when it is needed more than ever.

Proposals in the Senate would set tighter limits on contributions to Health Savings Accounts, and would require more oversight of how money in them is spent. Annual contribution limits for 2009 are $3,000 for individuals and $5,950 for families. One proposal would reduce these limits to the deductible amount of the Health Savings Account owner's health insurance plan, if that deductible is less than the set limits.

Money from Health Savings Accounts can pay for current year health-care expenses, such as copays and deductibles. Unlike the more widely used flexible spending accounts, which must be emptied each year, Health Savings Accounts can also be used to save for future years to cover Medicare premiums and other health costs on a tax-free basis.

To qualify for an HSA, investors need to be enrolled in a high deductible health insurance plan that meets certain levels. In 2009, those include a deductible of at least $1,150 for individual coverage or $2,300 for a family.

“Implementing the suggested policy changes would simply cripple one of the few health-care reforms that are accomplishing the president’s stated goals” of expanding health coverage to the uninsured, says Kevin McKechnie, staff director of the American Bankers Association’s HSA Council, which represents banks, insurance companies and their technology providers.

Around a third of people who have Health Savings Accounts were previously uninsured, he says. McKechnie has sent a letter to Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), both of the Senate Finance Committee, detailing the industry’s concerns.

Launched around five years ago, Health Savings Accounts were the cornerstone of the Bush administration’s policy for making health care more affordable for American families. Democrats resisted the introduction of Health Savings Accounts, describing them as an “unnecessary $16 billion subsidy” for the wealthy – a criticism they renewed last year after a report by Congressional investigators revealed that the adjusted gross income for enrollees in Health Savings Accounts was about $139,000, compared with $57,000 for all other tax filers. President Barack Obama has said he wants to pay for health-care reform in part by raising taxes on the wealthy.

Financial advisers say using Health Savings Accounts to save for future years, while paying for current costs out of pocket, can be an astute way to save for medical expenses in retirement.

“We should be encouraging people to save more (not less) for their future health-care expenses,” says Roy Ramthun, president of HSA Consulting Services and a former senior health policy adviser to President George W. Bush. Ramthun is opposed to lower limits on account contributions. A couple retiring now with Medicare coverage will need about $240,000 to cover medical expenses during retirement, he says, citing a recent estimate from Fidelity Investments.

Another proposal would require employers or independent third parties to verify that account holders are spending funds on qualified medical expenses.

“Such a requirement would be a dramatic departure from current law and greatly increase the cost of HSA administration,” says McKechnie. It would also lead to substantially higher account fees, he says.

Currently, account holders, trustees and custodians are required to report annual contributions and distributions from Health Savings Accounts to the Internal Revenue Service. If the IRS decides to do an audit, it’s the responsibility of the account holder to prove, by showing receipts, that he or she used the money for medical expenses, or face tax penalties.

If fraud is the driving concern, a study should be conducted first to assess its prevalence before new rules that would raise costs are introduced, says McKechnie.

If you own a Health Savings Account, we urge you to contact your congress representative and tell them to stop this attach on Health Savings Accounts.

Posted by Wiley Long at 10:43 PM | Comments (0)

June 25, 2009

Health Savings Accounts a Viable Option

House Democrats finally unveiled their long-awaited 852-page health care "reform" legislation that engineers a government takeover of medicine. The bill is a staggeringly expensive bureaucratic nightmare that Democrats will try to defend in a series of hearings that have already begun.

As details of this leviathan bill begin to emerge, what is becoming increasingly clear is this plan, if passed, will cost American jobs.

Democrats would use the cost of a business’ annual payroll to define whether or not a small business is subject to a new eight percent federal tax. Only those with less than 10 employees on average would be spared the onerous new tax. Subjecting these small businesses who employ 47.3 million people and provide $1.7 trillion in wages annually to the Democrats’ new tax will place these jobs and wages at risk.

Additional employer mandates that will require some small businesses to offer employee coverage would cost another 4.7 million jobs according to a model from the President’s own economic advisors.

The House Democrats’ plan also places mandates on every individual American citizen to buy health insurance or pay a hefty penalty to Washington equal to almost two percent of their annual income. Of course, if you can’t afford to pay for the coverage, you would be forced into the government-run system that will make health care more expensive and ration care based on age, cost and survivability rates. The government system also puts bureaucrats in charge of medical decisions, like putting the DMV in charge of your medical decisions.

Rep. Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, has admitted that their health care plan would be financed by raising taxes. There have been reports of a whole slew of new taxes on individuals being considered, from a national sales tax to additional taxes on cigarettes, new taxes on sodas, and raising taxes on everyone making more than $200,000 a year.

According to a Lewin Group study published earlier this year, a similar Democrat plan would force more than 100 million Americans out of their current health coverage and into the government system. The Congressional Budget Office issued a report last week on the similar plan authored by Senate Democrats that would force at least 23 million people out of their private health care coverage. According to news reports, even the White House has admitted that statements made by the President promising you can keep your current health care coverage if you like it shouldn’t be taken literally.

Rep. John Boehner (R-Ohio), the House Republican leader, talked Friday about the Democrat plan.

“This plan is nothing less than a government takeover of health care, and families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” Boehner said. “Raising taxes, rationing care, and empowering government bureaucrats -- not patients and doctors -- to make key medical decisions is not ‘reform.’ This plan will make health care more expensive, reduce the quality of care for millions of families and small businesses, cost American jobs, and force untold millions of Americans off their current plans and into a government-run nightmare operated by federal bureaucrats.”

House Ways and Means Committee ranking Republican Dave Camp of Michigan expressed concerns about the cost of this undertaking.

“The Democrats are refusing to reveal the price tag of this bill or how they will pay for it, but it is obvious it will cost well over a trillion dollars,” Camp said. “We will certainly need to examine the details, but I fear this plan will force tens of millions of Americans to lose their current health care coverage and put the federal government in charge of determining what doctors and treatments are available to patients. Those dangers will be magnified by the hundreds of billions of dollars in hidden tax increases that could cause millions more Americans to lose their jobs.”

“Americans need a real bipartisan solution on health care -- this bill isn’t,” Camp added. “The sooner Democrats invite us to sit down together, not just as Republicans and Democrats, but as Americans, the sooner we can craft a commonsense solution that will make health care more affordable, accessible and available for all Americans.”

Gohmert Introduces Health Savings Accounts Health Care Plan

Rep. Louie Gohmert (R-Texas), the man who brought you the Tax Holiday stimulus plan, has a fresh, innovative health care plan that centers on health savings accounts that give individuals control over health care spending.

(Gohmert’s “tax holiday” alternative to Obama’s stimulus plan would have simply excused Americans from paying taxes for most of the year. It would have worked -- at far greater speed and lower cost -- than Obama’s failed stimulus package.)

Every American citizen would maintain a personal, family, household or employer-provided Health Savings Account (HSA), all contributions from pre-tax dollars. Rather than filtering money through “premiums, profits and taxes first,” patients would spend the money directly from their own HSA. There is no limit on how much pre-tax money could be put into this health savings account. This would work in conjunction with a catastrophic insurance policy that is adjustable as the HSA grows over years and even generations. These Health Savings Accounts would roll over each year and would also be an asset that would be passed on to your family or designee.

Any amount over $3,000 could also be invested in a manner that would “include stable, inflation-protected federal treasury bonds so that your investment can have added growth. A separate type of federal Treasury bond may be created in other legislation specifically for such investment. That way, as long as there is a United States, your healthcare savings will be there for you when you need it.”

Each person would be issued a debit card to access the funding. These cards would be coded and could only be used for health care purchases. No hassles or paperwork.

“We are rolling out a new health care plan because the plans we’ve seen so far have involved too much government and too much insurance company involvement, which has been a big part of our problem,” Gohmert said at the announcement. “If you liked my Tax Holiday Plan, you’re going to love this one. This plan will give every American the treatment that they need, when they need it, with the doctor of their choosing and at a price that is affordable.”

You can read the plan online here.

Posted by Wiley Long at 10:00 AM | Comments (0)

June 01, 2009

Health Savings Accounts Spell Health Insurance Relief

Your employer may have switched to a high-deductible plan in an attempt to keep soaring health insurance costs in check. The cost of care is pass to you until you reach your deductible, but the premiums are much lower. Along with the high-deductible plan, you can open a Health Savings Account that allows you to contribute pre-tax dollars to the Health Savings account where it can be invested and grow until needed to pay for medical care.

Unlike a Flexible Savings Account offered by many employers, the money in an Health Savings Account can be rolled over from year to year and even remain under your control if you lose or switch your job.

Whenever you need to pay for medical care, the money can be withdrawn your Health Savings Account (HSA) and used tax free to pay your medical bills. The money can even be used to pay for long-term health insurance.

There are limits to annual contributions to an HSA. For 2009 the limit is $3,000 for individuals and $5,950 for a family. If you are over age 55, you can contribute an additional $1,000.

Not all health plans qualify for an HSA. For 2009 the deductible must be at least $1,150 for individuals or $2,300 for a family. The annual out-of-pocket expenses (deductible and co-pays) can’t exceed $5,800 for an individual or $11,600 for a family. You won’t qualify if you are age 65 or older or if you are covered by any other health plan that is not a qualified high-deductible plan.

Check with your benefits administrator at work to see if your company offers an HSA-eligible plan. If you are self employed or currently out of work, visit our HSA for America website to learn more about Health Savings Accounts and what they can do for you.

You can also watch our HSA video presentation to learn more about Health Savings Accounts.

Posted by Wiley Long at 12:53 PM | Comments (0)

April 05, 2009

Health Savings Accounts Are The Best Investment Vehicle Today

Investing for the future is something we all need to do. We need to save and invest for our future. One of the best investments today is opening a Health Savings Account.

The biggest reason why Health Savings Accounts are considered to be a good investment, is that you will have full control of where to invest your money. You can decide to invest your money in stocks, mutual funds, bonds, or any investment channel that you think your money will earn more. You get to have the bank of your choice acting as your Health Savings Account administrator.

Health Savings Accounts are often regarded as a second retirement investment. One of the attractions about this type of account, as an investment, is that the funds that you put into it are permitted to grow minus the taxes that are often associated with other investment schemes. This little trick will help you to earn a better return with on your money.

Another benefit that you can get from investing in your Health Savings Account (HSA), is that you can use the funds to pay for your medical expenses. You can also pay your health care premiums using your Health Savings Account. There are health expenses that your health care insurance, like Medicare, will not be able to cover for you, but your Health Savings Account will assume.

Health Savings Accounts are your best tool to build up your funds necessary to shoulder the rising cost of health care; once you retire from your full time employment. This is the only account where you can withdraw money practically tax-free to cover your medical costs.

The amount that you can earn from your HSA is dependent on the following factors:

1. Amount of your annual contributions.
2. Length of time that you have contributed.
3. Your investment return.
4. Length of time before you withdraw funds from your account.

You can always get the most out of your Health Savings Account as follows: (1) you can take the risk and invest the funds into high yielding investment vehicles such as the stock market, and the likes; (2) do not make any withdrawals from your Health Savings Account for as long as possible; (3) deposit the maximum amount of money you can make at the start of each year.

In a capsule, to increase your ROI on your Health Savings Account is to fund it annually, preferably at the start of the year, put the money to work wisely and delay any withdrawals.

Learn more about Health Savings Accounts at HSA for America.

Posted by Wiley Long at 10:23 AM | Comments (0)

March 13, 2009

Health Savings Accounts Will Revolutionize American Health Care

The idea behind Health Savings Accounts is quite simple: Individuals should be able to manage some of their own health care dollars through savings accounts they own and control. They should be able to use these funds to pay expenses not paid by third-party insurance, including the cost of out-of-network doctors and diagnostic tests. They should be able to profit from being wise consumers of medical care by having Health Savings Account balances grow tax free and eventually be available for non-medical purchases.

By creating a Level Playing Field for Individual Self Insurance, Health Savings Accounts are designed to help correct a major flaw in tax law that distorts our entire health care system.

Every dollar an employer pays for employee health insurance premiums avoids income and payroll taxes. For a middle-income employee, this generous tax subsidy means that government is effectively paying for almost half the cost of the health insurance. On the other hand, the government taxes away almost half of every dollar employers put into savings accounts for employees to pay their medical expenses directly. The result is a tax law that lavishly subsidizes third-party insurance and severely penalizes individual self-insurance. This encourages people to use third-party bureaucracies to pay every medical bill, even though it often makes more sense for patients to manage discretionary expenses themselves.

The current law, part of the recently enacted Medicare prescription drug bill, gives deposits to Health Savings Accounts the same tax advantages formerly granted only to health insurance premiums. Employer and employee deposits to Health Savings Accounts will avoid all federal income and payroll taxes. When combined with individually owned insurance, HSA deposits will be a deductible expense, even for income tax filers who do not itemize.

Making Choices

Advances in medical science have reached a point where we can probably spend the entire gross domestic product on health care - in useful ways! The Cooper Clinic in Dallas now offers a super-duper checkup (with a full body scan) for about $2,500 or more. If everyone in America took advantage of this opportunity, we would increase our nation's annual health care bill by one-half. There are more than 900 diagnostic tests that can be done on blood alone, and one doesn't need too much imagination to justify, say, $5,000 worth of tests each year. But if everyone did that we would double the nation's health care spending. So how do we decide which procedures are worthwhile and which are not?

