Category Archives: HSA

Replace the ACA with What??

Take Two Aspirin

It’s pearl clutching time for the opponents of the Affordable Care Act and Patient’s Bill of Rights.  The premiums are going up.  Yes, and what did a rational person think was going to happen in a system based on private health insurance corporations selling policies?  Further, before swallowing all the hyperbole there needs to be a bit fact checking.

First: This is far from a Nationwide Crisis – calm down – as Think Progress advises

“Although some news outlets are characterizing the news about rising premiums as a “November surprise” that could have a big impact on how Americans feel about the upcoming election, the reality is that these price hikes won’t affect the majority of the country. Most Americans get their insurance either through their employer or through a safety net program like Medicaid. A much smaller portion of the population — about 6 percent — buys private insurance plans on Obamacare’s marketplaces.”

Second:  If the premiums go up so do the subsidies. Again, Think Progress explains —

“Critically, Americans won’t need to shoulder Obamacare’s premium increases on their own. Most people who are insured through Obamacare’s state-level marketplaces don’t pay for the full price of their premiums because they get an assist from the government in the form of subsidies. These federal subsidies to help offset the cost of buying insurance are also going to rise. According to the Obama administration, even with the projected increases, more than 70 percent of people buying insurance on the marketplaces will be able to get a plan for less than $75 a month next year — provided they take advantage of the subsidies available to them and select a low-cost plan with more limited benefits than other options.”

If a person is covered under the terms of an employer’s health insurance plan, Medicare, or private insurance purchased on his or her own – this is not an unexpected increase, nor is the increase in premium costs essentially any more than what other policy premiums will see.  There is no need to grab the pearls, hit the fainting couch, or even to have to take two aspirin.

The Replacement is Worse Than The Current System

If one is inclined to take on headaches, none may be more miserable than what the Republicans have in mind for replacing the Affordable Care Act. If clutching pearls and twisting open the adult-proof cap on the painkillers is desired then by all means – support the Health Savings Account idea.

There is nothing new about this idea, and nothing particularly good about it.

‘A creation of the 2003 Medicare act, HSAs do offer employers the hope of curbing their insurance expense. Under the law, the accounts, which enable workers to set aside pre-tax dollars they can later use toward their out-of-pocket medical expenses, must be offered in tandem with a high-deductible health plan (HDHP).” [cfo]

As originally envisioned the HSA is combined with a high-deductible policy.  Thus for any employee there’s a double whammy.  More money out of the paycheck for the HSA and more money out of pocket for the health insurance plan.  But, doesn’t this make the consumer more cost conscious? Yes, and that isn’t necessarily a good thing.

“Studies have recently confirmed the worst fears about such plans: They can induce beneficiaries to stint on health care that they truly need. According to the Employee Benefit Research Institute study, 35 percent of the people in CDHPs and 31 percent in HDHPs “reported delaying or avoiding care, as opposed to 17 percent of those in comprehensive plans.” [cfo]

Avoiding treatment is NOT a desired outcome of any wellness plan.  If you need more convincing that HSA’s are not the answer, look to Five Reasons Not To Enroll In An HSA —  no drug copays; no immediate financing; high deductibles, 213(d) confusion over what’s covered; and an “education gap” about these products.

Seeking more information about this rather bad idea compliments of the Republican Party and their allies in the corporate insurance and financial markets?  There’s The Truth About HSA’s; Here’s Exactly How Terrible Paul Ryan’s Obamacare Replacement Plan Is; HSAs mostly benefit high income taxpayersGAO study confirms HSAs primarily benefit high income individuals; Making Health Care Worse.

