But Do People Like It?

I’ve spent a lot of blog space recently talking about the benefits and features of a new type of health care insurance, the HSA-high deductible combination. For those who just came on board, an HSA, or health savings account, enables employees to pay for their share of health care with pretax dollars and is offered in conjunction with a low premium, high deductible healthcare insurance policy. Employees can save money in the HSA tax-free and draw out funds anytime they want to pay for the premium, deductibles, co-pays or other medial costs. Employees don’t have to spend what they put into an HSA by the end of the year.

But do people like the HSA?

Survey says….Yes!!!

A 2009 study by OptumHealth shows that once employees open an HSA they are delighted with the coverage. In the study, 82% of the respondents—all HSA owners—said that they are fully satisfied with the plan, while 78% believe that the HSA option should remain a health care option no matter what happens in future health care reform.

America’s Health Insurance Plans (AHIP), the trade association of health care insurers, surveys how many people are covered by HSA-high deductible plans once a year. Recent AHIP figures demonstrate that in the past two years, the number of people enrolled in HSA plans has grown by 90% and now stands at 6.1 million nationally, broken down as follows:

• Small groups: 1.8 million
• Large groups: 2.8 million
• Individuals: 1.5 million

Among these 6.1 million are large numbers of people who did not have health insurance before establishing an HSA and taking a high deductible plan. A 2007 AHIP study found that 27% of people with HSAs in employer-based plans were previously uninsured. A study by Golden Rule Insurance, a UnitedHealth Group company, found that an even larger percentage of individual-based HSA buyers—a whopping 40%—were previously uninsured. Based on these two studies, OptumHealth Financial Services estimates that nearly 2.5 million previously uninsured people have gained coverage through HSA plans through January of 2008. And a 2009 OptumHealth survey estimates that 3 in 10 holders of HSA plans say that if it weren’t for the HSA option, they wouldn’t have health care insurance at all.

The HSA-high deductible combination has been particularly popular with two groups that insurance carriers and brokers have had difficulty serving in the past: small businesses and employees with relatively low incomes. We find that among UnitedHealthcare participants, 74% of all small businesses now select the HSA-high deductible option, as do 64% of all employees earning less than $25,000 per year.

So yes, people like the HSA, and with reason: it saves money and if it’s structured right, also helps to improve the quality of care people receive.

Not Every HSA is Alike, Part 2

In my last blog entry, I reminded you of the advantages of an HSA-high deductible health care plan that does not include preventive care in the deductible. If preventive care is not included in the deductible, then the employee does not have to pay anything additional (other than a co-pay) for annual exams, pap smears and other preventive care.

Here are some other variations in HSA plans that can make all the difference to the people in the plan:

• The plan should allow the employer to make contributions to the HSA. Employers can facilitate employees opening HSAs by either giving them a one-time or regular contribution. The regulations governing HSAs enable anyone to contribute, but when employers make a contribution, a greater percent of employees are likely to open an account.
• The plan should have those features employers want now. While some employers are interested in bare bones plans that may only pay for long-term hospitalization, we have found that among employers of all sizes, the current widespread attitude towards health care benefits is to provide certain core components of basic health care:
  - Emergency care
  - Preventive care
  - Prescription drugs
  - Long-term hospitalization
• There should be online capabilities to manage HSA expenses. Many people are reluctant to try an HSA because of the increase in paperwork that’s required to figure out when the deductible limit has been reached. Being able to access all these records on-line 24/7 makes it much easier for employees to manage their health care costs.
• The plan should include some access to wellness programs. Because HSA plans tend to make consumers more aware of costs, they also tend to influence consumers to take actions to maintain or improve their health. For example, a 2008 survey of its members by the Blue Cross and Blue Shield Association found that people with HSA plans are one-third to one-half more likely to use health screening, exercise and health coaching services, compared to traditional health plans that also offer these preventive and wellness services for free.
• The insurance should include extensive training and support.

Employers and individuals cannot assume that all plans are alike. For the near future at least, carriers will continue to introduce innovative features to the HSA plans they offer.