There are basically only three ways. In other developed countries, these decisions are made either directly or indirectly by government. But government-imposed rationing is arbitrary, inefficient, unfair and probably unacceptable to most Americans. The second method is to restrain spending using managed care techniques. But during the 1990s voters expressed discomfort with having employers and large insurers ration their health care. The third option is to allow individuals to make their own choices between health care and other uses of money, through a vehicle such as Health Savings Accounts.

Restoring the Doctor-Patient Relationship

Patients will make better choices if they can rely on doctors who put their interests first. In a managed care world, doctors too often look to employers and insurers for guidance in deciding how to practice medicine. In a very real sense, providers view insurers rather than patients as their customers. With Health Savings Accounts, however, physicians will be free to act as the agents of their patients.

Expanding Options

Since 1996, a pilot program has made Medical Savings Accounts available to small businesses and the self-employed. But because of the many restrictions, only about 70,000 people have these accounts. A U.S. Treasury Department ruling in 2002 allowed large companies to establish Health Reimbursement Arrangements, and at last count, 1.5 million employees had enrolled. But these accounts are also unreasonably restricted. Flexible Spending Accounts offer consumers the chance to withhold funds tax free for medical care. But these have a use-it-or-lose-it feature which requires employees to forfeit unused funds to employers at the end of the year. This forfeiture provision encourages employees to waste money on unnecessary care and makes most people apprehensive about depositing money except when they can precisely predict their future medical needs.

How Health Savings Accounts Work

Health Savings Accounts are the most flexible, consumer-friendly accounts yet devised. They allow individuals and employers to make deposits each year equal to their health insurance deductible. The health insurance policy that accompanies an HSA must have an overall deductible of at least $1,150 for an individual or $2,300 for a family policy. A typical plan will work like this: When individuals enter the medical marketplace, they will spend first from their HSA. Once they reach their deductible, insurance pays all remaining costs.

Annual HSA deposits cannot exceed the amount of the health insurance deductible, and in 2009 cannot exceed $3,000 for individuals and $5,950 for families. However, the account balances can earn interest or be invested in stocks or mutual funds, and they will grow tax free. Thus a young person could accumulate hundreds of thousands of dollars by the time he or she retires.

Health Savings Account balances belong to the individual account holders and remain theirs if they switch jobs, become unemployed or retire. The funds can be used to pay expenses not covered by insurance, insurance premiums while unemployed and health expenses during retirement. In the event of death, Health Savings Accounts may be bequeathed to a spouse, or (like an IRA) the funds may flow to other heirs.

Conclusion

The concept of Health Savings Accounts is not conservative or liberal. It's an empowerment idea. It should appeal to liberals who want an alternative to HMO rationing. It should appeal to conservatives who want an alternative to government rationing. It should appeal to everyone who suspects that impersonal bureaucracies care less about us than we care about ourselves.

Learn more about Health Savings Accounts at HSA for America.

Posted by Wiley Long at 08:25 AM | Comments (0)

December 29, 2008

Using a Health Savings Account to Lower Your Health Insurance Premiums

Health insurance premiums can really put a strain on your budget if you are among the millions of Americans who have to pay for their own coverage. Rates this year alone are expected to increase by at least 8%. With rising premiums and the expensive cost of health care staring you in the face, what can you do to keep your premium at an affordable premium without compromising quality? Using a Health Savings Accounts is a great way to start.

Here are six ways you can lower your health insurance costs while still protecting yourself and your family:

1. Hire a health insurance agent. There are many independent health insurance brokers from all over the country, but you should only work with an agency that specializes in Health Savings Accounts. Why? The premium is the same whether you use a broker or deal directly with the carrier. Your broker interacts with the carriers in your area on a daily basis and will be better able to serve you and assist you with any claims issues. Also, as your broker we represent you, not the carrier so we will be ready to help you compare all the plans available in your market to help you make the right choice.

2. Choose a Health Savings Account (HSA). The purpose of any insurance plan including health insurance is to limit your exposure to financial risk. Health Savings Accounts accomplish this at a reasonable cost and it works like this. You pay for expenses at a discounted rate until you reach your deductible. Once the deductible is reached, your carrier will pay 100% of all claims. In exchange for a premium that is up to 50% less expensive that other plans, you accept responsibility for your medical expenses until the deductible is reached. We were recently able to save a client nearly $1,000 a month on his premium by moving him from a traditional plan to an HSA plan.

3. Choose a Higher Deductible. Most people are spoiled by having very low deductibles on their employer paid plan. However, the lower the deductible, the higher the premium. If you are young, the premium will be low even with a low deductible, but those of us who are older should choose a deductible of at least $2,500. A plan for a family of 4 where the husband and wife are both 35 years old could cost $680 a month while an HSA would cost only $250 a month. The savings clearly makes up for the higher deductible, especially if you don’t see the doctor very often.

4. Eliminate the Copayment. Sure, it is only $20 or $30 for you to see a doctor, but the cost of a plan with a low copayment and a low deductible can break the bank. You only pay the contracted rate any way so the copayment doesn’t really save you any money. A 35 year old husband and wife with two children would lower their premium from $430 a month to $280 a month. If you are not constantly running to the doctor, the $1,800 annual savings could be a huge financial boon to you.

5. Shop and Compare. Not only are there many different major carriers across the country but each carrier offers a multitude of different plans. The premium can vary widely from carrier to carrier so make sure you compare price and benefits before you make a decision. That’s where your independent agent can really help you with one stop shopping and comparing rates and programs for you.

6. Review your policy annually. Why? Carriers often come out with new plans every year so it is wise to have your agent keep you informed. Since the new plan will have no record of claims, it is often much less expensive than an older plan that has been on the market for awhile. Simply staying informed of new developments in the health insurance market can save you 30% or more in premium dollars. Here at HSA for America, we offer our Annual Comprehensive Policy Review for all our clients.

Learn more about Health Savings Accounts and how they can help you lower your health insurance premiums at: http://www.health--savings--accounts.com

Posted by Wiley Long at 05:18 PM | Comments (0)

August 23, 2008

Use of Health Savings Accounts up 35 Percent

The number of Americans with insurance plans tied to Health Savings Accounts has passed the 6 million mark, according to America's Health Insurance Plans. Health Savings Accounts are tax-favored, individually owned savings accounts that can be used to pay for medical expenses in conjunction with a high-deductible insurance plan. About 6.1 million Americans were covered through Health Savings Account qualified health insurance plans in January 2008, up 35 percent over the same period a year earlier, according to AHIP, a trade association representing insurers. HSA plans have been in existence since January 2004.

About 30 percent of individuals covered by HSA plans worked for small businesses, 45 percent worked for large employers, and 25 percent bought insurance in the individual market. The small-group market is the fastest-growing segment for Health Savings Accounts. The AHIP survey found that Healt Savings Accounts are helping more Americans afford health insurance. HSA plans accounted for 31 percent of new coverage in the small-group market over the past year, and 27 percent of new coverage in the individual market.

The average deductible for the best-selling HSA plans in the small-group market was $2,244 for single coverage and $4,356 for family coverage, according to AHIP.

Average annual out-of-pocket limits were $3,462 for single coverage and $6,690 for family coverage.

Annual premiums averaged $3,189 for single coverage and $8,125 for family coverage.

"The increasing popularity of Health Savings Accounts is a result of managed care's failure," said John Goodman, president of the National Center for Policy Analysis, a Dallas-based public policy research organization. "The best way to control health care costs is to put patients in control of more of their health care dollars."

Critics of Health Savings Accounts, however, pointed to another study. The Government Accountability Office found that taxpayers with Health Savings Accounts in 2005 were, on average, more than twice as wealthy as other taxpayers. Contributions to Health Savings Accounts were more than twice as high as withdrawals. "Health Savings Accounts clearly are attractive to higher-income people who are looking for tax shelters," said Rep. Henry Waxman (D-Calif.). "But they aren't the answer for providing adequate health insurance coverage for the average American. This report provides further evidence that we need to re-examine whether this is the right way to use the government's resources to address our health care needs."

The House recently passed legislation that would require HSA administrators to substantiate that withdrawals from the accounts were used for allowable medical expenses. Republicans who opposed this provision said it was designed to undermine Health Savings Accounts by adding unnecessary administrative burdens. "Democrats should stop trying to dismantle this coverage option," said Rep. Charles Boustany (R-La.). "These accounts help cover the uninsured and lower health costs with preventive care, lower-cost medicines and fewer visits to emergency rooms."

The HSA studies are available at www.ahipresearch.org and www.gao.gov

Posted by Wiley Long at 01:45 PM | Comments (0)

April 21, 2008

Getting Healthy Through Health Savings Accounts

A small Edina, MN company is finding its niche in the fledgling market for Health Savings Accounts, betting people soon will start investing more and more excess funds in their accounts.

Remjeske heads a small Edina, MN investment house called Devenir that's staking its future on Health Savings Accounts (HSAs).

Created by Congress in 2003 as a way for people who had high-deductible health plans to accumulate pretax dollars for medical expenses, Health Savings Accounts are slowly but surely gaining popularity, with about 6 million Americans enrolled this year.

As the balances in these accounts grow, Remjeske is betting that people will want to start investing some of it in mutual funds.

It's a controversial idea. If you're putting money aside in case you get sick, should you be gambling with it?

And especially in a volatile stock market like today's? Some financial advisers say no, especially for those who don't have a lot socked away. But proponents say that, for those who are affluent enough to build up tens of thousands in medical funds, investing some of it can be a way to make more money while reaping tax advantages.

Building a niche

Devenir is carving a niche in this nascent field. It manages about $100 million of the estimated $150 million in HSA investments nationwide. It has partnered with banks and insurers around the country, including Blue Cross and Blue Shield of Minnesota and OptumHealth Financial Services, part of UnitedHealth Group Inc.

Remjeske acknowledges that it's early days.

"We're like the 401(k) market in the early 1990s," he said. "Or the 529 college market in the mid-1990s." In other words, ready to grow... from 401(k) market to HSAs.

Five years ago, Remjeske left his job at RBC Dain Rauscher and started Devenir with several former co-workers and Piper Jaffray executives. At the time, their target was the 401(k) market.

But Devenir found itself consistently outbid by the big guys. "It's very difficult to differentiate yourself from a Schwab or Fidelity," said Remjeske, a fresh-scrubbed 36-year-old who has photos of his second baby on his desk.

Devenir soon found its differentiator: Health Savings Accounts.

Blue Cross Blue Shield was Devenir's first big contract, signed in 2004. But big is, of course, a relative term in the HSA market. Devenir manages $10 million in investments for Blue Cross HSA enrollees.

These days, when Devenir shows up to help bid for HSA contracts from large employers, it's often the investment adviser to multiple bidders, which may be health plans or banks. That's one reason why last year, Devenir tripled its assets under management to about $100 million. It now has five full-time investment professionals.

As with 401(k) plans, the funds are "self-directed," in that Devenir doesn't advise people how aggressive they should be in selecting investments. But the choices tend to include a greater number of conservative funds than is typical for a 401(k).

Last year, Remjeske was named one of 20 rising stars in the retirement investment world by Institutional Investor.

"They're one of the few investment advisers that specialize in HSAs," said Chad Wilkins, chief executive of OptumHealth Financial Services, which has 380,000 HSA accounts, the most in the country. OptumHealth, previously named Exante, has offered Devenir's slate of investments to its clients since 2005.

There are significant tax advantages to HSAs, said Kirk Hoewisch, president of HSA Bank in Sheboygan, Wis., which also works with Devenir. Like an IRA, there's an upfront tax deduction when you put the money in. It's tax-deferred, like an IRA. But unlike an IRA, any money taken out of an HSA after age 65 for medical expenses isn't taxed. (There is a nominal penalty for money taken out before age 65.)

Hoewisch divides HSA enrollees into spenders vs. savers. The savers -- who are also those most likely to invest -- tend to be self-employed and more affluent, he said.

When thinking of retirement investments, Hoewisch said, a 401(k) is best because many employers match the contributions, followed by HSAs, and finally, IRAs.

A growing HSA market

For now, most people are still struggling to understand the basic concept of HSAs for medical spending. The idea of investing is still a ways off.

In recent years, many large employers have started offering HSAs alongside high-deductible plans as one option beside traditional plans. Soon, benefits consultants predict, it could be the only option, as traditional plan premiums get too expensive for employers to shoulder.

A growing number of the self-employed have opted for high-deductible plans with HSAs, as premiums for traditional plans in the individual market become unaffordable to most.

Even then, it will take years to build up balances.

The average unused HSA balance rolled over from 2007 to 2008 at HSA Bank was $2,160, up from $1,734 the previous year, according to Consumer Driven Market Report, a trade publication. Enrollees who have at least $1,000 in cash in the account can invest anything above that.

"Investment accounts are probably going to be big 10 to 15 years from now," said Bill Wixon, public relations director for the 850-member Financial Planning Association of Minnesota.

But for now, "it's just not that big a fish to fry," Wixon said. "When people start accumulating tens of thousands, we are going to ask them to invest it conservatively."

Visit HSA for America for more information on Health Savings Accounts.

