HSAs? Delaying the inevitable.

       

By Jack E. Lohman

Health savings accounts are being pushed by an insurance industry trying to stay in the healthcare profit loop, and they are willing to share their profits with the politicians that make it all happen. They clearly know what legislative buttons to push.

The fact that political cash must flow in order to achieve passage of a bill is the first red flag. Good laws don’t need political cash to pass, only bad laws do.

The insurance industry seeks to siphon off the young and invincible by dangling a so-called “savings” to lure them in, and some will buy their pitch without looking at the risks.

People think that once the deductible is satisfied, the insurance kicks in, and they’re covered. Don’t count on it.

Don’t assume that it is catastrophic coverage and the company is not able to bail out when you get really sick and need coverage the most. They are canceling contracts even today (ask Blue Cross for details). HSAs provide the same coverage, their high deductable just delays the inevitable — and the credit card companies and bankruptcy attorneys just love it.

Insurers all have a legal “out” in their contracts, and when they need it they look at pre-existing diseases not properly disclosed. Same as before. Did you think they forgot about that?

Don’t assume that when you exceed the deductible that they are not going to have the same gatekeepers and deny care and interfere with doctor decisions like they do today. That’s their job. It’s called utilization review. When your money runs out and they have to start paying, the scrutiny begins.

And when they siphon off the well and leave the sick for other policies, not only will this drive up the costs of all other insurers, it removes the healthy patients from any large pool that will make health care affordable for all. But they like that and make money from both market segments.

Yes, those with a HSA will now start looking at costs and avoid doctors whenever possible. They’ll avoid both wasteful and needed care, thus delaying treatment of real diseases until they are more costly to treat or become untreatable.

That may help us ultimately, because those who die prematurely no longer expend costs. What a deal!

Delaying care will be costly both to you and your employer, as they end up with a sicker workforce. And their current savings will be lost if they start losing workers to better benefits down the street — unless they increase wages or benefits, which negates the purpose of HSAs in the first place.

Worse for HSA subscribers will be when they start needing care and want to switch or change jobs, only to find that their pre-existing diseases are not now covered by the new policy. Thus HSA users are painting themselves into a dark corner.

One way to test whether HSAs are a good idea is to mandate them for all members of the state legislature. If they are good enough for the public they must be good enough for the politicians.

Another way is to eliminate the cash that flows between the insurance industry and the politicians and see if it still passes muster. Not just delay the campaign money, as Rep. Leah Vukmir (R-Wauwatosa) is doing while she shills for the industry, forswear it also in the years to come. Then see if the politicians will pass it!

But political money is driving this issue, not logic.

Importantly, whether HSAs or not, we must mandate that all private insurers provide at least the same level of care as does Medicare. No pre-existing disease exclusions. No limits on coverage. No gatekeeping. No interference with doctors. No denials of care. No cancelling when costs start increasing. In other words, no playing games, no under-insuring and no cheating. Patients get care when they need care. Always!

I think that will put the kibosh on it all.

We also need evidence-based health care, but we won’t get there until we have a solid, national database where 100% of our population’s diseases and treatments and results (without patient ID) are stored and compared and then given to the physician before he treats the patient. This will someday lead to transparency and competition on the basis of physician quality rather than price, and it will allow us to follow drug reactions and dangerous trends.

We need ONE national database, not the hundreds that are in production. But that means “government control” which flies in the face of the right-wing philosophy of “everybody for themselves” and the left wing’s privacy hang-ups.

Resources:

“HSAs coupled with high-deductible health plans increase cost-consciousness among enrollees, but have little effect on overall health care costs.” – The Bell Policy Center

“Market-Based Failure — A Second Opinion on U.S. Health Care Costs” – New England Journal of Medicine

“Consumer-Directed Health Plans — Driven by health care consumers, or are they just along for the ride?” WhatIf.com

“Will Consumer-Driven Medicine Really Cut Health Care Costs?” The Healthbeat Blog

“Top 10 problems with health savings accounts” California Nurses Association

 “Health Net ordered to pay $9 million after canceling cancer patient’s policy” LA Times

3 Responses to HSAs? Delaying the inevitable.

  1. A simple solution to end this health insurance abuse is have the states regulate the health insurance industry just like a public utility is regulated.

    This will rein in the obscene profits made by the insurance industry taking advantage of the vulnerability of sick Americans.

    How does one deal with an eight hundred pound Gorilla that misbehaves and denies coverage for your medical bills?

    Patsy Bates found out when a California court awarded her 9 million dollars for damages.

    Her insurance carrier, Health Net cancelled coverage when she needed breast cancer treatment.

    Her lawyer, William Shernoff, not only read the book, he wrote the book: “Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up”.

    Bravo for LA City Attorney Delgadillo and New York City Attorney General Andrew Cuomo for going after the health insurance industry for fraudulent practices such as cancellation for pre-existing conditions and underpayment for out-of-network doctor bills.

    To read more:

    http://jeffreydach.com/2008/02/24/fighting-the-abusive-practices-of-health-insurance-companies-by-jeffrey-dach-md.aspx

    Making Your Health Insurance Company Pay Up by Jeffrey Dach MD

    Jeffrey Dach MD
    http://www.drdach.com

  2. Clyde Winter says:

    This site is such an excellent and important resource for anyone seeking straight talk info about the health care crisis, or about the influence of big money on “our” government.

    Jack’s business experience in the health care industry has provided him with practical, technical savvy. His concise, pithy articles dispel the persistent myths that afflict us all. And he provides pertinent, authoritative references for further investigation and adult self-education.

    Jack Lohman is definitely NOT one of that all-too-common breed of political commentators that peel crank opinions off the top of the head. Jack is not a hired gun, and he does not shoot from the hip.

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