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Old 04-08-2012, 02:43 PM   #121
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Potter says claims are paid at a far less rate than in standard insurance plans. What is of greater concern is that people are avoiding preventive care because of the expense:

Largest study of high-deductible health plans finds savings, less preventive care

HSAs and high-deductible plans seem to be little more than an effort to cost-shift from employers to employees. Theory is that patients would only seek care that they need, not just go to the doctor for frivolous reasons.

But if people are just delaying care or skipping some types of care altogether, then they will likely require more expensive care later. So there isn't the cost savings that the HSA/high-deductible proponents claim.

Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.
I don't see that people choosing less preventative care in any way makes an HSA a scam. I didn't see anything in the studies to indicate that they allowed for the possibility that many people that choose HSAs do so because they don't have dependents, or pre-existing conditions, or even health problems in general. Choosing an HSA isn't shifting costs from employers to employees, either. It's an employee making a decision to decrease their own costs, then make a decision as to whether they should go to a doctor themselves. Maybe the bias in the studies is that people who have HMO/PPO plans go to the doctor more often than they need to, driving up costs all around. I think that like many things that involve personal choice, an HSA works well for some and not so much for others. All of this is outside the influences of Obamacare, though. If it happens I think there will need to be some shake out time to see how every aspect of medical care will be impacted.
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Old 04-08-2012, 02:47 PM   #122
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It's easy enough to allow low/no deductibles under high-deductible plans for immunizations/well baby care/screenings that have been shown to reduce costs overall. Many policies already allow this.
The insurance we have has a co-pay for Dr visits, except approved screenings which have zero charges. These include annual physical and associated tests. Last month DW had a "well-woman" check-up which included blood work, bone density scan, pap-smear and mammogram. I would have thought it great value to have paid the usual $30 co-pay, but at zero cost it is even better.

I assume that since this is retiree insurance through my ex-employer they are able to take the long view and decide that it is better, cost-wise, to encourage all participants to get these screening tests done by providing them at no charge.
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Old 04-08-2012, 02:52 PM   #123
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But it's common sense, that if screening for chronic conditions like diabetes is being skipped, then the care for those conditions are going to become more expensive later.
It's "common sense" that a high-deductible health insurance provider has every incentive to encourage screenings, etc to help reduce the very large costs (that they'll have to pay) that result when effective preventative care is avoided.
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Old 04-08-2012, 03:10 PM   #124
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Unless, that is, they're counting on cost savings from more people dying off than would have been the case if they weren't covered under this scam.
It may not be what you like, but it seems pretty provocative to call it a "scam" and using emotional phrases such as suggesting they are letting people die just to pad profits. Is that really what you wanted to say?

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It's "common sense" that a high-deductible health insurance provider has every incentive to encourage screenings, etc to help reduce the very large costs (that they'll have to pay) that result when effective preventative care is avoided.
Indeed, many if not most HDHPs attached to an HSA (mine included) provide first-dollar, no-deductible preventative services as appropriate by age and gender. This is a win-win situation in this case since patients are not discouraged from preventative care and the insurers know that catching a potential future problem today, before it becomes a big problem, is good for their bottom line too.
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Old 04-08-2012, 03:13 PM   #125
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My understanding of HSA and high deductible plans is a lower premium in exchange for assuming more risk. The trade off between the two may not be perfect, but there is no evidence of anything unlawful or conspiratorial, notwithstanding Mr. Potter's book (which I have not read).

People forgoing medical care because they cannot afford is a real problem, but it is not limited to nor the product of high deductible policies.
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Old 04-08-2012, 03:17 PM   #126
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Interesting. Do you know of any data I could review that would bear this out?

If this is the case, it's a market failure . . . .

Perhaps not.

With a low deductible plan, you're combining coverage of routine and predictable expenses with coverage for large unpredictable ones. If we broke this policy into two pieces, the routine coverage portion would have fairly low margins whereas the catastrophic coverage would need to have high margins to compensate for the greater degree of risk and uncertainty. HSA plans act more like the second half, so it makes sense they'd have higher margins than a policy including both pieces.

That isn't to say that the individual health insurance market is competitive, it mostly isn't. One reason is the huge switching costs involved. If I'm not healthy, I can't switch at all. If I am healthy, I have to go through the entire underwriting process again, which means putting together at least 5 years of medical history for every company I want a quote from.
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Old 04-08-2012, 03:39 PM   #127
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Originally Posted by explanade
From the press release on the Rand study:

There isn't a study yet because high deductible plans are relatively new and the Rand study, which is the largest study of such plans at the time, only tracked the first year of those plans.

But it's common sense, that if screening for chronic conditions like diabetes is being skipped, then the care for those conditions are going to become more expensive later.

It's clear that this is motivated by cost-shifting, not cost-saving. What incentive do insurers have to reduce costs beyond their own profits? If health care becomes affordable, then people don't need insurers.

You just have to call a spade a spade sometimes.
Note that under current law, the ACA, vaccinations and annual basic checkups including screening are fully covered even under high deductible plans, with no cost sharing. Both DW and DD are on high deductible plans, and we're not charged for the most recent checkup visit or labs. It's effectively all rolled into the insurance premiums.

http://www.healthcare.gov/news/facts...ackground.html
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Are HSAs a Scam
Old 04-08-2012, 03:39 PM   #128
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Are HSAs a Scam

I guess it depends on who you think is getting scammed.

