I would call my own health insurance situation not too representative of national trends – in a very progressive state working for a large health system, and personal changes make a year-to-year comparison difficult. But my employer’s definitely moving in the high-deductible direction – unfortunately the HSA option seems pretty weak. Aside from the tax benefit of paying up to the deductible/copays/coinsurance through the HSA, there’s very little savings on the premium (most of it paid by the employer in either case). I think insurance companies could really be doing a lot more to make them attractive, and I have to wonder why, if it’s such a beneficial alternative, they haven’t been.

“You mean like maybe the individual deciding that a visit to a good primary care doctor for shoulder bursitis and hypertention might be cheaper than a visit to a cardiologist for blood pressure and a separate visit to an orthopedist for bursitis?”

More what I’m getting at is that people put a premium on having a stable relationship with a provider they trust, and while you set up an excellent comparison where seeing some real costs could steer someone towards the more sensible alternative, it seems like more often than not people would prefer to establish one solid doctor-patient relationship and ride that out rather than continually shop around. Cue all the “between my doctor and me” sign waving and shouting. So aside from the type of comparison you gave us, and maybe that’s more common than I personally suspect, I remain skeptical how much of an effect this shopping-around could have. Patients feel a strong need to develop a trusting relationship with a provider, and price-sensitive behavior would seem to act counter to that. There’s a balance in there somewhere – some price competition being better than none – but I just haven’t seen any thoughtful estimate of where this type of change might take us.

And even with all the lengthy postings, I wouldn’t consider anything you’ve written to be “hype” – the info on HSAs has been informative and even-handed. I just really don’t see huge gains coming from widespread adoption, absent some breakdown of total healthcare costs with regard to price elasticity. Would it help? Absolutely. Just no magic bullet like some would seem to want it to be.

-g

It is also one of the few medical procedures where price has gone down.

Anthem lowered 2009 premium on their HSA-compatible HDHP products. Mine stayed the same. Traditional low-deductible PPO’s went up. How did yours do?

>>How do the dynamics of that relationship change when you try to make consumers more price sensitive?

You mean like maybe the individual deciding that a visit to a good primary care doctor for shoulder bursitis and hypertention might be cheaper than a visit to a cardiologist for blood pressure and a separate visit to an orthopedist for bursitis? Doesn’t matter if it’s a HMO with a ten dollar copay. It does matter when the first five grand of expenditure is under your control.

I am in primary care, I don’t feel threatened. Others want to use the power of government or large insurance to impose “gatekeepers” or “medical homes” on people and force them to see the pee-cee-pee.

I’d rather let the quality of my practice attact people, but that’s just me.

Chemotherapy and other big-ticket items, as opposed to routine medical services…….

The USA spends more on management of incontinence than we spend on renal dialysis and coronary bypass put together. Don’t underestimate the collective effect of the small savings on routine medical care.

Personally, I’m not trying to “hype” HSA’s as much as I’m trying to deal with ignorance so profound I have a hard time believing it’s anything but deliberate ignorance. Ultimately, I agree, let’s see how it actually shakes out. Data from the past five years look promising, lower premium rates and all that. Probably why I see what is either deliberate ignorance or deliberate lies, in an effort to kill it off and impose an irreversible “public option”.

Not all health care costs will respond to price variability the same as others. Some things, people can and will shop around for (preventive care appointments, some elective surgeries). Others, not so much. The things that are difficult or even impossible to price-compare are going to be the bigger-ticket expenditures, and a course of chemotherapy can be a MUCH bigger ticket than an annual physical. So I’m curious what effect price-shopping consumers are expected to have on overall health care expenditures. Even if everyone saves $50-100 annually by shopping around for routine care, maybe a good chunk more for an elective knee replacement or something, that’s kind of a drop in the bucket compared to the really expensive things. How much would costs really drop?

I agree with the concerns about some health care consumers overlooking routine or preventative care to avoid spending that money. You also need to look at the effect that “price wars” would have on the segments of the market that would see the most price shopping. Seems like most primary care physicians already feel pretty squeezed – overworked and underpaid. Do we really want to look for more cuts there? You’ve also got the issue of the traditional doctor/patient relationship where the doctor is acting as a gatekeeper of sorts and advocating for the best interests of the patient. How do the dynamics of that relationship change when you try to make consumers more price sensitive?

I also wonder about the kind of market segmentation that could happen given that certain procedures and therapies are likely to be more profitable than others (see: Lasik). It might be extreme, but I imagine boutique healthcare providers who do more elective and well-paying things like stenting, joint replacements, etc. and skim off the cream of the crop, so to speak. If the “money” cases are being pulled out of the pool like that, is that dangerous to a larger multi-disciplinary center that could use that revenue to support caring for more challenging cases and sicker patients?

Also, while I see how HSAs can exert some pressure on healthcare prices, implementing them doesn’t really expand coverage in any way. At any rate, I don’t see why HSAs and universal coverage need to be viewed as mutually or even partially exclusive. Couldn’t even a public option adopt concepts from HSAs?