Posted by Wiley Long at 12:34 PM | Comments (0)

November 19, 2007

Grading the Candidates on Health Savings Accounts

John Goodman, the President of the National Center for Policy Analysis, who is also known as the father of Health Savings Accounts, recently released a Health Alert grading the current candidates for president on their possible health care policies.

He discusses where the current candidates stand on Health Savings Accounts, socialized medicine, universal health insurance, and the status quo. The follow is what he sees as each candidate's strengths and weaknesses:

I served as one of the judges for the National Journal's recently published report card on the health plans of the leading Democrat (Clinton, Edwards and Obama) and Republican (Giuliani, McCain, and Romney) presidential candidates.

In some cases, my scores differed substantially from those of the other judges. Apparently, some of them have not been carefully reading my Health Alerts. Anyway, here is my take:

Most Radical: McCain by a long shot. He would completely replace our arbitrary, regressive, wasteful system of tax subsidies for private health insurance with a $2,500 refundable tax credit for everybody ($5,000 for couples). By contrast, the leading Democrats would not repeal a single existing subsidy; they just add new ones. (That is why their plans are so costly.)

Most Expensive: Clinton and Edwards. By their own reckoning their plans would cost more than $1,000 per year for every household in America. Obama, a mere piker, comes in at only half that amount.

Most Oppressive: Edwards. All three Democrats would force people to buy insurance, whether they want to or not. Mandates of one sort of another would be imposed on individuals and/or small businesses and/or large businesses. Edwards (a true believer in the nanny state as well as a nanny health care system) would even mandate preventive medicine. (You veel get your mammogram!)

Least Coherent: Hillary. The Democratic Party is full of people who are dead certain they know how to reform health care. Unfortunately, they don't agree with each other. Some want socialism (Medicare for everybody). Some want to keep their current employer plan. Some want the health system available to members of Congress. Hillary's answer: All of the above. Everybody can pick and choose.

Most Loyal to Bush's Vision: Giuliani. He endorses the idea of a standard health insurance deduction that is independent of the amount people spend. Economists love this idea, because it eliminates perverse incentives in the current system. (No one could lower his taxes by buying more insurance.) Unfortunately, voters haven't a clue what this means.

Least Loyal to his Own Vision: Romney. He enters the contest with a huge advantage. He engineered a bi-partisan plan to credibly create universal coverage in Massachusetts. (Compare that to Hillary's failed reform.) So what does Romney do when he gets in front of primary voters? Pretends it never happened.

Now let's turn to the questions of cost, quality and access. Regular readers of Health Alerts will not be surprised to learn that the results are disappointing.

Problem of Cost. If you agree with me that we cannot control costs unless someone is forced to choose between health care and other uses of money, then the Democratic plans are a disaster. They don't even mention Health Savings Accounts and all leave the impression that ideal health insurance is first dollar coverage. To make matters worse, Clinton and Edwards would inject an additional $1 trillion-plus dollars into the system over the next 10 years.

All three Republicans endorse HSAs, which encourage cost control despite all the defects in their current configuration. Romney is most explicit about endorsing complete HSA flexibility - which would greatly expand their use and their impact. Unfortunately, Romney offsets these advantages with an aberrant idea - the deductibility of all out-of-pocket spending. (This is a virtual invitation to all taxpayers to spend, spend, spend!) McCain gets the edge from me here because he completely removes the incentives to overinsure and appears to back the concept of a flexible HSA.

Problem of Quality. If you agree with me that substantial quality improvements are not possible unless providers compete for patients based on price (and therefore on quality), then again the Democratic plans are a disappointment. None of them envision patients paying a real price for anything. To make matters worse, they all to one degree or another endorse managed competition - a system under which health plans have an incentive to overprovide to the healthy and underprovide to the sick (more on that in a future Health Alert). Unfortunately, there is no guarantee that the Republicans will not also succumb to the allure of this faulty idea - as Romney did in Massachusetts. The redemption for the Republicans is HSAs. To the degree patients manage their own health care dollars, they will force providers to compete on price and quality.

Problem of Access. If you agree with me that access to care for low-income families will not improve unless they have access to the same doctors and facilities that other patients have, we are left with a mixed bag. All the Democratic candidates endorse an expansion of Medicaid and SCHIP. Given MIT economist Jon Gruber's estimate of crowd out, this implies that millions of people would move from private plans (where they generally have wide access) to public plans (where access is limited). On the other hand, it's hard to spend $120 billion a year without some expansion of private coverage. So on balance, the Democratic plans are moderately positive on this measure. I give higher marks to the three Republicans because I assume they would use free care and Medicaid and S-CHIP money to enroll people in private plans - where access to care is much greater. But not much higher, because none of them is explicit enough on these points.

I cannot resist commenting on one more reform idea. Sen. Clinton has repeatedly stressed that insurance premiums should be totally unrelated to health status. But they are already largely unrelated. Do you suppose she intends to go all the way - allowing people (no matter how sick) to enroll in any plan at the drop of a hat? If so, the number of uninsured would double or triple. (Why pay expensive premiums when you are healthy if insurance is always available once you get sick.) The problem with grading her plan is: do we take her statements seriously?

Have a great day.

John Goodman
President
National Center for Policy Analysis
12770 Coit Rd., Suite 800
Dallas, Texas 75251
http://www.ncpa.org

Posted by Wiley Long at 12:10 PM | Comments (0)

November 12, 2007

Health Savings Accounts Can Save Our Health Care System

Health care costs have skyrocketed in the last 20 years. Over the last 30 years the percentage of Americans covered by insurance has also skyrocketed. What has been lost is any kind of check on the health care system. If insurance covered the test or treatment you probably got the service. If it was not covered then you probably didn't.

With a Health Savings Account, you would be responsible for deciding what services you would be given...

You would base this decision on the doctor’s recommendation, the quality of life you wish to maintain, and the cost. You will pay for this service with a debit card that draws from your Health Savings Account. You will be backed up with a catastrophic health care plan for serious medical issues.

If you don’t use all the money in your Health Savings Account, it rolls over into a 401K type of savings, or in some cases the excess might be returned to you. Some plans might be a little different, but that is the basic idea.

Insurance companies are not big fans of this idea, but they stand to loose profit. In my mind the plans will bring health care costs to the forefront, and increase competition. You will have consumers shopping for the best buy. You might even have medical providers cutting costs to increase business.

For any of this to happen Health Savings Accounts would have to become widespread. The public would need to be educated on how the system would work. This would not address lower income citizens or illegals so we would still need a safety net.

Lets contrast this idea with the government run health care being talked about in the media. Can you think of a program the government has run well. Will health care costs go up or down if the government runs it? Will competition increase? Will the health care customer matter to the provider? These answers seem fairly obvious to me.

Many of our elected officials would have us believe there is only one way out. That one way is to be dependent on the government for our health care. That does not give me a warm and fuzzy feeling. How about you? One look at the VA should give clues about how things would work.

I think the marketplace has solutions to many of our problems. We must be creative and open minded. Health Savings Accounts are a great idea that will bring medical providers closer to the customer not farther away.

Lets not give the government more money and control. Lets keep the money and control for ourselves.

Learn more about HSAs at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:41 AM | Comments (1)

November 02, 2007

Socialized Medicine vs. Health Savings Accounts

Despite the growing evidence that socialist medicine is a disaster, its supporters blindly continue to push for a government system in the U.S. They need some down time in a hospital bed in England.

The British system, which, along with Canada's, supposedly is the model we should follow, is no panacea. In fact, it is a mess.

A Los Angeles Times story describes a system so rotten that in some hospitals "patients allegedly were forced to defecate in their beds and wait for hours for clean sheets."

The story focuses on the struggle in British hospitals to contain the growth of deadly hospital infections that are in large part bred by unsanitary conditions.

"Britain has been reeling over the last year with reports of more than 6,300 hospital-based 'superbug' infections at its government-run National Health Service facilities," the Times' Kim Murphy reported from London.

The nasty bacterium British hospitals are most concerned with is Clostridium difficile. It can bring on fatal diarrhea — a health hazard to others if it's not quickly and properly cleaned. Clostridium difficile resists many disinfectants, and drugs other than appropriate antibiotics have little effect on it.

The face of the system's struggles could be the 87-year-old war veteran who died suffering the indignity of soiled sheets and bedsores. His daughter told the Times that her father asked, "What have I done to deserve a place like this?"

Did we mention that "a place like this" is part of Britain's National Health Service, a state-run $183 billion-a-year medical monster whose "hungry maw," Camilla Cavendish wrote in the London Times, "is swallowing more and more resources at the expense of virtually everything else."

"The health service marches relentlessly on, having hoovered up two-thirds of the increase in public spending in the past five years."

That spending doesn't include $280 million the government promised last week to spend to thwart C. difficile. Nor does in take into account an additional $260 million that will be used to check incoming hospital patients for MRSA, a drug-resistant Staphylococcus bug.

So what are the Brits getting for their money besides second-rate care, soiled beds, superbug outbreaks, medical professional shortages, state-imposed rationing, central planning and long waits for surgery and doctor visits?

Maybe unrepentant anti-choice cranks pushing government health care on an ostensibly free people can tell us. If only they'd stop using nonsense and misleading rhetoric to prop up their lame arguments, as left-wing propagandist Joe Conason did in a recent column titled "Why 'Socialism' Evokes No Fear."

"Doctors who used to wail about the dangers of Medicare have learned how unpleasant it is to deal with dozens of insurance companies, each creating different rules to cut costs and deny care. So have their patients," Conason wrote. "The corporate model is more expensive and less efficient than the government plans that provide care in every other industrialized nation."

Notice the terminology — he spits out "corporate model" as if it were something toxic — and false choice that Conason offers. It's either the corporate model or government plans. He talks as if other options don't exist. They do.

The corporate model that Conason scorns actually is a creation of the very government that he wants to take over medical care. Federal policy since World War II has encouraged employers to set up insurance coverage for their workers. Would Conason and the Democrats who are so eager to take over our medical care rather that we all pay out of our pockets, just as we buy groceries?

The most reasonable course is let the market handle health care the same way it efficiently and justly handles the distribution of other goods and services. Let Americans buy their own insurance, using the savings from tax credits to pay for the premiums. Stop discouraging Health Savings Accounts. Give us more choice. America was not meant to be an intrusive tribal state.

In Conason's meanderings, he tries to make the case that America is ready for a universal health care system with a single payer — the government. But a IBD/TIPP poll poses a question that accurately depicts the situation rather than imply universal care will be free, tells a different story.

The truth is that with little exception, the only Americans who want a socialist health care system are those who want to control American life. Our choices and health are worth the inevitable battles that lie ahead.

http://www.health--savings--accounts.com

Posted by Wiley Long at 07:21 AM | Comments (4)

October 24, 2007

The Health Savings Account Effect on Doctors

Overall, healthcare costs have been rising faster than inflation, but not all medical costs are skyrocketing. In a few pockets of medicine, costs are down while quality is up. The continued use of Health Savings Accounts will help sustain this new trend.

Dr. Brian Bonanni has an unusual medical practice. His office is open Saturdays. He e-mails his patients and gives them his cell-phone number. "I need to be available 24 hours a day," he says. "I want to be there when a patient has questions, and I want to be reachable."

I'll bet your doctor doesn't say that.

Bonanni knows he has to please his patients, not some insurance company or the government, because he's paid by his patients. He's a laser eye surgeon. Insurance rarely covers what he does: reshaping eyes so people can see without glasses.

His patients shop around before coming to him. They ask a question that people relying on insurance don't ask: "How much will that cost?"

"I can't get away with not telling the patient how much exactly it's going to cost," Bonanni says. "No one would put up with it. And the difference of a hundred dollars sometimes makes their decision for them."

He has to compete for his patients' business. One result of that is lower prices. And while the procedure got cheaper, it also got better. Today's lasers are faster and more precise.

Prices have fallen and quality has risen in other medical fields where most people pay for care themselves, like cosmetic surgery. Consumer power works -- even in medicine.

When government and insurance companies are kept away from the transaction, good new things happen.

A doctor in Tennessee I talked to publishes his low prices, such as $40 for an office visit.

Most doctors would say you can't make money this way. But Dr. Robert Berry says you can. "Last year, I made about the average of what a primary-care physician makes in this country," he said.

Berry doesn't accept insurance. That saves him money because he doesn't have to hire a staff to process insurance claims, and he never has to fight with companies to get paid.

His mostly uninsured patients save money, too. Unlike doctors trapped in the insurance maze, Berry works with his patients to find ways to save them money.

Sometimes the $4 pills from Wal-Mart are just as good as the $100 ones.

Speaking of Wal-Mart, medical clinics are popping up in Wal-Mart stores and in other similar markets. The clinics offer people with simple problems like sore throats and ear infections relatively hassle-free care ... cheap. Almost everything costs $59 or less. And the clinics are typically open seven days a week.

While some politicians claim that their health care programs requiring everyone to have insurance are not socialized medicine, the effect is not that much different. The main difference is that the insurance companies are rationing the health care instead of the government. It still introduces a layer of cost on the treatment that is extracted through lower income to the doctor and lower service to the patient. Whenever you distort the free market whether by the socialist system or the insurance system, you are transferring the decision making process from the patient to someone else. That is why Health Savings Accounts, where the patient is responsible for at least the first $1000, helps restore balance to the entire process.