The Health Savings Account is another idea for a nice tax shelter, for young healthy, wealthy people.  It is not an answer for addressing general health care cost containment, especially not if people tend to put off medical treatment until their situation is serious or dire.  In less polite terms, it’s the 0.01% answer to a problem affecting the other 99.99%

Previously in Desert Beacon: All Right Everyone, Gird Your Loins! The GOP’s Coming For Health Insurance Reform Repeal (four years ago)

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Filed under Health Care, health insurance, HSA, Nevada politics, Politics

>The HSA Gold Rush

>From the totally and perfectly expected department: The LVRJ prints an article espousing Health Savings Accounts as a solution to health care issues in Nevada. According to the proponents of the HSA option, it’s all about “establishing your own priorities,” and “accepting responsibility for making decisions.” A person needs to attend to the article fairly closely in order to note the reasons Nevadans haven’t been jumping on the HSA bandwagon. (1) They have extremely high deductibles; (2) They aren’t an improvement over self-insured programs; (3) They don’t work for the elderly, or those families in which there’s a member who is chronically ill; (4) Many employers believe that the plans require too much administrative work.

Missing from the analysis are the findings of peer reviewed studies indicating that “the most common high-deductible insurance policies that qualify someone to have a health savings account don’t actually increase most consumers’ health-care cost- sharing.” [Bloomberg] In fact, the Remler-Glied Study indicates that many HSA/High-deductible arrangements would actually reduce cost sharing for many groups.

If the idea behind the HSA was to make health care consumers more cost conscious — on the bizarre theory that people are spending too much money trying to stay healthy — then the numbers don’t match the rhetoric. Returning to the Remler-Glied Study, that hasn’t been seriously challenged lately, as spending rises from $2500 to $7600 for health care expenses “…the standard policyholder ought to be much more cost-conscious than the high-deductible policyholder.” [Bloomberg]

Another reason Nevadans may not be flocking to the HSA offerings is that most of us are not facing marginal tax rates sufficiently high to make the HSA of any appreciable tax deduction benefit. [CMWF]

The President offered HSA’s as a solution to health care cost containment, but the proposal could actually increase the number of uninsured Americans by as much as 350,000 and cost the U.S. Treasury about $25 billion over the next ten years. [CBPP]

So, who wants HSA’s? “Billions of dollars that used to be written in the form of checks with insurance companies’ names on them would instead go to credit unions, banks, and long-term investment houses,” said Dan Perrin, the publisher of H.S.A. Insider and executive director of the H.S.A. Coalition, a lobbying group backed by 70 small-business and medical industry groups as well as the American Bankers Association. “You know America: you see a financial opportunity and it sets off a gold rush.” [NYT] The bottom line: HSA’s could give Wall Street money managers another $75 billion to play with. [TP]

Not that the insurance companies are doing much better at helping Americans with health care expenses. Conseco’s performance with elderly policy holders draws fire from the New York Times. Some Californians found out the hard way that their insurance provider (Blue Cross/Wellpoint) didn’t actually intend to cover them during illnesses or pregnancies. State regulators slapped the company with a fine. [LAT]
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Another former U.S. Attorney hits the talk show circuit with allegations that his firing was politically motivated. [WaPo]
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First the Bush Administration didn’t want appointees to say “global warming,” now we can add Federal Aviation employees who aren’t supposed to mention “staffing” issues within earshot of the flying public. [WaPo]
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Too many “moving pieces?” Secretary of State Condoleezza Rice claims the Bush Administration incrementalism in Israeli-Palestinian talks is necessary because the conflict doesn’t avail itself of a Big Bang solution. [McClatchy] Especially after the U.S. complicated matters by invading and occupying Iraq?
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VA study finds unacceptable conditions in New England hospitals and clinics. [BG]
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Nevada Legislature committee agenda information at Blue Sage Views

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Filed under FAA, Health Care, HSA, Veterans

>Ensign: Stalling Minimum Wage Bill for Your Health?

>On January 25th Nevada Senator John Ensign issued a press release [EPR] touting his amendment to provide health care for America and bemoaning its rejection. Alas, there are a few minor details the junior Senator omitted.

Ensign: An amendment offered by Senator John Ensign today would have made health care more affordable and accessible by expanding the ability of people to use their Health Savings Account to pay for health insurance. The amendment lost by a 47-48 vote.”

What the Senator neglected to mention was that the amendment is one of a host of such dilatory accretions that he and the other Republicans in the Senate wanted to attach to the Minimum Wage Bill. Additionally, there’s no reason to believe that Health Savings Account will actually assist those in the country who are in the greatest need. There is reason to credit the HSA proposition with providing coverage for those most likely to want another tax shelter.

