Tag: "Health Savings Accounts"

Taxing Health Benefits, and British Parliament Benefits

Today's Wall Street Journal had good editorial on taxing health care, pointing out that the President and Congress are struggling to figure out how to raise enough taxes to pay for President Obama's health-care take-over.  The most likely target is the exclusion of employer-based benefits from taxation, which moves Democrats closer to John McCain's position in last year's election.  However, the goal of McCain's reform was to give health-care dollars to American families instead of their employers.  Obama's goal is to seize health-care dollars for the government. 

The WSJ also ran an op-ed on "Parliament and the Laffer Curve" explaining that the exclusion of "expenses" – very broadly defined – from British legislators' taxable compensation has led to taxpayers paying for cleaning moats and repairing duck ponds in politicians' country estates.  The op-ed diagnosed the erupting scandal in terms equally applicable to American health care: "Members of Parliament face a 100% tax rate on their unclaimed allowances."

The current tax treatment of employer-provided health insurance causes Americans to over-insure. And (unless they have a Health Savings Account) the type of insurance they have is use-it-or-lose-it. Failure to consume health services of even marginal value means forgoing those benefits forever.

May 29, 2009 | 1 comment | by

Attack on HSAs

The U.S. Senate Committee on Finance has proposed new changes to Health Savings Accounts (HSAs) that could make them less attractive in the future. These options are only "proposed" so they are open for discussion.  Here's what you need to know about what these provisions would do to HSAs.

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May 28, 2009 | 15 comments | by

HSA Account Holders Happy with Their Accounts

A study by Optum Bank says, “Health savings account (HSA) owners are overwhelmingly satisfied with their accounts, and 91 percent believe such accounts should remain an option for Americans.” Account holders believe strongly in personal responsibility – “the survey found that 83 percent of respondents agreed people should research health care options and try to get the best price – just like they do for other major consumer purchases; 72 percent of respondents said that individuals should be responsible for helping to manage their own health care costs.”

May 27, 2009 | 2 comments | by

HSAs Grow by 32 Percent

America's Health Insurance Plans (AHIP) just released their annual report on Health Savings Accounts (HSAs). The 32 percent growth rate of HSAs in 2008 was very similar to the growth rates in 2006 and 2007. Assuming that rate continues, there will be 32 million Americans in HSAs in 5 years and 128 million in 10 years.

HSAs are exploding in popularity, yet many (a majority?) in Congress want them dead. Stay tuned…

May 15, 2009 | 4 comments | by

Despite the Recession, HSAs Thrive

A new study by Canopy Financial finds HSA balances continued to grow during the fourth quarter of 2008, despite the woes in the rest of the financial sector. Individual HSA balances grew 33% and family balances grew 12% in 2008. Most of this is from individual, not employer, contributions.

Apr 01, 2009 | 3 comments | by

HSA Success Is Impressive

A new study by Ben Zycher at the Manhattan Institute shows how well Health Savings Accounts are working. These accounts are used by more than 6 million individuals. Among the findings:

  • HSAs are a great way to save for the future: Less than half the HSA balances in 2007 were actually spent.
  • HSA qualified policies are 10% to 40% less expensive than traditional policies.
  • The market share for HSAs is growing at a similar rate to IRAs balances when they were first introduced.
Feb 25, 2009 | 5 comments | by

Another Bad Study

A brand new report by Linda Blumberg and Lisa Clemens-Cope of the Urban Institute and funded by the Robert Wood Johnson Foundation repeats the tired old mantras we've been hearing for 15 years.

They argue that HSAs are okay for the healthy and wealthy, that the sick and the poor can't afford to pay the higher deductibles, that people can't effectively shop for health care services, that HSAs are ripe for tax cheating, and that they aren't very popular in any case. They support these views by relying on old information and discredited sources and by ignoring any research that runs counter to their predetermined views.

First, for the easy stuff. This report relies a great deal on a GAO report that came out last year. That is how it concludes that market penetration is only 2% and that HSA account holders are much wealthier than others. The GAO report was using very old data. Its enrollment numbers were from 2006, and its wealth estimates were even older – 2005 – when HSAs were still brand new. Further, it measured "wealth" by comparing HSA account holders to all tax filers, including the uninsured, people on Medicaid, people in the military, etc. Honest researchers would not have relied exclusively on this information, especially when much more robust and contemporary data is readily available.

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Feb 17, 2009 | 5 comments | by

AHIP Studies HSAs

America's Health Insurance Plans has released a study of more than 1.1 million Health Savings Accounts (HSAs), open as of June 30, 2008. Results:

  • In the first six months of 2008, 70 percent of HSA accounts in the study had a personal deposit; 40 percent had an employer contribution; 71 percent had withdrawals; 86 percent reported Interest earnings; and 60 percent were charged a fee.
  • The average balance for all HSA accounts was $1,449, ranging from $747 for accounts opened in the first six months of 2008 to $3,125 for accounts opened in 2004 or earlier.
  • Among accounts with personal deposits in 2007, the average amount deposited was $1,517. Among accounts with employer contributions, the average contribution was $1,680. The average amount withdrawn from accounts that had withdrawals was $1,486.
Feb 16, 2009 | 3 comments | by

Chronic Care

The problem:

For the 47 percent of Americans with multiple chronic diseases or conditions, health care costs increase dramatically. The average Medicare patient with one chronic condition sees four physicians a year, while those with five or more chronic conditions see fourteen different physicians a year. In 2002, beneficiaries with five or more chronic conditions accounted for 76 percent of Medicare expenditures. [link; gated, but with abstract]

The obvious solution: more conferences, more papers, more research grants. Isn't that how we solve problems in other markets?

See my post at the Health Affairs blog for a description of how some employers are solving the problem with Health Savings Accounts.

Feb 12, 2009 | 5 comments | by

Why Health Care Costs So Much

Greg Dattilo and Dave Racer are two insurance men with lots of experience and understanding of what’s right and wrong in U.S. health care. Every couple of years they write a book, and they’ve just published Why Health Care Costs So Much: The Solution – Consumers.

It’s a rare book (actually a “booklet”) about health policy that is fun to read (Top Ten Myths of American Health Care being another recent example). Plus, at 80 pages (including drawings) and available in bulk for only $1.50 each, you can buy a box and hand them out like religious tracts.

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Feb 12, 2009 | 4 comments | by
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