Posted by Wiley Long at 10:06 AM | Comments (2)

September 23, 2007

High-Deductible Health Insurance can Benefit Those with a Health Savings Account

Nearly everyone can benefit from a high-deductible health plan coupled with a Health Savings Account (HSA). A common misconception is these health insurance plans are only for certain types of people. However, that is just not true.

Health Savings Accounts help consumers pay for current health care expenses with tax-free dollars and provide a way to save for future health care expenses because unused HSA contributions roll over each year and earn interest tax-free.

So how can these HSA plans benefit just about everyone:

Health Savings Account funds can be withdrawn at any time tax-free when used for qualified medical expenses. You own your HSA, so you can take the funds with you when you change jobs or change health plans. And, because you can use the account in retirement, Health Savings Accounts also present a significant option for those beginning to plan for retiree health care expenses.

A common misconception is that high-deductible health plans are geared exclusively toward healthy individuals. Actually, some high-deductible and HSA plans have benefit designs with incentives geared to those with chronic conditions such as waiving the co-pays for preventive medications used to keep these conditions under control. Other plans financially reward consumers who follow the recommended preventive care.

Many companies offer online tools to allow members considering an HSA to model the HSA tax savings and long-term financial savings of this type of plan. Those with chronic conditions can estimate their annual costs for care by using a program that analyzes their usage of doctors and medications. Pharmacy cost estimates are readily available through a variety of sources, and mail-order drug options can be a cost-saving avenue for some.

The key to making the right choice is doing your homework. After a careful and thorough examination of all the elements of a health plan are taken into account, a high-deductible plan may be the right choice for you.

THOSE WHO TAKE AN ACTIVE ROLE IN PREVENTIVE CARE PREFER IT

Based upon our client experience, the demographic characteristics such as age, gender, number of dependents and salary of an individual who enrolls in a high-deductible insurance plan are similar to those who enroll in traditional plans.

However, the primary indicator of whether an individual will choose a HDIP is the health status of the individual and the individual's desire to engage in the health care process.

Individuals who are comfortable with being exposed to a higher deductible in exchange for lower fixed cost — either in the form of contributions to an employer's plan or individual premiums to an insurance carrier — are good candidates for HDIP.

Individuals who actively seek preventive care and are interested in researching their conditions and utilizing the tools provided with these programs also have found these programs beneficial.

Today, large employers are more likely to offer a HDIP than small employers; although smaller employers are adopting these programs at a more rapid pace and are more likely to use HDIP as the only benefit option.

Populations with high dependence on personal computers such as law, engineering and financial service firms as well as those that are using these programs as a way to save for retiree medical expenses are more likely to offer an HDIP.

Also, families without employer-sponsored insurance have used the strategy of enrolling the children in state-sponsored programs and purchasing a HDIP plan to keep premiums low for the parents.

In summary, individuals and institutions who are more aggressive in engaging in the health care process and managing their own costs are the best candidates for a HDIP.

PEOPLE WHO WANT TO SHIFT THE CHARACTER OF RISK FROM FIXED TO VARIABLE

The primary concern people have with HSA-compatible plans is that they can increase financial risk and, in turn, can prevent participants from securing appropriate care. But the irony is that they do not have to increase a participant's risk, and they actually can decrease risk when compared to a more traditional plan. They do, rather, change the character of risk from fixed to variable.

Assume you're enrolled in an HMO with a $10 office visit co-pay and $300 monthly premium. From a financial perspective, you run the risk your premiums — $3,600 a year — will exceed your claims, and you will have overinsured yourself.

So, you have a fixed risk of $3,600 plus co-pays for office visits that represent your variable risk. That might bring your total risk to $3,650 annually.

Compare that risk to a plan with a $2,450 deductible plan, after which the plan pays 100 percent of covered charges, with premiums of $100 a month. This scenario changes the character of your annual risk from $3,600 fixed plus $50 variable, to $1,200 fixed plus $2,450 variable. It's still the same total risk. Also, you can direct some of your $2,400 savings to an HSA for future use.

There is added uncertainty and a potential cash flow challenge associated with higher up-front costs, but purely speaking, the risk perception around HSA-compatible plans is just that, perception.

Many people misinterpret the "high deductible" dynamic as an increase in risk, and it doesn't have to be.

Clearly, education about this dynamic plays a large role in helping people understand whether an HSA-compatible plan is right for them.

Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 11:22 AM | Comments (0)

September 15, 2007

Without Health Savings Accounts, Who Pays for Health Insurance

Even with the continued growth of Health Savings Accounts, the number of Americans without any health insurance deserves attention. However, according to Clark Havighurst and Barak Richman, professors at Duke Law School, the greater problem may be the plight of middle- and lower-income workers who have health coverage but pay dearly for it every year.

In fact, many Americans would probably drop their health coverage if they knew how much it really costs them. But they don't know, because of the way the tax system treats health benefits:

- Under the current system, employers are the principal purchasers of health insurance and workers seldom know how much their employers pay.

- They also don't realize what economists have repeatedly concluded: Employer outlays for health insurance translate directly into less take-home pay for employees.

As a result:

- The tax system has induced workers to believe that someone else was paying the bills for their care; meanwhile, they have pushed for better health benefits regardless of cost.

- Weak consumer cost-consciousness has left the United States with private insurance that functions as a reverse Robin Hood scheme, taking from middle-income Americans to support a health system that benefits many elite interests.

A good way to prepare the public for needed health reforms would be to expose consumers to the true cost of health insurance, and Health Savings Accounts are doing just that.

President Bush's pending proposal to tax the value of employees' health benefits as income, while also providing a compensating standard deduction or tax credit, would serve the useful purpose of stimulating market and political demand for low-cost alternatives, including coverage that stops short of paying for everything seemingly mandated by professional (that is, noneconomic) standards, say Havighurst and Richman.

Find out what a Health Savings Account can do for you. Visit: http://www.health--savings--accounts.com

Posted by Wiley Long at 11:37 AM | Comments (0)

August 30, 2007

2008 Health Savings Account Predictions

Enrollment in Health Savings Accounts has increased steadily since they became available in 2004, but according to some health care consultants, 2008 could be their breakout year.

August is the month when employers buy health insurance for their employees or switch plans. Health care consultants from Towers Perrin, Mercer and BearingPoint, three of the biggest health care benefits consulting firms in the country, said the current enrollment season indicates that in 2008, Health Savings Accounts will increase dramatically.

"This will be a good year for Health Savings Accounts," said Tracy Watts, a health benefits consultant for Mercer Human Resource Consulting. "We are seeing employers shift from traditional preferred-provider organization plans and health reimbursement accounts to the Health Savings Accounts for 2008."

Health Savings Accounts operate like individual retirement accounts, allowing people to save their own money in a tax-free account for use on health-related expenses. If the money is not spent, it rolls over annually and accumulates until the policyholder is 65, at which time the money can be used for any purpose.

This year, health care consultants predict a significant leap in enrollment as health insurers come around to offering products that are compatible with the Health Savings Accounts and employers become more effective at educating their work forces about the benefits of adopting such HSA plans.

Consultants predict an increase of about 4 million Health Savings Accounts, which would put the total number of Health Savings Accounts at about 10 million. The surge is coming through mass enrollment of employees at companies with thousands of workers. Until now, smaller companies were more apt to offer health insurance plans that come with a Health Savings Account.

"We're seeing the big guys come around," said Jay Savon, a health care consultant for the health benefits firm Towers Perrin. "When the large corporations start to offer these programs, Health Savings Accounts will really take off."

Learn more about Health Savings Accounts at:

http://www.health--savings--accounts.com

Posted by Wiley Long at 11:55 AM | Comments (1)

August 24, 2007

Health Savings Accounts: The Anit-Universal Coverage Club

Many debates in health care over the last decade have focused on the best way to universally-insure all Americans.

The Left believes in a single-payer health care system where all Americans are covered by a single government health care plan.

The Center-Left believes in some combination of socialized medicine and heavily government-subsidized private sector health care.

The Broad Center-Right coalition believes in individual choice and control, in particular via use of Health Savings Accounts (HSAs).

But maybe we're not asking the right question. The Cato Institute has formed an "Anti Universal Coverage Club." It asks the question, "why is universal coverage the goal, not greater health?"

To that end, the Club has several principles:

1. Health policy should focus on making health care of ever-increasing quality available to an ever-increasing number of people.

2. “Universal coverage” could be achieved only by forcing everyone to buy health insurance or by having government provide health insurance to all, neither of which is desirable.

3. In a free society, people should have the right to refuse health insurance.

4. If governments must subsidize those who cannot afford medical care, they should be free to experiment with different types of subsidies (cash, vouchers, insurance, public clinics & hospitals, uncompensated care payments, etc.) and tax exemptions, rather than be forced by a policy of “universal coverage” to subsidize people via “insurance.”

There are several serious members of this Club:

60 Plus
Alabama Policy Institute
American Conservative Union
American Shareholders Association
Americans for Prosperity and AFP Foundation
Americans for Tax Reform
Center for Freedom and Prosperity
Christus Medicus Foundation
Commonwealth Foundation for Public Policy Alternatives
Consumers for Health Care Choices
Council for Affordable Health Insurance
Fairness Foundation
FreedomWorks
Grassroot Institute of Hawaii
Illinois Policy Institute
Indiana Family Institute
Medical Savings Insurance Company
Mississippi Center for Public Policy
National Center for Policy Analysis
National Taxpayers Union
Pacific Research Institute
Public Interest Institute
Rio Grande Foundation
Small Business Entrepreneurship Council
The James Madison Institute
Washington Policy Institute

This, combined with the "Health Care Freedom Fighters" (a coalition united around free market health care principles) is a good sign in the movement for the health care debate.

Health Savings Accounts are a big part of this movement. Visit http://www.health--savings--accounts.com to learn more about how a Health Savings Account can benefit you.

Posted by Wiley Long at 07:35 AM | Comments (0)

August 16, 2007

Can Health Savings Account Consumers Drive Down Costs

A new study conducted by Harris Interactive (a market research company) shows patients who bear a larger burden of their own medical costs, like those in Health Savings Accounts, display better consumer-driven behavior than those in traditional health plans.

The study, "Consumer and Physician Readiness for a Retail Healthcare Market," reveals a large number of patients display consumer savvy when buying healthcare, but most lack the information necessary to make informed purchasing decisions due to lack of price transparency.

However, the majority of patients in Health Savings Account plans included in the survey said they are not at all or only somewhat satisfied with the current information available on quality for prescription drugs (60 percent), specialist doctors (65 percent) and primary care doctors (52 percent). The survey garnered similar responses for information on cost.

This lack of information makes it difficult for consumers to make smart buying decisions even if they want to, causing higher costs and poorer outcomes, said Gary Ahlquist, a senior vice president at Booz Allen Hamilton, the strategy and technology consulting firm that sponsored the survey of 3,000 patients and 600 physicians.

"The main issue we have (in the healthcare industry) is a disengaged consumer," he said at a panel discussion hosted in Washington by the American Enterprise Institute, a conservative think tank.

The phenomenon of consumers who pay little attention to cost or outcome stems from the employer-based system of health insurance instituted in World War II, Ahlquist said, when the federal government agreed to give Ford Motor Co. subsidies for the health coverage it provided employees.

"(That) put the consumer not in the driver's seat and not in a view of consequence," he said.

But a growing number of consumers surveyed, particularly those in HSA plans, said they shop for better deals when they need treatment. When it comes to pharmaceuticals, 68 percent of respondents in high-deductible plans said they often substitute generic prescriptions for brand-name drugs, compared with 60 percent in traditional plans.

Similar disparities between the two groups existed in all areas of care included in the survey. For example, while 39 percent of consumers in high-deductible plans said they are likely to use a primary care doctor instead of a specialist for advice or treatment, only 30 percent of traditional plan enrollees responded in the affirmative.

In addition, those who bear the highest percentage of their individual healthcare costs expressed more willingness to invest in preventive activities.

Consumer enthusiasm for prevention sends a positive signal to healthcare providers, who are currently paid for the amount of treatment they provide to cure illnesses, not for the amount they prevent, said Jay Silverstein, president of Revolution Health, a "consumer-centric" health company.

Prevention should be a key component of any initiative to provide greater information to consumers, because without an action plan of how to live a healthier lifestyle, information doesn't improve health outcomes, Silverstein said.

"To empower people, you need to make (information) simpler, you need to make it relevant, you need to make it transparent and you need to make it approachable," Silverstein said.

If consumers have more information at their fingertips and competition in the industry is encouraged, costs could decrease and quality could improve, said Paul London, president of Paul A. London and Associates, an economic consulting group.

"Government has to be a facilitator of (healthcare industry) change," London said.

If federal agencies, such as the Department for Health & Human Services and the Centers for Medicare & Medicaid Services, changed regulations to open up competition and required greater health outcomes from providers, changes in the healthcare industry could reflect those seen in other sectors of the economy, London said.

"Nobody knew how much American cars could be better until they saw real alternatives in the form of German and Japanese cars," he said.

However, dumping the burden of healthcare costs on consumers doesn't mean health outcomes will increase.

Physicians in particular seem skeptical about the outcomes of consumer-driven care, and 58 percent surveyed said they think it will lead to a reduction in the utilization of necessary healthcare.

"Even very small co-payments, $5 or $10, significantly reduce the number of people who seek care," London said.