Ensign:Health Savings Accounts have proven to help reduce the number of uninsured,” said Ensign. “We should expand these tax-free accounts so that more people can take advantage of them. My amendment would make it easier for people to get health care coverage by allowing people to use their pre-tax Health Savings Account dollars to pay for health insurance premiums.

Not so fast. The Commonwealth Fund, that has actually studied such things, reports that contrary to the rosy scenarios attributed to proposals that require working and middle class families to cut back on their health care expenses, “…early all evidence gathered to date about HSAs and HDHPs points to the contrary. Indeed, there is evidence that encouraging people to join such health plans might act as salt on a wound, exacerbating some of the very maladies that undermine our health care system’s ability to perform at its highest level.” [CWF] There is no evidence that HSAs reduce the number of uninsured Americans. Again, the Commonwealth Fund report observes that early experience with HSAs reveal low enrollment, high out of pocket costs, cost-related access problems, and low satisfaction reports. [CWF]

Ensign: Health Savings Accounts set aside savings tax-free for health care costs and work in conjunction with a high-deductible health insurance plan. Ensign’s amendment would permit individuals and families who purchase high-deductible health plans on their own to use their Health Savings Account to pay plan premiums.

IF they can afford them. Those in high deductible health plans (HDHPs) are far more likely to delay, avoid, or opt out of health care because of the costs. “Problems are particularly pronounced among those with poorer health or lower incomes.” [CWF]

The Center for Budget and Public Policy was a bit more extended in their criticism, but just as blunt, “…Because the value of a tax deduction rises with an individual’s tax bracket, the proposed deduction would provide the largest tax benefits to high-income individuals. It would provide little or no tax benefit to low- and moderate-income workers and consequently would have only small effects in helping such individuals afford to purchase high-deductible health insurance in the individual market.” [CBPP] These are the very people who don’t have health insurance in the first place. How Senator Ensign’s amendment was supposed to help them while at the same time making things more difficult is unfathomable.

In fact, if employers were to drop health care plans for their employees as a result of this “innovation” proposed by the Republicans we might expect an increase of 1.2 million in the number of uninsured Americans. [CBPP]

Ensign:We need innovative solutions in health care, and I’m disappointed that Democrats played politics on an issue so critical to providing quality health care to Americans,” said Ensign. “This is one of those innovative solutions and is an important component in addressing the number of uninsured Americans across the country.”

Who was playing politics? What the Democratic majority in the Senate wanted (and the Democrats in the House got) was a nice clean bill increasing the federal minimum wage. What Senator Ensign and his Republican cohorts contributed were stacks of amendments piled on points of order and motions to table. [Sen] [DB] And, this isn’t the first time the GOP has played this game. [DB] and [DB]

Update: See also “Experts See Peril in Bush Health Proposal” Jan 28, 2007 NYT

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Filed under Ensign, Health Care, Heath Insurance, HSA

>Ensign: Corporate Welfare and Individual Free Enterprise?

>Nevada junior Senator John Ensign liked what he heard from the President on health care issues: “We have a very large uninsured population, and we also lead the country in small businesses per capita,” Ensign said. “A lot of folks don’t have health insurance, and tax deductibility could at least potentially benefit Nevadans.” [LVRJ] Not so fast! Mr. Ensign is stringing together “uninsured,” “tax deductibility,” and “potential benefit” apparently without connecting the dots and acknowledging the lack of logical relationships. In the GOP vernacular du jour this must be all right because the President did it too.

Here’s the “tax deductibility” component: President’s first proposal: “First, I propose a standard tax deduction for health insurance that will be like the standard tax deduction for dependents. Families with health insurance will pay no income on payroll tax — or payroll taxes on $15,000 of their income. Single Americans with health insurance will pay no income or payroll taxes on $7,500 of their income. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills. At the same time, this reform will level the playing field for those who do not get health insurance through their job. For Americans who now purchase health insurance on their own, this proposal would mean a substantial tax savings — $4,500 for a family of four making $60,000 a year. And for the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach. Changing the tax code is a vital and necessary step to making health care affordable for more Americans.” [WHPR] {emphasis added}

Note that this is a tax deduction, not a tax credit. Therefore in order to even qualify for the benefit the individual or family must already be insured. No help for the uninsured here, because many of our uninsured pay little if any income tax to begin with. One other point is worth mentioning — nothing in the President’s proposition addresses the fact that there is no help here with co-payments, deductibles, and other out of pocket expenses.

