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This will be the 7th year since Health Savings Accounts have been available. We have seen a few different plan designs since inception but the principles have stayed the same.
The Health Savings Accounts in Indiana have been much more popular than other states. There are few theories on why this is but I think it has alotto do with price. When Health Savings Accounts were first introduced they had savings in 30% -45% range from a traditional plan. Now one has to realize just 7 years ago lower deductible type plans were much more common. So switching to an H.S.A and then using the savings from the old plan to fund your H.S.A custodial account was a easy decisions.
The HSA plan was the 2nd step towards developing consumer driven insurance products. The first was the Medical Saving Account. The HSA plan is a major medical policy which promotes consumerism be informing insured what the cost of medical services are. Since the insured is responsible for the deductible one becomes very aware of the cost of an office vistit, Brand name drugs, a trip to the ER and so on. These plans have really taken the first step in price war with health care provider. The best example of this is the drug prices between the pharmcies. When Walmart came out with the $4 generic its threatned the all the major pharmacies. The pharmacies have started to compete from a price standpoint. Another huge step for consumerism is when Anthem and United HealthCare came out with their own version of the price shoper for the HSA clients. This tool truly has show the cost difference from what a hospital charges and what an outpatient facilty charges.
As we enter the 4th quarter of 2010 the HSA is still a very popular choice with individual & small groups. These plans are even gaining traction with large companies.
For the individual health plan its by the far the best option. Why pay for benefits like a co pays that you might not use. A lot of people still say I don’t want to lose my co pays. The truth of the matter is when you see that primary care doctor you are still getting the network discount. That means those services are discounted anywhere from 35%-50%. So if you have a $100 office visit you might owe $50. When you compare the premium savings on an HSA it makes sense to go with that plan. The RX benefit is where there can be real issues. If you are on a brand name drug and there is no generic then you end up paying for the cost of that drug and it chips a way at the deductible. What people fail to realize is if you qualify for a individual plan with RX coverage the carrier will rate you up for that condition so you end up paying a much higher premium. When we compare the higher premium plan with the HSA plan and the cost of the drug there is a good chance the HSA makes more sense. The fact of the matter no mater what individual plan you are on the premiums are going to go up at renewal but you have a much better chance of getting a single digit rate increase on a HSA.
The HSA for the small group is still a very good option. If a group is going that route its very important to include a min wellness program and price comparison tools so that the employee can take an active role in their health care. Now in the small group market we have seen some problems with the H.S.A approach from cost stand point. 9 times out of 10 an HSA plan is a better plan than the current plan design. This is because the out of pocket for the employee can be much less than the traditional plan that has co insurance. So now an owner/controller is only seeing a 10% reduction in premium compared to the co pay plan that has 3 times the out of pocket. The other reason why we are not seeing huge savings on the small group HSA plans is claims. Once an insured meets their deductible they now feel all treatments are free. Even with this said the HSA is by far the best option for a small group health plan. Its one way that an owner can try to educate the employees on true health care cost while still proving the best coverage.
Large groups are starting to really entertain the HSA approach because of the consumer driven principles. Many large groups are now adding an HSA option to their cafeteria plan. Data that has been collected over the last 6 year on these type of plan are showing a significant savings from a claims standpoint.
If you are looking for a new health insurance plan you have to entertain the health savings account.