But providing everyone with free healthcare does not address the root problem of high costs, said Mark Smith, president of the California HealthCare Foundation, an independent philanthropy that works to improve the health of California's populace.

"It's not like people who have insurance right now are getting great coverage," Smith told United Press International. "While we're talking about buying more people into the system, we also need to be talking about what kind of system we're buying them into."

Learn more about the advantages of Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 12:06 PM | Comments (0)

August 05, 2007

Healthcare Solution Should Include Health Savings Accounts

Ronald Reagan once noted that "Governments tend not to solve problems, only to rearrange them." He could have been describing the State Children's Health Insurance Program (SCHIP). Created in 1997 in the wake of the collapse of the Clinton health plan, SCHIP was supposed to be the down payment in providing government health care for all by first providing federal support to new state-run insurance programs for millions of children, who, we were told, did not have health insurance.

It took nearly 10 years to enroll the nearly 5 million children who are currently on SCHIP today.

In the main, some of the children that were enrolled by states were simply shifted from Medicaid to the new program in order to benefit from a more generous federal subsidy. While SCHIP did provide many children with coverage that did not have access to it in the private sector, it also siphoned off lots of children who, as they moved out of Medicaid, might have otherwise gotten private insurance.

Regardless, 10 years later, there are still 6 million children eligible for Medicaid that have not signed up and only 700,000 children left eligible for SCHIP but unenrolled. That is a classic example of rearranging a problem with more money, which is how Washington creates entitlements.

The federal government is already paying for Medicaid and SCHIP but obviously people don't like the hassles or quality associated with it. So, rather than give both SCHIP- and Medicaid-eligible families the cash and the choice of signing up for private health insurance, Democrats want to increase SCHIP spending by $50 billion to cover families with incomes up to $83,000 a year. In his movie "Sicko," Michael Moore toasts countries like France, Canada and Britain where Pinot-drinking yuppies are drowning in taxes to pay for "free" health care. According the Heritage Foundation, that means a percentage of American families will be eligible for an entitlement and pay the Alternative Minimum Tax. Life does imitate art.

SCHIP's record in rearranging the problem of health-care coverage rather than expanding opportunity suggests that Congress should seek a different course. It wants to create a government-run health system on the backs of children with higher taxes. Instead, it should expand tax breaks for Health Savings Accounts and better insurance choices that promote portability and encourage prevention and disease management.

Unfortunately, as far as health care is concerned, it would appear many in Congress would rather pay to have us join Michael Moore's medical mystery tour to Cuba than to continue to be part of the Reagan Revolution.

Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 08:06 PM | 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 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)

May 31, 2007

Worker's Income Level Affects Health Savings Account View

High-income consumers and low-income consumers are interested in different aspects of Health Savings Account arrangements.

Researchers at Mintel International Group Ltd., Chicago, have published figures illustrating the differences.

The researchers have published the survey in a wide-ranging review of the Health Savings Account market that deals with issues such as the size of market, the nature of the major players in the market, and the strategies the players are using to market their products.

One section of the report deals with consumers’ views of Health Savings Accounts and includes data broken down by factors such as age, household size and income.

The Mintel researchers found that consumers with annual household incomes under $25,000 were almost as interested in Health Savings Accounts and the accompanying high-deductible health insurance as consumers with annual household incomes over $100,000.

Although the high-income survey participants were more likely to have heard of Health Savings Accounts, the level of willingness to consider an HSA was similar in both groups.

Only 34% of the high-income consumers and 38% of the low-income consumers said they are definitely not interested in an HSA.

But the researchers found that the 2 groups of consumers have different reasons to be interested in Health Savings Accounts.

Only 5% of the high-income consumers said they are interested because they have no health coverage and believe that they might be able to afford coverage if they had an HSA arrangement, but 29% cited potential tax savings as the best reason to get an HSA.

In the low-income group, 12% of the consumers surveyed said they are uninsured and view an HSA as a possible strategy for affording health coverage, and 16% said the most important advantage of owning an HSA would be the ability to pay for things not currently covered by insurance, such as eyeglasses, with pre-tax dollars.

For survey participants with incomes under $50,000, the most important disadvantage of the HSA concept was the idea of having to pay the full cost of items such as prescriptions before they met their deductibles.

Higher-income participants said the biggest disadvantage was the risk that they might not spend more than the deductible on health care in a year.

Posted by Wiley Long at 10:10 AM | Comments (0)

May 04, 2007

John Goodman Comments on Health Savings Accounts

John Goodman, from the National Center for Policy Analysis (NCPA), had this to say in his response to his Wall Street Journal op ed.

"A number of people have asked me to clarify my position on Health Savings Accounts, and here is my response:

Suppose we passed a law tomorrow prohibiting all insurance companies (including Medicare and Medicaid) from paying any medical bills less than $5,000. What would happen? The medical marketplace would transform almost overnight. Continued...

Within a couple of months, there would be no such thing as a primary care physician (PCP) who did not post prices - at least for routine procedures. PCPs would offer telephone and email consultations. They would keep patient records electronically (just like lawyers and accountants). Overall, there would develop a teeming, bustling, entrepreneurial marketplace for primary care, diagnostic tests and most prescription drugs.

Specialty markets would develop for the chronically ill, as doctors competed for their business instead of trying to avoid them. Patient education would become an emerging field, with providers offering to teach diabetics, asthmatics, etc. how to manage their own care. Internet drug sales would double, triple and quadruple, as brand drugs faced increasing competition from generic, therapeutic and over-the-counter substitutes. At the same time, overall health care spending would plummet.

(Just thinking about it makes you wonder why we haven't done this already.)

Now, can the widespread use of Health Savings Accounts create this same transformation? Certainly HSAs and HRAs, along with an even greater number of uninsured and a still larger number of employees facing higher deductibles and co-payments, are already having an impact on the market. How else can you explain the exploding number of walk-in clinics, the growth of internet drug sales, and $4-a-month-for-generics at Wal-Mart and other big box retailers?

However, the impact of HSAs will be much more limited than the scenario described above. The reason: while HSAs free the patient side of the market, they do not free the provider side. Current law requires insurers with HSA plans to create an across-the-board deductible and specify what spending counts toward the deductible. In the process, HSAs do not become a radical challenge to the existing payment system. Instead, they become an extension of the current system.

As you approach your doctor's office with HSA in hand, your insurance company has already established with your physician which tasks are covered, which ones are not and how much will be paid. Of course in principle you can use your HSA to pay for telephone and email consultations, electronic medical records, patient education, etc. But since none of these expenditures count toward your deductible, doctors have weak incentives to change the way they practice medicine.

HSAs free patients and give them good incentives. They do not free the supply side of the market, however. They could, if we changed the federal law. What we need are completely flexible accounts that can wrap around any health plan."

Here at HSA for America, we couldn't agree with Mr. Goodman more. Learn more about what a Health Savings Account can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 12:49 PM | Comments (0)

April 26, 2007

Health Savings Accounts Continue to Grow as a Viable Solution to Rising Medical Costs

There are two things a small business or a self-employed person dreads the most -- taxes and health care costs. Tax season is a painful reminder of both.

However, the small businesses and self-employed entrepreneurs have been increasingly turning to a solution that provides a much-needed break: Health Savings Accounts. Health Savings Accounts help control costs and provide attractive tax advantages; both for people who purchase their own insurance (self-employed) and for small business owners.

The market is headed in this direction. The U.S. Treasury estimates the number of Americans with Health Savings Accounts will grow to 25 million to 30 million by 2010. Many insurance companies are seeing the growth in HSA popularity and are marketing a variety of products.

United Healthcare's Golden Rule Insurance Co., based in Indianapolis, pioneered the HSA concept about 15 years ago and now 40 percent of its customer base -- almost half -- have HSA accounts. Other companies such as Aetna and Blue Cross Blue Shield, continue to enter the HSA market in large part because of their attractiveness to small business and self-employed individuals.

That attraction is being driven, in part, by prohibitive costs. According to the Kaiser Family Foundation Employer Health Benefits 2006 Survey, health insurance premiums have "increased more than twice as fast as workers' wages and over all inflation." Premiums have actually increased by 87 percent over the past six years.

The same report noted that the self-employed pay an average of $11,480 for family health coverage. This is where Health Savings Accounts become an increasingly attractive solution.

A self-employed HSA policyholder doesn't dread the coming tax deadline with as much trepidation. The HSA allows that self-employed business owner to put money into the account tax-free, where it grows tax-deferred, and can be withdrawn at any time for qualified medical expenses without any tax penalty.

Any money left in the account at the end of the year rolls over to the following year, which allows the money to grow and be available for medical needs for years to come. Congress, in fact, just made Health Savings Accounts even more worthwhile by expanding the maximum one can save in the accounts to $2,850 for an individual and $5,650 for a family, per year.

Congress also made it possible for someone who opens a Health Savings Account in mid-year to contribute the maximum amount allowed by law to their HSA without penalty. Additionally, the new law allows a one time transfer from your IRA to your HSA as long as it does not exceed the annual contribution limit. Can Congress do more? Yes, it can help advance tax parity for the self-employed by allowing them to exclude health insurance premiums from self-employment tax. Thankfully, this idea has solid bipartisan support and federal legislation has been proposed.

As more people open self-employed businesses, the demand for Health Savings Accounts is going to grow. In 2005, almost one-third of the nation's 13.1 million self-employed people had no insurance at all.

In the meantime, those with Health Savings Accounts have not only been covered but have been saving money for future medical needs. According to Golden Rule Insurance Co., as of the middle of last year. their HSA customers had saved $165 million in their accounts, and that's just since early 2004. In total, HSA policyholders nationwide have accumulated over $5 billion in the accounts at the close of 2006.

Every single dime in these accounts is protected from the tax collector, which allows a small business or a self-employed business to focus on growth and success instead of worrying about rising health care costs.

Visit http://www.health--savings--accounts.com for more information on how a Health Savings Account can work for you.

Posted by Wiley Long at 11:23 AM | Comments (0)

April 03, 2007

Be Wary of Universal Health Care

Many policy makers believe that a universal health care system will bring better care to millions of Americans, but they're wrong, says Gerald A. Anzalone in the Journal News (New York). What is really needed is more competition and wider use of Health Savings Accounts.

Looking abroad can show the down side characteristics of universal health-care systems:

- Ireland boasts the richest economy in Western Europe, but in a country of about 4 million people, there are 17 neurologists and it takes up to a year to get an appointment to see one for the initial visit.

- It takes about four months to get an MRI scan, about 14 weeks for diagnostic ultrasound and surgical cases are put on waiting lists.

- Canadians pay roughly a 50 percent income tax to help support their national health-care system.

- In Ontario, most Canadians who can afford it purchase private extended health coverage rather than relying upon the government-sponsored programs to avoid similar problems.

Further, government-sponsored health-care programs in our own country have serious problems, says Anzalone:

- Medicare Part D prescription drug coverage created more confusion that even Medicare representatives could answer.

- Over-utilization of Medicaid programs break the backs of state budgets.

- Recent news reports about the horrific conditions and abysmal patient care at Walter Reed Army Medical Center, our nation's flagship of government-managed health care, hardly inspire confidence in a government-run medical system.

Instead of trying to replace one bad system with another, the government should:

- Encourage even more competition among private insurers so that doctors and providers receive fair reimbursements for good medical care.

- Provide direct subsidies for people who purchase health insurance that they can afford and that is portable from job to job.

- Encourage the use of tax-sheltered Health Savings Accounts for those want to control where and how their health-care dollars are spent.

Posted by Wiley Long at 09:30 AM | Comments (2)

March 13, 2007

Universal Health Coverage or Health Savings Accounts

Michael Turpin is the Northeast region chief executive for United Healthcare. Unlike most industry executives, his experience with universal health insurance goes beyond the theoretical. He remembers lying on a bed in an English hospital ward and seeing his doctor - from a distance only - and hearing himself referred to as the "pneumo."

Universal health care of some kind is one of the ideas some states are grappling with in an effort to bring prices down while insuring those who now go without. Promoting Health Savings Accounts is another option.

Turpin was already on the road to recovery when English friends got him to move over to the relative luxury of the paying side of the system, but at least there his doctor — the same one from the ward — introduced himself and knew Turpin's name as well as his diagnosis. Of course, the bill for a short stay on the paying side was many times more than that for his longer stay among the national health patients.

Turpin has been with United Healthcare for about two years, and in Trumbull at the former Oxford Health Plans, which is now part of United Healthcare, for about a year. He spent more than 20 years as a health-care consultant to companies.

The reality of universal health care, Turpin said in a recent interview, brings with it a slew of questions, including how it will be financed and controlled.

In order to improve public health, he said, the state has to get beyond the issue of the uninsured and universal health coverage. Raising taxes to pay for coverage doesn't deal with the root cause for rising health-care costs.

"America's getting fatter, sicker, less accountable," he said, and in order to improve the health-care system, individuals need to take more responsibility for themselves. "I think obesity will be the next smoking," he said.

"You don't make a change in your lifestyle until you feel a pain in your chest or a pain in your wallet." The industry's coined a term for the new model — consumer-directed health care. It comes in a variety of forms, but the most popular is a Health Savings Account.

"The future of health care we're all moving out of the conventional HMO-model program," said Stephen Glick, administrator of the Orange-based Chamber Insurance Trust. This group manages the benefits programs for chambers of commerce in Connecticut and Western Massachusetts.

