Half of the 2 million people who have signed up for consumer directed plans with health savings accounts have yet to put anything into the accounts. Interesting, as one of, if not the major attraction of the plans was the tax-favored status of the dollars going into the savings accounts.
(Matthew Holt at The Healthcare Blog has a transcript of Pres. Bush’s interview with the Wall Street Journal in which Bush describes HSAs as one of the ways to make health care more affordable…)
What appears to be happening is what I (and others) have been predicting all along. Employers, staggering under the burden of rising health care costs, have all but given up and thrown in the towel. Those who have given up are dropping their health plans in favor of the new high-deductible plans, thereby shifting more of the burden onto employees. In those instances where the CDHP option is offered alongside regular heath plans, CDHP participation is in the low single digits.
The idea (at least the politicians’ idea) behind CDHPs is that they will make the consumers more directive, more involved, more aware of their health and thus better consumers. I’m not sure the employers care much about the theory; what they do care about is health care inflation is now less of a problem for them.
I write that with no malice towards employers; many have decided health care is simply unmanageable. It is digging into their profits, their ability to fund new businesses or products, increase wages, enhance training, pay bonuses and executive stock options, and hire new workers. Employers in the US are tasked with addressing the health care needs of their workers, a challenge their competitors in other OECD countries don’t worry about.
Here’s more detail from Milt Freudenheim’s article in today’s New York Times:
” people have evidently signed up not because they are eager to direct their own medical spending but because the plan looked cheap or they had no other insurance option. And at least half of those enrolled have not put money in their health savings accounts. So there will be no money building up for next year’s out-of-pocket expenses
Jan
26
46 million people in the United States are currently without medical care coverage. What is the “magic number” that will cause the government to spring into action? 50 million? 75 million? 100 million? As employers continue to dump health costs on to employees, or cease to offer health coverage, that number will surely increase.
The President’s “plan” will simply cut federal tax revenues, allowing more people to enjoy tax free savings while doing nothing to even maintain our current level of insured persons.
My fear is that we will not be capable of appropriately rsponding when the issue reaches the “crisis” stage, that we’ll over-react in some way instead of planning and looking at alternatives and intelligently choosing a path to follow.
Mean time the administration is re-arranging the deck chairs on the Titanic… and handing out vouchers for free drinks to the first class passengers!