-g

Thank you. I want people to have their healthcare paid for.

We may disagree on how to get there. I really, sincerely, do believe CDHC is the best way to get there, and the data is pointing in that direction. It is, unfortunately deliberately ignored from the left. If I turn out to be wrong (I doubt it), CDHC is reversible. It’s just a PPO with a high deductible and tax-favored savings. A single-payer system, a Medicare, there’s no turning back. Hence, the tea party types, who are as angry with the Republicans as they are with the Democrats.

My employees, by the way……..you know COBRA and all that. Ever get a patient between jobs, develops a medical problem and has no insurance? Maybe there were two months between jobs, the patient took the gamble and lost?

“Why didn’t you COBRA your previous insurance?” Well, you know the answer. “$1,500 bucks a month premium and I don’t have the money, and I’m unemployed.”

My employees have HSA’s and a HDHP. They can COBRA their HDHP for about $200 a month individually, $500 for family coverage. And it gets better. If they have HSA savings, they can pay premium with HSA savings if they are unemployed.

I don’t pay family coverage, I’m not that good. But they can pay into insurance for family coverage, it works out to about five grand extra a year, but about two or three grand is the HSA, which they keep if they have a good year.

It’s not perfect, but it’s a serious step in the right direction.

I am distressed at how many small businesspeople I run into. Restaurants, coffee stands, hairdressers, etc. They often have the catastrophic coverage, and complain they have no coverage for the smaller stuff (like me). I tell them about the HSA’s. They already have the catastrophic coverage, essentially the HDHP. For Pity’s sake, just go to the insurance broker, make sure you have a properly recognized HDHP. Go to the bank, open the HSA. You have a good year, contribute. You have a bad year, work off savings if you need to. That’s what I’ve done, revenue is off because of the economy. Gotta make payroll. But I have HSA savings, so I can cut back contributions. Under traditional insurance, I might have stopped insurance altogether.

I’m chagrined how many small business people don’t know about HSA’s. A light bulb goes off. I’m not playing insurance agent, they usually have put aside savings for the high deductible and expected medical expenses. I am just pointing out they might be able to get a tax break for the money they have already saved. “Now I’ll shut up and take care of your blood pressure.”

My personal philosophy, I’m a free enterprise small business supporter in the Robert Bartley mold. “Down With Big Business” was an editorial pointing out that big business engages in rent-seeking and can be as socialistic as any left-wing government. A strong middle-class is needed for a strong free country.

A couple months ago, I ws invited by the Chamber of Commerce to give a talk at some sort of business benefits meeting. I couldn’t keep my mouth when the subject drifted to HSA’s. Maybe I should accept their offer.

I don’t know if I’m talking past you, or if it’s just over your head. You made a specific remark about HSA’s, HDHP, and insurance “pools”…..remarks that are absolute nonsense.

Frugal: “……If you get rid of the insurance company, you get rid of that overhead [claims processing]……”

This is either deliberate ignorance, or a simply childish understanding of business. Claims are processed one way or another. Under Medicare [for all?], the claims are subcontracted to insurance companies. Administration does it’s bit to make the UK’s National Health Service the third largest employer on Earth.

I have no way of knowing what your state does or does not have. I know I see disability exams all the time, I ask patients who their doctor is, they say they can’t get health care because they don’t have insurance. “Do you know there is a public clinic a mile away that sees all comers on a sliding scale?” Blank look. What medicine do you take? “I’m supposed to get [the following] meds, but I can’t afford them because I have no insurance.” I went through the list. “Do you know you can get [the list of medicines the claimant showed me] every single one of these, for 40 dollars a year (ten bucks a quarter)….it was four diabetes and blood pressure medicine……that’s $160 a year for these medicines, and the sliding scale for the clinic fee. Or you can walk around with your sugars at 500.

Blank look. And I’m in a fairly decent small town. “Look, I’m not supposed to give medical advice at a disability exam, but I can’t keep quiet about this. Just ’cause you don’t have insurance doesn’t mean you can’t get health care. I don’t know you well enough, maybe $160 really is too much for you, but I doubt it (I point to the pack of cigarettes in the pocket), I’m not saying it’s easy, but you’re not even accessing the medical care that’s a mile down the road. I’ll shut up, because regulations say I’m not supposed to give medical advice.”

I figure I’m OK, I don’t think giving directions to the clinic and telling the person the pharmacy fee for metformin doesn’t constitute “medical advice”.

I don’t know what your medical problems are, and I’m sorry you have them. The problem with the high-risk pools are usually the same as with the individual markets. My insurance is kust through a state business association, I’m a member. The only underwriting is date of birth. Usually the problems with the individual market and with the high-risk stuff is the state has screwed them up beyond all recognition.

You give a long description of the HDHP’s not covering drugs. Maybe that’s the case in your state, though I doubt it. I know the drug coverage is an option in my state. Well……I pay for the option. I did turn down dental. I don’t think dental coverage is a good buy. Drug coverage is a different matter.