"The real solution is an incremental change," Glick said, starting with improving the Medicaid reimbursement rate and getting more kids insured.

At the individual level, insurance companies today, Glick said, are spending money and time to "reprogram plans," in order to reflect the change to consumer-directed health care. But the most important element is consumer education; here, Glick said, United Healthcare was an innovator.

According to Glick, companies such as Pitney Bowes, IBM and Xerox have created behavioral changes in their workers, using wellness programs to encourage healthier behavior, for example. This keeps their insurance rates from growing as quickly as those of other companies.

Tanya Court, director of public policy and programs for The Business Council of Fairfield County, said three-quarters of health-care spending is on chronic diseases, such as diabetes.

"That's largely preventable," she said.

Some companies are adding on-site fitness centers, or healthier foods in cafeterias, she said. Changing benefit plans to reward employees for healthy or frugal habits — such as no copay for an annual physical or reduced copays for generic drugs — is another possibility.

On the topic of universal health care, Court said, "You are already" bearing the burden of caring for the uninsured, through higher insurance costs. But the state and rest of the country have to get a handle on the costs of providing care and ridding the health-care system of inefficiencies.

"People have to have some skin in the game to take control of their health," Court said.

Turpin thinks his background in the middle between the health insurers and the companies buying their products makes him more of a pragmatist about the issue.

All the industry has been doing for the last six years is shifting costs to workers and eroding their wage base, he said.

Employers are looking for the lowest-cost plan, he said, adding some will leave a health-care company in order to save 1 or 2 percent.

Some doctors are dropping out of managed care entirely — seeing fewer patients and charging more but with less paperwork — while others are taking on higher-margin procedures that used to be done in hospitals. This, he added, means less income for the hospitals.

Patients and providers also need to pay more attention to outcomes, and getting the best quality care in the shortest period of time. The health-care system in the mid-1980s failed because all the companies did was to restrict access to care without enough focus on quality. Insurers could then reward the doctors who are following these guidelines, he said.

But legislating change would only create "guardrails" to keep people within the lines. This region is still lacking in the move toward consumer-directed care, but items such as Health Savings Accounts are starting to catch on. And smaller companies are waiting to see what happens at the bigger businesses going in this direction. Turpin is even hiring wellness specialists to work with his company's clients.

"Right now, our industry is in a sea of sameness," which will continue until someone sticks their chin out and makes real change, he said. "Everybody should have access to affordable care but the devil's in the details."

Find out more about what an HSA can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 08:51 AM | Comments (0)

February 19, 2007

Health Savings Account Reform Fringe Benefits

How will President Bush's health insurance plan which is heavily dependant on Health Savings Accounts affect taxpayers? The answer depends on if you have medical coverage, where you get it and how much it costs. The president wants to eliminate the tax code's bias in favor of employer-provided medical coverage, which distorts the insurance market, promotes insecurity and raises health care costs.

This bias was created more or less by accident:

- During World War II, businesses competing to attract scarce workers got around wage and price controls by offering health insurance instead of higher pay.

- In 1943, the Internal Revenue Service decided not to count this increasingly popular fringe benefit as taxable income, a policy codified by Congress in 1954.

According to John Goodman, president of the National Center for Policy Analysis:

- Someone in the 25 percent income tax bracket may receive a subsidy of close to 50 percent for employer-provided medical coverage, once you consider state income taxes and the 15.3 percent payroll tax that funds Social Security and Medicare.

- If he buys insurance on his own, he typically gets no tax break at all.

- The upshot is that most Americans get medical coverage through their employers.

In a system based on employer-provided insurance, people lose their medical coverage when they lose their jobs, a problem that becomes increasingly serious as they get older and sicker. At the same time, the seemingly free coverage makes health care more expensive for everyone.

Bush's solution to these problems is straightforward. He would reverse the policy of excluding health insurance from taxable income. To avoid an overall tax increase, he would give taxpayers with health insurance a standard deduction of $7,500 for individuals and $15,000 for families.

The benefits to taxpayers with a Health Savings Account would be enourmous. This would inject more competition in the health insurance system which would in turn reduce costs.

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 08:57 AM | Comments (0)

February 15, 2007

Are Health Savings Accounts Gaining Traction?

David Gratzer, a physician and senior fellow at the Manhattan Institute, writes in a guest commentary in the Wall Street Journal that, despite "critical" reports, Health Savings Accounts, introduced three years ago, are quietly gaining traction.

Health Savings Accounts, "which marry low-cost, high-deductible health insurance policies with pre-tax accounts" to pay for health care, have fallen on deaf Democrat ears in Washington, Gratzer writes. Why are Democrats uninterested in Health Savings Accounts?

This is partly due to a "slew" of reports that have dismissed Health Savings Accounts as "unpopular and harmful." But the reality is different from the one reflected in those reports, says Gratzer.

According to estimates, enrollment in HSA-type plans "more than doubled since January 2006," and now 13.4 million Americans are enrolled in them. Insurance company CIGNA reports that customers with an HSA incur costs that are 16 percent lower than enrollees in traditional plans.

A Kaiser Family Foundation survey finds that 71 percent of those with an HSA plan consider cost when choosing a plan, compared to 49 percent of those with "more traditional employer-sponsored coverage." Still, HSAs "can seem initially complicated," Gratzer admits, but he says that as more people enroll in them, the general public will understand them better and will be more likely to enroll in them.

Learn more about what a Health Savings Account plan can do for you today at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:10 AM | Comments (0)

February 07, 2007

Congress Did Good With Health Savings Accounts

This time three years ago, insurance companies began offering Americans a new type of medical coverage: Health Savings Accounts. But the anniversary is muted. A slew of reports have been critical, dismissing Health Savings Accounts as unpopular and harmful; and with the Democrats in control of Congress, Washington's enthusiasm for the concept has cooled.

Nevertheless, the Republicans should take credit where credit is due. The White House ought to build on the growing success of Health Savings Accounts, which are integral to the president's vision of "affordable and available" health care.

An executive of an upstart airline recently described her company as having three 757s, more than 200 employees, and one big headache: rising health-care costs. Thus, they made the switch to Health Savings Accounts in 2006, and premiums rose just 5%, compared with a national average of over 8%. Such successes aren't making the news, but overwhelmingly negative stories are. A much reported Commonwealth Fund survey, for example, concluded that enrollment in HSA plans is stagnant, people are grossly dissatisfied, and care is delayed. But the report was flawed on its face: For one, it was unrepresentative, drawn from a pool of "Internet users who have agreed to participate in research surveys."

Here's the untold story: Despite recent entry into the market, these plans are gaining popularity. Drawing on information from major insurance carriers, William Boyles, publisher of the Consumer Driven Market Report, estimates that enrollment in HSA-type plans more than doubled since January 2006, to 13.4 million Americans. The estimate is plausible, as last year twice as many employers offered this coverage than in 2005, and the number of financial institutions supporting HSAs tripled. Early data suggest good results.

Looking back on GOP-era Capitol Hill, welfare reform stands out as the greatest achievement, but Health Savings Accounts should be considered a close second. Except that Health Savings Accounts will eventually be universal, so they are far greater.

Learn more about what a Health Savings Account can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 11:21 AM | Comments (0)

February 05, 2007

Health Savings Accounts Could Help New Retirees Avoid Sticker Shock

Many future retirees will be on their own to purchase health insurance and going with a Health Savings Account might be their best option.

President Bush's plan to offer tax deductions to Americans who buy health insurance may or may not fly. But already there are millions of Americans grouped by names such as pre-Medicare eligible or "near elderly" who must grapple or will soon have to grapple with the issue of buying their own health insurance.

A recent study by Employee Benefits Research Institute (EBRI) noted that adults ages 55 to 64 were in 2005 one of two groups most likely to have health-insurance coverage. Just 13.6% or some 4.2 million presently were uninsured.

But future retirees may not be so lucky, according to EBRI. That group faces an increased likelihood of being uninsured if employer cutbacks to retiree health benefits affect them and they have no other means of getting health insurance. Plus, EBRI notes that the size of the uninsured population ages 55 to 64 will also grow as the baby boom generation ages.

Perhaps you are contemplating retiring before age 65? Or perhaps you are living in fear of being laid off before age 65? Or perhaps you retired -- either voluntarily or involuntarily -- before age 65 already and the issue of health insurance weighs heavy on your mind.

What do you do?

For those under 65 and not yet retired, there are two options. One, stay in the work force -- if health isn't an issue, but money is. In some cases, that may mean full-time, in other cases it could mean part-time (you can get health insurance if you work 20 hours at Starbucks, for instance). The other option is to purchase health insurance as a dependent in a spouse's plan.

"The options for pre-Medicare are limited and expensive," said Paul Fronstein, director of the health research and education program at EBRI. Others agree.

"The cost of health insurance for people who are not receiving coverage at work can be extremely high," said Steve Weisman, author of "Boomer or Bust."

Indeed, EBRI estimates that a person would need -- not factoring in the effect the President's tax break could have on making health insurance more affordable -- an estimated $51,000 to $193,000 to cover the cost of premiums during the 10-year period before becoming eligible for Medicare. And given those costs, EBRI predicts that more and more Americans will choose to stay in the work force.

"The erosion of retiree health insurance may ultimately change retirement patterns as employees nearing retirement age postpone their decision to retire upon learning that, without a job, they may not be able to obtain health insurance coverage or afford health-care services that are not covered by insurance," Fronstein wrote in a recent EBRI report. (Read the report at www.ebri.org.)

Options are limited

To be fair, staying in the work force is a good option, according to Rick McGill, a principal in Hewitt Associates' health management practice. For starters, it gives someone plenty of time to investigate all the options. "The most important thing to do is look before you jump," he said.

And the options are many, at least for those who are "insurable." At one end, those who may not have a lot of time to plan can always purchase health insurance through their employer under COBRA for 18 months after leaving the company. While that's not a long-term solution and it can be very expensive, it does provide some breathing room.

Another option available is a Health Savings Account (HSA), which offers the pre-Medicare crowd the chance to purchase a high-deductible health insurance plan as well as save money in a tax-deductible IRA for health-care costs, could prove a good option -- at least if they can afford the premiums and the contribution to the HSA.

Weisman also said the pre-Medicare crowd might consider working with an independent insurance broker who may be able to find the "most appropriate" health insurance program for them. HSA for America would be an ideal insurance broker if you are looking at Health Savings Accounts.

"Coupled with this, they may wish to take advantage of the HSAs, which are a particularly good choice if your health-care needs are such that you are relatively healthy and do not anticipate needing to use your health insurance much during the year," he said.

Still, those who have designs on retiring early, before age 65, will be in for some sticker shock. But owning a Health Savings Account with a high deductible health insurance plan can ease some of that shock.

Posted by Wiley Long at 10:21 AM | Comments (2)

February 01, 2007

Make Health Savings Accounts an Option

As Congress returns to work amidst even greater political divisions, potential areas for compromise will be at a premium. No public policy area is more important or more in need of reform than the nation's health-care system. By slightly redesigning an existing public policy tool -- personal Health Savings Accounts, or HSAs -- not only could America's health-care system greatly benefit, but both political parties as well.

Health Savings Accounts are the most unfortunate victims of the current political polarization. They offer several attributes notably absent in our current health-care system: individual choice and flexibility, plus wider systemic benefits through the greater injection of economic incentives. Yet opponents have objected saying such accounts will raise rates by removing the healthy, wealthy and young from the traditional health insurance pool.

One way to resolve the debate would be to take direct aim at opponents' criticism and tailor personal accounts to help the sickest -- those individuals with on-going medical conditions.

While an April 2006 poll by Zogby International showed just half of respondents had heard of personal health-care accounts, they are not new. Around since 1997, they were greatly expanded in 2003 with 3 million Americans now owning and almost 1,100 banks offering them today.

Any individual with a qualifying health insurance policy (with a deductible of at least $1,100, or $2,200 for a family) can contribute up to $2,850 ($5,650 for a family) to an HSA.

What does this mean for individuals? It means that a person can purchase health insurance at a more affordable price -- because a lower premium results from a higher deductible -- and then deposit up to $2,850 for individuals or $5,650 for families into an account they own.

When they have medical expenses, they take the money out of their account -- far simpler than conventional insurance.

And the individual benefits from four economic advantages:

· First, the individual creates the account with pre-tax dollars.

· Second, the account balance benefits from compounding interest.

· Third, these account earnings are not taxed, as long as they are used for qualified medical expenses.

· Fourth, the account isn't linked to a job -- as is employer-provided insurance -- because the individuals own the account and can take them when they switch jobs.

Proponents now need to take the next step and qualitatively change the terms of debate. They should design an HSA specifically for individuals with an on-going medical condition.

Design would not be difficult. People with diagnosed medical conditions requiring permanent or prolonged care -- such as diabetics or HIV-positive individuals -- would qualify. Substantially larger contribution levels would be allowed, encompassing not just deductibles but out-of-pocket expenses as well.

These higher contribution levels could be based on individuals' past treatment experience. By increasing contribution limits for these people, account balances would be more likely to grow and offset their expected higher future expenses as they age.

