My post on HSAs earlier this week struck a few nerves, with several coming to the defense of HSA. Some raised good points; others appeared to misunderstand the point of the original post.
Let’s start with an easy one. A reader opined that 20-25% of the uninsured make over $75,000. Not so. The Employee Benefit Research Institute reported that 14% of the uninsured had family incomes over $75k (2006 data).
One noted that they make “health care more affordable for the majority of consumers”; I think the commenter is conflating health insurance with health care. HSA plans may make insurance more affordable, but health care costs are not any cheaper under HSA plans. In fact, HSA plans’ higher out-of-pocket costs may make health care costs less affordable.
Another said “hypocracy (sic) exists with political scientists disbelieving that individuals cannot make wise healthcare buying decisions”; I’m not a political scientist so I can’t speak to that. I do know that the lack of actionable information re physician quality, outcomes, and costs is well-documented and real. And without information individuals can’t make wise decisions.
Yet another claimed “Anyone who pays taxes will make out being in an HSA”. I agree – what the commenter missed was the topic sentence of the original post “The article notes that the “biggest beneficiaries” of health savings accounts “are proving to be well-to-do investors looking for another way to fund their retirement savings.” Everyone benefits, but the biggest beneficiaries are well to do investors. If you disagree, write to the WSJ.
A critic claimed that studies indicate “individual policies that are HSA-qualified cost 20 percent less than non-HSA-qualified plans…They also show about 25 to 30 percent of individuals purchasing HSA-qualified policies were previously uninsured.”
Agreed, at least partially – HSA plans are cheaper than non-HSA plans only if the deductible differential is taken into account. The price difference is because HSAs have more cost-sharing. As to the claim that 25-30% of HSAs were bought by those previously uninsured, I have not found a solid study that backs up that contention. Jonathan Gruber of M.I.T. published a study indicating the number of uninsured may well increase due to the advent of HSAs.
Here’s what Gruber said:
“…currently employers have a large tax advantage in offering insurance, since wages are taxed but employer-provided insurance premiums are not, and this is part of the reason that so many employers provide insurance to their employees. This policy will remove that tax advantage for HSAs, causing some employers (typically small employers) to stop offering insurance coverage to their employees. Only about half of those employees dropped from employer-provided insurance enroll elsewhere, 4 million in non-group insurance (predominantly tax-subsidized HSAs) and 0.5 million in Medicaid. The remaining 4.4 million become uninsured.”
We do know that the percentage of employers in California offering health insurance has declined over the last few years, although we don’t have current data I’m pretty confident this trend has not reversed itself recently.
Comments are always appreciated, but comments that include citations are really much better. If you are going to cite facts or state positions based on a particular “fact”, please cite a source.
Jan
10
27% of individual HDHP policies purchased by previously uninsured — http://www.ahipresearch.com/PDFs/FINAL%20AHIP_HSA_PPTslides.pdf
And with respect to the Gruber study you cite to support the idea that the “number of uninsured may well increase due to the advent of HSAs”? That study was an analysis of a never-enacted Bush HSA budget proposal, not a general study of the impact of HSAs.
Let’s make a deal — we’ll exhaustively source facts if you cite only studies that are relevant to the issue.
Greylock –
thanks for providing the source and for the correction re the Gruber study.
I take your point re studies that are relevant. I would suggest that the AHIP study you cited is only partially relevant as it only refers to the individual market, not the small and large group markets. The individual market comprises less than a quarter of the entire HSA/HDHP market (AHIP data).
AHIP did not define “previously uninsured”; it could be for folks that were without coverage for a day, a month, a few months, or a lifetime. Insurance underwriters ask this question to assess the potential for adverse selection; the question typically is “is this a replacement for an existing policy?” and if the answer is no (e.g. applicant is recently unemployed or changing jobs and does not want to pay COBRA rates) AHIP may well have counted them as ‘uninsured’. Again, that’s correct on its face, but my point remains – HSA plans are not having any meaningful impact on reducing the number of uninsured.