When my Megacorp introduced HSA's it was one of the best free lunches I ever tasted. As a fairly young, healthy, individual I got to jump out of the risk pool, enjoy premiums far lower than for regular insurance, and build up a tax subsidized self insurance fund (a.k.a HSA). If I got chronically sick, I had the annual option of jumping back into the low deductible standard risk pool at the exact same premium I would have paid if I had been healthy.

My total downside was limited to one year's "high" deductible of $5K. Between the HSA tax savings and lower premiums, I think I saved about $4K each year. That means I had $1K at risk the first year the HSA was offered and was permenantly in the black thereafter.
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Old 04-08-2012, 04:03 PM   #129
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I guess it depends on who you think is getting scammed.

When my Megacorp introduced HSA's it was one of the best free lunches I ever tasted. As a fairly young, healthy, individual I got to jump out of the risk pool, enjoy premiums far lower than for regular insurance, and build up a tax subsidized self insurance fund (a.k.a HSA). If I got chronically sick, I had the annual option of jumping back into the low deductible standard risk pool at the exact same premium I would have paid if I had been healthy.

My total downside was limited to one year's "high" deductible of $5K. Between the HSA tax savings and lower premiums, I think I saved about $4K each year. That means I had $1K at risk the first year the HSA was offered and was permenantly in the black thereafter.
HSAs aren't the total answer, but they can be a part of it for those who can afford to self-insure by funding the HSA throughout the year. Even though we've already burned the entire $3,000 deductible this year (was unusual for us), we're still way ahead. Heck, we save $1500/yr in premiums with the HSA option compared to the regular PPO, plus Megacorp contributes $1000/yr to the HSA. That's a $2500 combined savings right there compared to the PPO, and our total deductible is only $500 more than that.

My only concern with it is that it could pull younger and healthier folks out of the pool of insureds, making even more expensive for those more likely to not be able to afford the higher deductibles of an HSA-eligible HDHP. But as long as these plans are there and the laws are on the books, it is the best choice for us.
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Old 04-08-2012, 04:41 PM   #130
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That's the other thing that Potter pointed out. As more people go to HDHP plans, those left on PPO and HMO plans will see their out of pocket costs grow faster.

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As young and healthy people happily desert managed care plans for high-deductible options to take advantage of lower premiums, the folks who remain in the HMOs and PPOs will see their premiums skyrocket, eventually making those plans unaffordable for both employers and their workers.

Former California Insurance Commissioner and now Congressman John Garamendi saw this coming several years ago and did his best to halt the growth of high-deductible plans, but he had no real power to do so. He told reporters in 2005, while still serving as insurance commissioner, that high-deductible plans would eventually result in a “death spiral” for HMOs and PPOs. This would happen, he predicted, as insurers and employers initially cherry-picked the youngest, healthiest and richest customers while forcing managed care plans to charge more to cover the sickest patients.
Looks like the insurance lobby managed to defeat AB 52, that Potter referenced, in the State Senate. Now, there's an attempt to bring that law as a ballot initiative and they're still collecting signatures to get it on the ballot:

Ballot initiative faces opposition from California insurance companies and doctors
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Old 04-08-2012, 06:49 PM   #131
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That's the other thing that Potter pointed out. As more people go to HDHP plans, those left on PPO and HMO plans will see their out of pocket costs grow faster.

Looks like the insurance lobby managed to defeat AB 52, that Potter referenced, in the State Senate. Now, there's an attempt to bring that law as a ballot initiative and they're still collecting signatures to get it on the ballot:

Ballot initiative faces opposition from California insurance companies and doctors
Indeed. Our California HMO declined us for the highest deductible plan, explicitly saying the plan was reserved only for the few applicants in the very best health.

A big factor in the push for this initiative are companies like Aetna's state unit, which has proposed an 8% increase, for a total 30% increase over the last 24 months. According to the Department of Insurance, the Aetna subsidiary that sells health insurance in California earned significant profits in 2011 and paid a $1.7 billion dividend to its parent company last year. Additionally, while the insurance company claims that it needs the rate increase to cover increasing medical costs, Aetna's own data and documents don't support that claim, which also conflicts with national data about medical cost inflation. This annoys folks.
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Old 04-08-2012, 11:09 PM   #132
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It's "common sense" that a high-deductible health insurance provider has every incentive to encourage screenings, etc to help reduce the very large costs (that they'll have to pay) that result when effective preventative care is avoided.
I would think that, too. But I recently paid $300 for a checkup because my plan is grandfathered in.

There must be studies that tell us whether screenings save money.
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Old 04-08-2012, 11:18 PM   #133
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Those high-deductible plans are the insurers' dream because the ratio of premiums collected to claims paid is higher than regular insurance. IOW, bigger margins for them.

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Indeed. Our California HMO declined us for the highest deductible plan, explicitly saying the plan was reserved only for the few applicants in the very best health.
Those demonic companies won't let people into the insurance plans with the biggest profit margins! It's clever and unfathomable all at once.
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