HSAs give people both the incentive and the means to manage their health care needs now and in the future. Furthermore, if opponents are correct that removing the healthy, wealthy and young from the insurance pool will raise rates for those remaining, then using HSAs to remove these high-cost individuals from the insurance pool should likewise reduce the cost of general health care insurance premiums. That would further reduce the ranks of the uninsured by increasing health insurance affordability.

There are also strong arguments outside the health policy arena. Morally, individuals alone should have the right to make their health decisions -- not insurance plan procedures or government mandates. Additionally, every other sphere of American life is rushing to personalize products for consumer individualization.

HSAs offer the greatest opportunity for individual health-care choice and people with on-going treatment requirements have the greatest need for such a product.

Washington needs to show it can work across the political spectrum to achieve solutions. Properly designed, personal accounts will work for anyone and they represent the best hope for a more rational health-care policy. It is imperative that health policymakers make them work for those people with on-going treatment needs.

HSA opponents should concede that additional choices can only help those most in need of help and test their own theory that altering the proportion of those with costly claims alters the cost of health insurance. And HSA proponents should grasp this opportunity for personal accounts and confirm their belief that personal accounts are health care's future.

Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:03 AM | Comments (0)

January 30, 2007

Statistics on Health Savings Account Pool

Early critics of Health Savings Accounts worried adverse selection of young, healthy workers would destroy traditional risk pools. Yet there is no evidence that Health Savings Accounts attract a disproportionate number of young people, says John Goodman, president of the National Center for Policy Analysis.

When adjusted for retirees who were not eligible, a recent Government Accountability Office (GAO) report of government workers found those joining HSA plans were about the same age as enrolling in more traditional plans.

Two additional GAO reports came to similar conclusions. A recent survey by the health insurance industry trade group found adult enrollees evenly distributed with nearly one-quarter between the age of 40 and 49 and one quarter above that age group and one-quarter below.

Time/Assurant Health (formerly Fortis) reported on its enrollees with Health Savings Accounts in 2005. It found:

- Nearly one-third (30 percent) had less than $50,000 annually in family income.

- About 44 percent had previously been uninsured shortly before obtaining an HSA.

- More than half (61 percent) were older than age 40.

- More than two-thirds (69 percent) were families with children.

A study in the Annuals of Internal Medicine found enrollee satisfactions is not related to quality. In fact, this phenomenon is not uncommon among consumer goods. Satisfaction is generally more closely related to good communication and met expectations, says Goodman.

Moreover, surveys where enrollees rate their Health Savings Account lower than managed care may be sampling unrepresentative enrollees or people who perceived they've lost benefits when switched to a full-replacement HSA plan. Or it may point to the need to have better consumer education about the merits and uses of HSA plans in addition to greater price transparency, says Goodman.

Source: John C. Goodman, "Statement on Consumer Driven Health Care: Testimony Before the Senate Health, Education, Labor and Pensions Committee," National Center for Policy Analysis, January 10, 2007; and "Who's Taking Advantage of Health Savings Accounts (HSAs)?" Assurant Health, 2006.

Posted by Wiley Long at 08:35 AM | Comments (0)

January 23, 2007

The Coming Health Savings Account Revolution

Millions of Americans have joined the Health Savings Account (HSA) revolution which allows individuals to manage some of their own health care dollars through medical accounts they own and control. Through HSA plans, they are able to tailor their health benefits to more closely meet their own needs, thus profiting from being wise health care consumers, says Devon Herrick, a senior fellow with the National Center for Policy Analysis.

A further benefit of HSA health plans is that when patients control more of their own funds, many will demand new and better services. Increasingly patients in HSA health plans can:

- Check information on medical treatments and physician prices online.

- Seek out innovative medical providers like walk-in retain clinics, and physicians that offer e-mail or phone consultations.

- Work with Internet-based disease management programs that e-mails updates to an attending physician.

- Compare drug costs and therapeutic substitutes online in search of a better deal.

- Adopt health behaviors based on incentives from health insurers and compare hospital quality benchmarks prior to surgery.

The health care marketplace is just beginning to meet these challenges. Innovative health plans which utilize an HSA can facilitate many of these new services as a way to attract empowered patients, says Herrick.

Learn more about Health Savings Accounts at http://www.health--savings--accounts.com

Posted by Wiley Long at 09:12 AM | Comments (0)

January 17, 2007

Health Savings Accounts are Part of the Answer to the Healthcare Crisis

There are some serious problems in America's current health care system. No one can argue that point. However, our politicians seem to have a difficult time acknowledging the real problems we face. For some reason, Washington thinks that our only health care problem is the number of uninsured, and once that's fixed then everything will be fine. Just give every citizen health insurance and the healthcare problems will vanish. Unfortunately, that is just not the case, but Health Savings Accounts can help.

What Washington doesn’t realize is that there are numerous problems facing those of us who have insurance, and those problems should be addressed first before insuring everyone else. Otherwise, you just add to the problem. Why give someone faulty health care. So I have included a few tips, in simple terms for our politicians, on how to fix America’s healthcare. First, the little things:

Ban drug company advertising for prescription drugs. This was a huge mistake by Congress. Why do people need to know about prescription drugs? Isn’t that what doctors go to school for? It may seem like a good idea on the surface, but what it does is create unnecessary visits for things that aren’t necessarily problematic. For example, a recent commercial says "talk to you doctor if you’ve ever had problems sleeping". Well, who hasn’t had problems sleeping? Now, patients are making appointments for things that aren’t pathologic but are rather normal human variations in health. The result: costs go up and access to care goes down. Not to mention the fact that drug companies are better spending this money on other things like research and development.

Impose strict malpractice reform. Trial lawyers must be reigned in. They are out of control and they are ruining our healthcare system. The fear of being sued among physicians is driving us to practice defensive medicine. Labs, tests and scans are being ordered mainly as cover, even when they aren’t exactly necessary. This drives up costs. And since it’s usually the lower socioeconomic class that tends to be sue happy, they obviously can’t afford the extraneous tests, and the cost gets passed to other consumers. Plus, malpractice insurance is becoming too expensive and it’s driving physicians out of practice, thus increasing demand for care and limiting access. We need to impose caps on damages and harsh penalties on plaintiffs attorneys who file frivolous suits, including forcing them to pay ALL court costs (including the defense) for any suit they lose. Do this, and malpractice lawsuits will drop substantially.

Stay away from socialized medicine. This simply doesn’t work in a capitalist environment. It’s way too expensive and will bankrupt the federal government. What would happen if healthcare were free for everyone? Long lines, poor quality, limited access and huge taxes. It’s not the answer.

Keep Health Savings Accounts. Luckily, Congress passed this before disbanding. Basically, this allows people to save money, untaxed, for healthcare reasons while purchasing a high-deductible health insurance policy for the big costs. It’s a great idea and I hope the new Congress doesn’t sink it.

Lower taxes on corporations. We have free trade with many countries. The problem is that the taxes here are higher for corporations than they are oversees. The result is the outsourcing of jobs and the loss of health coverage. In order for free trade to work for us, we need to lower corporate taxes to attract more international business and keep domestic business here. That means more jobs are created and more people are insured.

Allow small business to pool their resources and purchase large corporate policies for their employees. Why hasn’t this been done yet? Likely because the insurance lobby is awfully powerful. Small businesses simply don’t have the income to provide quality insurance for their employees, mainly because purchasing plans for a dozen people is too expensive. The larger companies get discounted care because they bring in more customers. It’s not exactly fair, but that’s how private insurance works. Hey, they have to pay their own bills. So, why not let small businesses come together under one plan? Where is the hangup here?

Allow physicians to practice concierge medicine. Dr. Vic Wood of West Virginia offers patients unlimited primary and urgent care for $83 a month. UNLIMITED. This doesn’t cover hospitalizations, medications or specialist care, but at least it’s something. It certainly beats an $800 ER bill for a sinus infection. Doctors can do this and still make a living, and it helps ease the uninsured burden. Similar plans can be found throughout the country. The Family Practitioners have found a way to help people who need help. So what’s the problem? Well, in some eyes, this amounts to operating as an illegal insurer. Who’s complaining? The insurance companies. This method eliminates the middle man thereby taking away from insurer profits. So they have to respond with lower rates themselves. Such is the world of free enterprise and healthy competition. It’s good for the consumer. But the insurers are winning the fight and many docs are not able to provide this service for legal reasons. In fact, insurance companies are pressing state legislatures nationwide to impose regulations on these retainer fees that private docs charge. This must not be allowed. People need the care, so what if it means the private insurers have to work a little harder to compete with the docs. It’s about time we gave doctors the upper hand and more say in American healthcare.

Learn more about what a Health Savings Account can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 08:37 AM | Comments (0)

January 11, 2007

Voluntary Insurance Complements a Health Savings Account

A growing number of consumers believe Health Savings Accounts (HSAs) offer the right prescription for comprehensive health coverage. A recent survey of 1,000 Americans suggests potential growth for HSAs, providing more Americans become aware of the new accounts.

Because an HSA may require time to grow to pay out-of-pocket expenses, consumers will sometimes turn to other types of insurance to supplement an HSA. For some, voluntary insurance policies are the missing piece in their coverage.

Voluntary insurance policies can help strengthen primary health plans by providing cash benefits directly to the policyholder to cover out-of-pocket costs such as deductibles and loss of earning power.

Supplemental Accident Plans offer HSA-compatible coverage that can benefit a consumer in a number of ways, such as:

• Alleviating concerns that the HSA may not have enough money to cover out-of-pocket expenses such as deductibles, co-payments and other costs

• Giving the policyholder the option of not dipping into the HSA, thereby maximizing its benefits and allowing the account to grow for future needs

• Providing money that is paid directly to the policyholder, enabling him or her to choose how best to use it (e.g., living expenses such as mortgage, etc.)

• Improving employer relations and retention.

Even when medical expenses are covered through an individual's medical plan, loss of income and non-medical expenses can have a major financial impact. Regardless of major medical coverage, Supplemental Accident plans provide money paid directly to the policyholder to use any way he or she chooses.

Experts say voluntary insurance policies may be used to supplement the missing indispensable piece of a Health Savings Account.

Posted by Wiley Long at 12:55 PM | Comments (0)

January 07, 2007

2007 Predictions for Health Savings Accounts and Health Care Benefits

Expecting new regulations and an increasing need for cost control to lead to greater employee responsibility for choosing and financing benefits, Watson Wyatt has released the following health care benefit predictions for 2007:

- Increased focus on high-deductible health plans (HDHPs) coupled with Health Savings Accounts. One-third of large employers surveyed by Watson Wyatt plan to incorporate an HDHP with a Health Savings Account in 2007. However, few employers appear to be completely replacing their current plans with a Health Savings Account.

- More benefits information and tools online. Web-based systems allow employees to model the best choices for them, and many allow plan participants to pick the best provider by reviewing online report cards grading the quality of care.

- Moving beyond mandatory generic prescription drug plans. As more popular prescription drugs come off patent in the next three years and their prices are reduced, employers will loosen their requirements that employees use generic drugs whenever possible.

- Greater integration between health care and absence management programs. Coordinating such programs will grow in popularity as employers seek to improve employee health and productivity.

- More on-site clinics in the workplace. To ease access to appropriate health care, more and more companies will open on-site clinics.

Visit http://www.Health--Savings--Accounts.com for more information.

Posted by Wiley Long at 09:57 AM | Comments (0)

January 03, 2007

Health Savings Accounts Taking Hold

Unbridled health-care costs are partly responsible for the fact that the number of uninsured in the U.S. now tops the population of Spain. It is also why many companies are turning to "consumer-directed" or "consumer-driven" health plans such as Health Savings Accounts, says Brett Brune in the Houston Chronicle.

Here are his findings:

- A recent Mercer survey of 3,000 U.S. employers showed that the number of Health Savings Account plans tripled in 2006.

- They reduce the annual cost per employee by about $1,000, compared with a managed-care plan such as a PPO or an HMO, Mercer's data show.

According to Steve Swanson, a principal at Mercer Health & Benefits, smaller employers have been the first to catch on, mainly because they tend to be the most affected by health care cost increases.

But larger employers are beginning to take notice now as well. Houston's largest, the Houston Independent School District, has offered two Health Savings Account options for the last three years, with excellent results:

- Before the consumer plans were added, HISD's annual heath benefit cost per employee was about $5,500.

- At that time, it had predicted the annual health benefit cost per employee would rise above $7,000 in 2005.

- But as a result of the change to HSA plans, cost per employee was only about $5,770 this year.

Learn more about Health Savings Accounts at http://www.health--savings--accounts.com

Posted by Wiley Long at 10:29 AM | Comments (0)

December 14, 2006

Health Savings Accounts The Cure for Health Insurance

One of the problems with American health care, as David Gratzer notes in "The Cure," is precisely a payment system that takes the patient out of the equation. In the early 1960s, the average American paid out of pocket one of every two dollars that he spent on health care; today the figure is one dollar in seven. The inevitable effect is hugely wasteful spending and inflated hospital bills. In fact, per-patient costs have gone up almost exactly in inverse proportion to the share of spending borne by the consumer. Can Health Savings Accounts be the answer to these problems?

About 10 years ago, I broke my leg skiing. After I came out of surgery, with a cast stretching from my ankle to the top of my leg, an orderly asked me whether I had ever used crutches before. I hadn't, so he showed me what to do, swinging through them from one end of the room to the other. The whole lesson lasted about 90 seconds. When I got my hospital bill, I saw that I had been charged $150 for "gait training on crutches." I did what all insured Americans do: I forwarded the bill to my insurance company. Why should I care? I wasn't paying for it.

