The past year’s health care discussion has been remarkable for the narrow range of ideas and opinions that have floated down to the man on the street. Journalists have sought out the same organizations and sources for their stories, offering up what has become the conventional wisdom for reform. To bring more voices into the conversation, our series, Excluded Voices, will intermittently feature health care experts who aren’t on the media’s A-list of sources. (The entire series is archived here.) We want to offer journalists more options for their stories and encourage a deeper discussion. To that end, we’ve asked the experts featured in each post to respond to questions from Campaign Desk readers.
The Washington Post recently ran an utterly predictable and formulaic story about consumer driven health plans—those newfangled options that come with tax-advantaged savings accounts, and are, some would say, the future of American health insurance. Basically, policyholders shoulder more of their health care costs, relieving insurance companies from as much of the claims burden as possible. After getting beyond the requisite anecdotal lead, about a woman who is facing “steep increases in out-of-pocket expenses for health coverage this year,” we learn that employers are planning to shove more costs onto their workers. The consulting firm, Mercer, surveyed almost 2,000 large employers and found that 44 percent planned to make workers pay a higher portion of their health insurance premiums this year, up from 40 percent in 2008. Higher premiums often lead workers to clamor for lower deductibles. So there’s a need to understand just how these high deductible offerings work. To that end, Campaign Desk talked to comsumer-driven health plan expert Timothy Jost, law professor at Washington and Lee University and author of Health Care at Risk: A Critique of the Consumer-Driven Movement, published in 2007.
Trudy Lieberman: What do we mean by consumer-driven health plans?
Timothy Jost: It’s an imprecise term that means different things to different people. But at its core, it means an arrangement that transfers to consumers much of the responsibility for buying their own health care, just as they would buy cars or computers.
TL: How do the kinds of consumer-driven policies differ?
TJ: Health savings accounts, or HSAs, are savings accounts to which consumers or their employers can make tax-advantaged contributions. HSAs must be coupled with a high deductible insurance policy; in other words, a plan that covers catastrophic expenses. Consumers can use the money in the account to pay for medical bills they incur before they meet their deductible. Health reimbursement accounts, or HRAs, also come with a savings account, but only employers can make contributions. HRAs are usually linked to a high deductible policy, but they don’t have to be.
Balances in the HSA and HRA savings accounts can be rolled over from year to year. If you have an HSA and leave the job, you can take your money with you. If you have an HRA, the money usually stays with the employer.
TL: Are employers putting money into HSAs?
TJ: A lot of employers are providing high deductible policies. Some are contributing to the HSAs, and some are not. A study by the Blue Cross Blue Shield Association found that only 38 percent of consumers with HSAs received contributions from their employers in 2008, down from 45 percent in 2007. Other research shows that millions of Americans have high deductible plans, but no health savings accounts to help them pay for care while they are meeting the deductible.
TL: How high do these deductibles go?
TJ: The latest report from the Kaiser Family Foundation and the Health Research and Education Trust found that the average family deductible for HSAs offered by employers was almost $4000. Deductibles for policies with an HRA can be much higher, and sometimes are. But under the law, deductibles for tax-subsidized HSAs can not exceed the maximum amount a person has to pay out-of-pocket, which is $5,800 for individuals and $11,600 for families.
TL: What’s the rationale behind these high deductibles?