But het, I agree, that there will probably be a need for government intervention in some with very unusual, very catastrophic illnesses. I’m middle-aged, with a family, we have middle-aged medical problems, Mrs Ninguem has various female problems needing the usual surgeries, nothing out of the ordinary. Biggest hassle is the various providers freak out when we pull out a checkbook to pay for services. “What do you mean you don’t run it through insurance?”

And that IS a problem right now, though it’s slowly getting better. We need price transparency. To the extent we’re getting price transparency, it’s precisely because of HSA’s.

I’m all in facor of multiple options, fine with me. What I’m hearing from the left will take away all the options. Joe Wilson was right, Obama was lying.

And then D up and says “To me that makes as much sense as saying IRA’s mean that we can get rid of Social Security.”
Sheesh. Social Security is a Ponzi scheme. No industrialized nationwould create a retirement scheme like Social Security anymore. I’d love to get rid of Social Security. Replace it with private pensions combined with a private disability policy, we’d be better off. Not only would I be better off, the average working stiff would be better off. We have Social Security now, because we’re stuck with it.

Perhaps I am misunderstanding you? Your arguments in support of these plans seemed to me to indicate you felt they will save healthcare and negates the need for other reform. To me that makes as much sense as saying IRA’s mean that we can get rid of Social Security. But perhaps that’s not what you are saying?

Are you saying you think HSAs should be allowed to continue? If so we are in agreement.

PS: Good job paying for your employees health coverage. Employers who continue to do this are becoming a minority.

Again, deliberate ignorance. My HDHP is Blue Shield. I’m in a Blue Shield PPO. When I look for a participating physician, hospital, imaging center, lab, physical therapy, I look for the same Blue Shield as everyone else. If you get one of those crazy “rack rate” things where a service is charged ten grand but the insurance really pays five hundred, I’m repriced to the Blue Shield participating rate for……the medical service, the imaging facility, etc.

Same for an Aetna HDHP or a United Health Care HDHP, etc……

I would suggest you talk with an actuary to find out what a “pool” really means from the standpoint of people who really understand insurance. But from what you think a “pool” means, what is the difference between my Blue Shield plan and your own insurance?

My HDHP Blue Shield plan, which is a PPO with a larger deductible for certain services, covers up to two million dollars coverage of medical services…..minus the deductible of five thousand dollars and some change. A “traditional” PPO covers up to two million dollats coverage of medical services……minus the deductible of about a thousand. Four thousand, maybe forty-five-hundred dollars difference out of the risk of two million, and they are not at risk of paying that four thousand or so in smaller claims for a sore throat or hemorrhoid. The hemorrhoid and sore throat are far more likely than the claim dosting millions.

The actuaries price the policy accordingly. My premium check goes to Blue Shield. They invest the money with all the other premium checks they get.

So tell me again about this “pool” again….?

Out of the millions of dollars of risk, premium of thousands of dollars, where I did commit some social faux pas by accepting a higher deductible than my neighbor? The insurance agent offers a plan with some sort of HMO and copay option, or a PPO with a $250 deductible, $500, $1,000…….and about $5000 for a family HDHP, about $2000 for individual HDHP.

At what dollar figure did I pee in the pool and ruin it for society, letting people die in the street? For years, consumer advocates always say to get the highest deductible you can afford for my car insurance, homeowner’s insurance, etc. When did they violate the norms of social justice? Where is the deductible dollar figure?

A high-deductible health care plan with and HSA is run by a insurance company. Currently the insurance companies pay staff to process claims, CEO………….. the insurance company also costs the provider more money…filing claims, dealing with rejected claim………………You still have doctor contracts and networks……….. If you get rid of the insurance company, you get rid of that overhead. HDHP don’t eliminate the costs of the insurance companies.

Your HSA may sit in a bank with low overhead but you still have insurance after the deductible is met. I suppose if one just goes to the doctor and pays cash-and never files a claim against their deductible-everything is great. Once you involved the insurance company then you have to have someone file the claim against the deductible, someone has to process the claim………….

“BTW, with HDHP coupled with HSAs, they pay 100% after the deductible – typically around $2k per year but you can choose among several deductibles when you sign up.”

BTW, in the state I live, the $2K HDHP doesn’t cover medication and co-payment 10% after meet the deductible. The $2K deductible with drug coverage is limited to $3K in drug benefit and 20% after meeting the deductible. If pay for my medication at $5K and pay my premiums ($108 per month) I pay $6296 per year and all I have is medication. No doctor visits, nothing paid on my deductible. With a comprehensive plan with $500 deductible, a would pay $6130 per year. Premuims at $290 per month, medication (limit $3K), and 5 doctor visits at $30 each…….of course, no insurance company would offer me insurance, HDHP or otherwise…….so perhaps this is a mute point.

So perhaps I should give up Advair and switch to a no carbohydrate diet so an HDHP with HSA would work for me.