Since then, I have purchased a Health Savings Account and my whole attitude toward healthcare has changed. Dr. Gratzer cites a remarkable Rand Corp. study that tracked health-care spending by 2,000 families over eight years. The families who got free health care spent 40% more than the families with cost-sharing arrangements. And yet the health outcomes for the two groups were the same. The lesson: Market-based health insurance systems, such as Health Savings Accounts, cut out inefficiencies and lower costs without compromising quality.

Find out more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 08:58 AM | Comments (0)

December 01, 2006

Future Policy for Health Savings Accounts

Since the November 7th elections have insured yet another narrowly balanced Congress next year, issues where political compromise could be forged will be at a premium. No public policy area is more important or more in need of reform than the nation's health care system. The retooling of an existing public policy tool -- personal Health Savings Accounts, or HSAs -- could pay great dividends to all the participants in America's health care system, as well as to both political parties.

Health Savings Accounts are the most unfortunate victims of the current political polarization. They offer individuals choice, flexibility, and freedom and also wider systemic benefits through the greater injection of economic incentives into America's health care system -- an area where all are notably absent. However, opponents have objected, saying Health Savings Accounts will only be used by the healthy, wealthy and young. One way to move the debate forward would be to take direct aim at opponents' criticism by tailoring personal accounts to help the sickest -- those with ongoing medical conditions.

For proponents, HSAs' flexibility, simplicity, and portability make them popular and the 3 million Americans now owning -- and the almost 1,100 banks offering -- HSAs agree. Critics respond that, by removing the healthy, wealthy and young from the traditional health care pool, rates will rise for those remaining.

In this rhetorical fight, proponents overlook their fundamental advantage. HSAs are a concept as well as law. When the concept is constrained by the law, it is the latter that needs to change. Proponents' best course for doing this is not simply quantitatively changing the terms of debate by adjusting qualifying policies' deductibles and individuals' annual contribution limits -- though decidedly good -- but qualitatively changing it. Proponents should therefore design an HSA specifically intended to aid individuals with an on-going medical condition.

Designing such a special account would not be difficult. People with diagnosed medical conditions requiring permanent or prolonged care -- such as diabetics or HIV-positive individuals -- would qualify. Substantially larger contribution levels would be allowed, encompassing not just deductibles but out-of-pocket expenses. These higher contribution levels could be based on the higher of individuals' past total expense experience or a multiple of their plan's deductible. By increasing contribution limits, account balances would be more likely to grow and these would offset the expected higher future expenses as these individuals age.

Properly designed HSAs would work for such individuals and for overall health policy. People with on-going health issues need to be participants in their own care. They must be managers, not simply patients. Many areas -- diet oversight, treatment regimens, testing, and more -- are things that medical professionals can't do at all, much less alone. HSAs give people both the economic incentive and the means to manage their health care needs now and in the future. Furthermore, if opponents are correct that removing the healthy, wealthy and young from the insurance pool will raise rates for those remaining, then using HSAs to remove these high-cost individuals from the insurance pool should likewise reduce the cost of general health care insurance premiums. That in turn should further reduce the ranks of the uninsured by making health insurance more affordable.

There are also strong arguments outside the health policy area for allowing those with ongoing treatment needs. Morally, who can deny the individual alone should have the right to make their health decisions -- not an insurance plan's permissible procedures or a government's mandated benefits? Additionally, every other sphere of American life is moving to personalizing products for consumer individualization. HSAs offer the greatest opportunity for individual health care choice and people with ongoing treatment requirements have the greatest need for such a product.

In the coming Congress, the narrowly separated parties will need to show they can work together to achieve solutions. Properly designed, personal accounts will work for anyone, and they represent the hope for a more rational health care policy. It is therefore incumbent that health policymakers find out how to make them work for those people with on-going treatment needs. Opponents should be willing to concede that additional choices can only help those most in need of help and to test their own theory that altering the proportion of those with costly claims will alter the cost of health insurance. And proponents should be willing to grasp this opportunity for personal accounts. If personal accounts are in fact the future, it shouldn't matter where their successes occur.

Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:01 AM | Comments (0)

October 13, 2006

Wal-Mart Putting Health Savings Accounts to the Test

For years, proponents of consumer-driven health care and Health Savings Accounts have argued that making individuals responsible for spending decisions would slow the sharp rise in medical costs. Personal responsibility combined with greater price transparency and pricing information should help bring down rising healthcare costs. Wal-Mart Stores Inc. is in the process of conducting a massive test of these claims. Will Health Savings Accounts work at Wal-Mart?

- The Bentonville, Ark., retailer announced late last month that as of Jan. 1 its primary health-insurance offering for new hires will be a high-deductible health insurance plan with premiums as low as $11 per pay period in some areas.

- After employees are enrolled in Wal-Mart's coverage for a year, they can pair the high-deductible plan with a Health Savings Account, which provides them a tax-free method of setting aside their own money -- plus a contribution of up to $2,400 from Wal-Mart -- for medical expenses.

- The new offering quickly will become the dominant coverage among Wal-Mart's 1.3 million U.S. employees, considering that the average annual turnover rate in the U.S. retail industry is 80 percent for full-time workers.

- Employees hired before Jan. 1 can retain their older coverage plans, which offer lower deductibles for higher premiums.

Wal-Mart says the new plan, called the Value Health Plan, will save money for most of its employees. More than half of its covered associates didn't spend enough last year to exhaust their deductibles, yet they had to pay premiums higher than those in the Value Plan.

Wal-Mart said that the low-premium, high-deductible plan makes its coverage affordable for more of its employees. Also, Wal-Mart this year shortened the eligibility wait time for part-time workers to one year from two and allowed their children to get coverage.

Find out more about Health Savings Accounts and how they can help you reduce your healthcare costs at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:47 AM | Comments (0)

October 03, 2006

Mainstream Media Mischaracterizes Health Savings Account Effects

A Commonwealth Fund study in the July/August issue of Health Affairs found high-cost patients with Health Savings Accounts (HSAs) spend less out-of-pocket money than they would under traditional health insurance plans. A Bloomberg wire service story treated this as a newsworthy discovery of a "flaw" in the HSA design, since if less is spent out-of-pocket, incentives to conserve costs under HSA plans must be weaker.

There is no news here, and there is no flaw...

HSA type-plans have been on the market for a decade in the United States and for more than a decade in South Africa. Everyone familiar with the plans knows they typically lower out-of-pocket expenses for high-cost patients. This fact is not only well documented, it has been hashed over in the trade literature, at health care conferences, and in numerous think tank reports, including studies by the RAND Corporation, Urban Institute, National Bureau for Economic Research, and National Center for Policy Analysis.

Seeking Consumer Pain

The only people who will find this recent "discovery" surprising are HSA critics who have been saying for years that HSAs would harm the sick, especially the chronically ill, and who (despite being quite vocal) tend to have very little familiarity with actual products on the market.

Far from this being a "flaw," most Health Savings Plans are an improvement over traditional insurance, which has co-payments (sometimes without limit) for expenses over which patients exercise no discretion (such as inpatient hospital costs). Most HSA plans, by contrast, allow patients to manage health care dollars for expenses over which they can exercise discretion and where it is appropriate for them to do so.

Here's a news flash: The goal of HSA plans is to allow patients to manage their own health care dollars, not to see how much financial pain we can make them suffer.

Learn more about the reality of Health Savings Accounts by visiting http://www.health--savings--accounts.com

Posted by Wiley Long at 09:01 AM | Comments (0)

October 01, 2006

Health Savings Accounts Give Business Owners Insurance Options

Many small business owners face the same quandary when it comes to health insurance for their employees: With one or two employees struck with prolonged, costly illnesses, they face monstrous spikes in the cost of health care.

Joe Knight, co-owner of Ogden-based Setpoint Cos., is one of those business owners. He turned to an option that is becoming increasingly popular - ditching the traditional health insurance system in favor of a Health Savings Account (HSA), paid in part by the employer and, depending on the plan, in part by the worker.

"I was surprised to find that the Health Savings Account option was far better financially for all of my people, even my employees with medical situations," he told a Senate committee earlier this week. "Now that we are nearly through our second year with an HSA, everyone is happy with the change."

The accounts are tax-free and tied to HSA-qualified health plans with high deductibles. Policyholders pay up front for doctor visits, prescriptions and trips to the dentist from the accounts. Unlike flexible-spending accounts, any unused money rolls over from year to year.

High deductibles - they start at $1,050 per person and $2,100 per family - keep the policies cheap and, as a result, employers can afford to pay more of an employee's premium or finance a portion of the accounts. Annual out-of-pocket expenses are capped at $5,250 for an individual or $10,500 for a family.

Sen. Orrin Hatch, who chaired the hearing of the Senate Finance Subcommittee on Health Care, is sponsoring legislation aimed at offering incentives and expanding the savings accounts.

The Utah Republican argues that giving workers a health savings account to pay health costs makes them more active participants in choosing their medical care, encouraging them to seek out better deals and save their money, something they can't do with traditional employer-provided coverage.

"The economics of it works. The practicality of it works, too," Hatch said. The cost of medical care will come down "if we can get people to be concerned about the cost of their treatment."

Health Savings Accounts are also a key component of the Bush administration's health plan. Deputy Assistant Treasury Secretary Robert Carroll said consumers will make the most responsible choices when they have "more skin in the game."

The number of people enrolled in HSAs has grown, from fewer than a million in March 2005 to nearly 3.2 million in January 2006, according to America's Health Insurance Plans, a national health-insurance trade association.

But Sen. Jay Rockefeller, D-W.Va., is not convinced that the savings accounts are the panacea that Hatch and others claim, and could actually harm lower-income or chronically ill individuals.

The accounts will primarily benefit those in higher income brackets and healthier workers, he says. Only about 4 percent of employer-sponsored health plans fell into that category, according to the annual report by the nonprofit Kaiser Family Foundation and the Health Research and Educational Trust that was released Tuesday.

"As healthier and more affluent workers shift to HSAs, older and sicker workers will be left in traditional employer-sponsored policies," Rockefeller said. "This type of adverse selection will drive up premiums for traditional employer-based coverage, further encouraging firms to provide less desirable coverage or to drop health coverage altogether."

Health Savings Accounts generally carry much lower premiums, but much higher deductibles. Research by the Government Accountability Office, Congress' nonpartisan investigative service, found that the average deductible was nearly six times higher in the HSAs than in typical plans.

The GAO also found that more than half of those who had signed up for Health Savings Accounts made more than $75,000 a year as of 2004. The average income was $133,000.

Learn more about HSAs at: http://www.health--savings--accounts.com

Posted by Wiley Long at 05:01 PM | Comments (0)

September 27, 2006

Health Savings Accounts Needed to Change Medical Mindset

For a fresh analysis of health care, people ought to look to economist Arnold Kling's new book, Crisis of Abundance. Although it offers no easy villain-versus-hero narrative or solution to the challenges of funding health care, it diagnoses the problem with precision.

The perfect health-care system, Kling argues, would achieve three goals...

It would offer unfettered access; people could receive all the care they needed when they needed it. It would insulate people from extreme health-care expenses. It would be affordable for society as a whole, meaning that health spending wouldn’t sacrifice other public and private needs.

We can’t have all three of these goals. No country or economy can. Socialized systems provide insulation and achieve affordability at the expense of unfettered access.

In Canada, the average wait to see a specialist is 17 weeks. The newly-elected president of the Canadian Medical Association told the New York Times, “This is a country in which a dog can get a hip replacement in under a week and in which humans can wait two or three years.”

The U.S. health-care system mangles these goals. For example, most people are insulated and, compared to most countries, have unfettered access to expensive medicine. The average person consumes more than $5,000 worth of health care but spends only $1,029 out of pocket.

This insulation from transparent expenses and access pushes total health spending up. Individuals pay in reduced salary. The insulation makes the insurance more expensive, thereby causing employers to drop insurance and individuals to elect not to purchase it. Eventually, we will all pay in increased taxes to support Medicare and Medicaid.

While no perfect solution, there are sound ways to address the issue. The first is honesty. If we want top-tier health care, it will be costly. The question is how to pay. Advocates of greater pooling must confront and quantify the increased taxes or rationing that such programs would necessarily entail.

A better approach is to put the insurance back into health insurance with high deductible plans that allow for long-term insurance protection. While we are young and healthy, most of us will self insure and accumulate money in health savings accounts. When we grow older and need more care, we will have a combination of private money and insurance to insulate us from the devastating expenses of modern medicine. The very poor will be taken care of collectively through Medicaid.

An individual’s spending on health care would be transparent under such a system, rather than obscured as it is today. Access would remain unfettered. Most important, people would be insulated from devastating medical expenses.

The biggest obstacle to this transformation is the American mindset, which views health care as something that should be free. For Americans to truly manage health-care expenditures, we must see it as akin to other life necessities, food, housing, clothing, and transportation. The truly needy are provided for collectively, through government programs. The rest of us, must budget for routine expenses and insure against catastrophe.

Go to http://www.health--savings--accounts.com to learn more about Health Savings Accounts

Posted by Wiley Long at 08:56 AM | Comments (1)