Further, what the President is proposing, and Senator Ensign is cheering, is a plan that ignores the fact that the reason some 46 million Americans aren’t insured isn’t a lack of incentives, but the high cost of health insurance in the first place. The Commonwealth Fund has already observed that the percentage of working age people in the U.S. in the moderate to middle income range who went without health insurance increased from 28% in 2001 to 41% in 2005. [DMI] Who isn’t able to get insurance? 70% of people in 2005 with health problems or lower incomes who sought coverage in the individual market found it difficult or impossible to find a plan they could afford. [CmFnd] The President’s plan doesn’t address this crucial problem.

Not-so-affordable choices:
My second proposal is to help the states that are coming up with innovative ways to cover the uninsured. States that make basic private health insurance available to all their citizens should receive federal funds to help them provide this coverage to the poor and the sick. I have asked the Secretary of Health and Human Services to work with Congress to take existing federal funds and use them to create “Affordable Choices” grants. [WHPR]

What we have here, quite simply, is yet another corporate welfare plan. In order to get the money the state of Nevada would be required to help citizens purchase private health insurance. Worse yet, the President’s plan actually penalizes states for providing health care for the poorest among us by redirecting some $3.9 billion from already strapped hospital and other health infrastructure components into the insurance company subsidization plan. This hardly sounds like a solution when 3 out of 5 hospitals in the country now have operating margins too low to finance working capital or to reinvest in maintaining their own infrastructure. [DMI]

Here we go again: There are many other ways that Congress can help. We need to expand Health Savings Accounts. We need to help small businesses through Association Health Plans. We need to reduce costs and medical errors with better information technology. We will encourage price transparency. And to protect good doctors from junk lawsuits, we passing medical liability reform. In all we do, we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors. [WHPR]

We’ve already been down these paths before. Health Savings Accounts are good if you are young, healthy, and wealthy. Remember, that the HSA plans are predicated on the ultra-conservative fringe notion that health insurance is “too cheap” and therefore middle class Americans are overusing their “gold plated plans” and spending too much. There’s another bonus to the wealthy here as well — tax shelters. Since contributions to HSAs are tax deductible as are withdrawals for out of pocket expenses, the ultra wealthy could use HSAs to shield more of their income from taxation. [DMI] HSAs don’t’ have anything to do with decreasing costs, what they do is to shift the risk from the employer’s insurance programs to the individual — another example of the Bush philosophy that we’d be better off swinging along through life without a safety net.

We’ve also traversed the Associated Health Plans path as well, and it’s one rocky trail. In this proposal for yet more corporate welfare, the result could easily be a “cherry picked” pool in which a few small businesses would see rates decrease, but about 80% would see increased premiums. [Inc.com] A better proposal would be to allow small businesses to band together without the aggregated risk imposed by the AHP. Additionally, the states should be able to maintain their consumer protection regulations, an element missing from the Republican proposals for Associated Health Plans. [DMI]

Malpractice tort reform has been around the track often enough to qualify as a tired nag. The Congressional Budget Office found that costs associated with malpractice (insurance and damage awards) amounts to less that 2% of America’s rapidly increasing health care expenses. [CD]

Finally, there’s that coded message, “… we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors.” Re-enter Harry and Louise stage right, “What we don’t want is S o c i a l i z e d medicine.” Thus the President’s pendulum swings widely right expecting Americans without medical training to “shop” for appropriate tests or treatments.

In short, what the President offered and Senator Ensign praises, are plans to benefit the insurance industry at the expense of middle class Americans, to ignore the poor and working poor, to increase the burden on small business, to decrease the burden on major corporations, and to defund already imperiled health care institutions.

Senator Ensign may be happy with this, but frankly not too many others should be.
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Nevada state/local at Blue Sage Views

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