Not Every HSA is a Alike

I forgot to mention an important fact about health savings accounts. They’re not all alike, and the differences between many the plans that are offered may determine if people will actually benefit from this insurance innovation.

Surely the most significant difference in HSA-high deductible plans is whether or not the health care plan includes preventive health care such as annual checkups, pap smears and mammograms as part of the deductible. These routine exams help to find and prevent serious illness, but if they are part of the deductible, employees in the HSA have to pay for them, up to the high deductible limit. If they are not part of the deductible, they are covered 100% by the health plan, meaning that employees are more likely to go to the doctor for these important exams and thus more likely to remain healthy.

Our studies show that participants in HSA-high deductible plans in which preventive care is not part of the deductible receive preventive treatment at rates that are equivalent to or higher than people in traditional plans. In fact, people in HSA plans are:

• 16% more likely to get cervical or prostate cancer screening
• 20% to 40% more likely to get important tests for their condition if they are heart patients
• 15% more likely to have important diabetes tests, if a diabetic.

Another survey, this one by the Wellpoint Institute of Health Care Knowledge, shows that men, who typically lag in the use of preventive care, are more than twice as likely as women to increase their use of preventive care once in an HSA plan.

One More Change, and It’s a Biggie

Last week, in my list of ways in which health care insurance has improved over the past few years, I didn’t mention one major change, because it’s kind of complex.

The change was a piece of health care reform that Congress passed in 2003 that allowed employers to offer a new way to pay for health care expenses using a health savings account.

A health savings account (HSA) enables employees to pay for their share of health care with pretax dollars and is offered in conjunction with a low premium, high deductible health insurance policy. Employees can save money in the HSA tax-free and draw out funds anytime they want to pay for the premium, deductibles, co-pays or other medial costs. Employees don’t have to spend what they put into an HSA by the end of the year.

The benefits of the HSA-high deductible plan to employers are fairly obvious: By switching to the high-deductible plan, the employer lowers the insurance premium and can shift to a more cost-sharing arrangement with employees. The lower cost of the HSA may make it the only plan that some small employers can afford to offer. And if the prediction of many experts is correct, that the HSA-high deductible combination makes people more careful consumers of medical services, then switching promises to yield overall reductions in healthcare cost inflation in the future.

Most high-deductible plans set the deductible at $1,500 or $2,500 per year. Simply by adding a deductible of $1,500-$2,500 to a health care plan but maintaining every benefit and feature in the plan will cut the premium cost by about 25% on average over the same plan but with a zero deductible.

Over the course of a year, adding a high deductible leads to an average decrease in premium costs to employer and employee of $3,836 after switching from a PPO plan to the HSA/high-deductible combination, according to a recent study by the Kaiser Family Foundation. And a multi-year study my company, UnitedHealthcare, recently completed showed that after adjustment for demographic and health status, the HSA-high deductible plans lowered overall health care costs by 7% in 2006 and 9% in 2007. The employer’s share of health care costs was down 12%.

There are many benefits to employees of the HSA-high deductible combination:

• The HSA account is portable, which means employees keep the money in the HSA account if they move to another employer.
• Anyone else can contribute to an employee’s HSA account.
• The employee has easy access to the funds, and with many plans may be able to pay for medical expenses using a debit card tied to the HSA.

A recent OptumHealth study demonstrates that those in HSAs are aware of overall health care costs, and in a sense become more informed consumers. For example, in the last year:

• 64% of HSA holders asked providers about generic options for prescription medications.
• 47% asked providers about the charges for visits or treatments.
• 30% used websites or other resources to research the range of costs for health care services in their area.

Like all of the recent innovations about which I have been talking, the HSA-high deductible combination does not solve all our health care problems. But it does offer a cost-effective option for both employers and employees.

It’s Getting Better, Part 3

In my last few blog entries, I’ve been writing about how health insurance has improved over the past 5 years. I’ve cited examples of technological innovations and of initiatives that have helped consumers take greater control of their own health and health care.