Ah, now we’ve identified the problem. Greylock, your source is AHIP, which is not an INDEPENDENT source. It is the insurance industry’s lobbying group, whose agenda is very clearly to cast its members in the best light possible and help them sell more insurance. It is not a research organization. Even the slides themselves say at the bottom that the source of the data is AHIP’s census of its own members.
That, greylock, is not a source. That is an advertisement.
There are plenty of universities that have departments dedicated to studying health insurance. Here are two from my favorite institution of higher learning:
http://www.hmrc.umich.edu/
http://www.sph.umich.edu/vbidcenter/
These are the best places to look for accurate data.
Let me put it this way: if I was buying a new car, and wanted to know the capabilities, comparative strengths and weaknesses, and true pricing information about certain cars, I would not ask the dealer or read the ads. I would seek an independent source like Consumer Reports.
Gee, Rick, if AHIP is fudging the numbers, they sure are doing a lousy fudging job. Only 27 percent?
How about this study then from 2005, from ehealthinsurance.com — “41% of 2005 HSA-eligible plan purchasers did not have prior health insurance” (defined as not having health insurance in the prior six months, to respond to Mr. Paduda’s point on length of time of uninsurance).
If it makes you happy for me to cite them instead of AHIP, then there you go.
If you have any university studies, please share — I’m sure university professors never try to slant the data themselves….
(source: http://www.ehealthinsurance.com/content/ReportNew/2005HSAFullYearReport-05-10-06F.pdf
The fact that your second source is even less independent than your first — ehealthinsurance.com is an online brokerage; again, no peer-reviewed science there — tells me you’re being intentionally obtuse. Your credibility is shot. I might be a little out of line to speak for Joe, but I think his preference is for commenters with wisdom to impart, not an agenda.
Rick, from where exactly do you think “impartial” information like this is going to come? Companies and brokers who sell these policies have the stats. As I said before, if you can find a “peer-reviewed” non-industry study, please share it.
And while we’re on the subject of being out of line, I wonder if the host of this blog appreciates commenters making such ad hominem arguments.
Attacking these organizations and attacking other posters, without producing any evidence to prove these surveys are somehow invalid — that can’t be how they teach people to think and argue at the U of M.
Well, personally I don’t like to play the game of my-facts-are-bigger-than-yours, but if you insist, start here:
http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=274002
or here:
http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=326359
You don’t like the studies sponsoreded by Commonwealth Fund? OK, go search RAND Health:
http://www.rand.org/health/
Or if you want something more esoteric, try the Bell Policy Center:
http://www.thebell.org/issues/health/insurance.php
Or go search KFF.org. Or the Robert Wood Johnson Foundation. Or Health Affairs. Or the Journal of Managed Health Care. Or even Consumer Reports.
All these organizations conduct research into insurance products, and they tell you how they do it.
You won’t get the full picture from AHIP or eHealthinsurance because one is a lobbying group and the other is a for-profit corporation entitled to keep its proprietary methods to itself. Neither claims research as a core competency.
To put it simply, before we have confidence in a source that says they have the answer, shouldn’t we all know what the question was?
The point Joe has made, and that I am making, and that you are ignoring, is that citations and “studies” are reduced to mere assertions if the methodology, definitions and raw statistics, like margin of error, can’t be ascertained.
I didn’t have to go to U-M to learn that. I remember picking it up in middle school science class.
Rick, I appreciate your persistence, but let’s remember where this started.
Joe said he hadn’t seen any studies to back up my contention that around 25% of individual HDHP/HSA purchasers were previously uninsured.
I provided two surveys with the information. They certainly weren’t “studies” in the sense of research to support or reject a hypothesis, nor did I ever claim such a thing. They were simply surveys that answer the question of how many people are buying a particular product. AHIP surveyed its member plans, and ehealthinsurance.com reviewed the policies sold through its site.
If you want to go knocking down straw men, though, there’s nothing much I can do about that.