Perhaps the most significant improvement in health insurance over the past few years has been the greater emphasis on prevention. People who don’t get sick not only are healthier, they also spend less on their health care.

Here are some of the most important recent improvements in health insurance that involve prevention of disease:

• Wellness programs. From smoke cessation to exercise, from weight loss to managing diabetes, consumers now have a wealth of wellness programs available through their health insurance plan and/or their employer.
• Health care advice over the phone. A number of insurance plans now offer health care advice over the phone. In the typical service such as NurseLine or one of UnitedHealthcare’s disease management programs, a nurse with experience can help the consumer find a doctor or hospital, understand treatment options and get medical questions answered.
• Health care coupons. Some health care plans have begun offering discount programs that enable covered employees to get discounts of up to 50 percent on health care products and services, including lasik surgery, smoking-cessation programs, gym memberships and even fitness apparel.

I’ve mentioned 9 improvements, all of which share some common themes. For one thing, they all tend to save money while improving care. But beyond that holy grail of raising quality while lowering costs, we can see these other trends I’ve mentioned:

• Many innovations such as real-time adjudication and swipe cards reflect the opportunity that new technology presents for streamlining and thereby cutting the cost of administering health care.
• Some innovations such as personal health records and physician rankings tend to educate consumers and get them more involved in making health care decisions.
• Running through many of these innovations, such as wellness programs and health care coupons, is a strong element of preventive medicine.

No matter what shape health care reform takes, I think we can take it for granted that these themes-technology, personal responsibility and prevention-will lead to a completely new list of innovations in just a few years.

It's Getting Better, Part 2

In my last blog entry, I made the controversial statement that health care insurance has improved in many ways over the past 5 years. I started to prove my point by listing a few technology advances that have improved health insurance.

Here are some innovations that tend to educate patients and get them more involved in making health care decisions:

• Physician rankings. Physician ratings can help consumers select the most appropriate doctor, but if and only if qualified medical professionals do the rating based on clinical standards and quality is rated first, with only those doctors who make the quality standard getting rated for efficiency as well.
• Personal health records. A personal health record (PHR) provides a complete and accurate summary of the health and medical history of an individual using data gathered from many sources. The PHR is accessible online to the individual and anyone who has the necessary electronic credentials to view the information.
• Generic drugs in formularies. Health insurance plans now routinely include generic drugs in their drug formularies resulting in a lower copay for consumers who use generics in place of higher-priced brand names that do the same thing. Consumers who get involved can cut their costs by selecting the generic version.

So far I’ve come up with six ways that health insurance is better than it used to be. And I’m not done yet.

It's Getting Better

In my last blog, I pointed out that my industry —health insurers—takes a lot of heat for what’s wrong with our health care system. I admit that health care insurers have to change, like everyone else. That’s why my industry’s proposal for health reform brings everyone into the system, guarantees coverage for all Americans, does away with pre-existing condition limitations and ends ratings based on health status and gender.

But I also want to point out something that most people don’t realize: Quietly over the last 5 or so years, most health insurance plans have added features and programs that improve health, make it easier to deal with our complicated health care system or cut overall health care costs. These new features don’t solve all our health care woes, but they have made inroads into addressing some of our most complex challenges.

Many of the improvements to health insurance over the past few years result from the application of advanced data processing and other technologies. Here are some examples:

• Real-time claims adjudication. Doctor’s offices can now submit their claims online and know within 10 seconds if a procedure is covered by the patient’s health plan, instead of having to wait days or weeks.
• Medical data synchronization. New data processing software such as the eSync platform collects and synchronizes medical data from a variety of sources, analyzes it and converts it into individual health care recommendations for specific patients.
• The medical swipe card. Patients swipe the medical swipe card through a device similar to a credit card swipe to give caregivers access to all appropriate patient eligibility information and to the patient’s health records. With the card, the physician is able to submit claim forms online and receive approvals from the insurance company in a matter of seconds.

All of these innovations have made maneuvering the health care system easier while reducing administrative costs.

But those aren’t the only changes that have improved health insurance. When I get more time, I’ll list a few more.