09/2001: The Pulse

Published September 1, 2001

Lots of people are making the connection that MSAs are a better way to empower patients than are lawsuits after someone is dead or injured.

The Florida Times-Union argues the PBOR is actually a “trial lawyers’ bill of rights.” It notes trial lawyers donated $124 million to politicians last year, and says the new legal liability and mandates in the PBOR would “increase HMO costs, which will result in people dropping coverage . . .” The article concludes, “there is another step that could be taken to reduce over utilization and the third-party effect. Medical savings accounts would mean that patients would pay their own money for routine health care…” Source: http://www.jacksonville.com/tu-online/stories/071201/opi_6658822.html

The Orange County Register says, “the clamor for an unlimited right to sue HMOs is almost non-existent beyond the Beltway and the trial lawyers’ guild.” It calls the House-passed version “a classic example of Republicans latching onto a bad Democratic idea and pushing for a slightly-less-worse alternative.” It regrets Bush missed an opportunity to push instead for real market-oriented reforms. Source: http://www.ocregister.com/ “Bush Scores Some Hollow Victories,” editorial, August 5, 2001

The Washington Times agrees, saying, “the House bill still promulgates an invasive, heavy-handed regulatory regime.” It, too regrets “neither bill expands individual choice of health care plans, which is at the root of true reform.” Source: http://www.washtimes.com/op-ed/20010807-1048744.htm

The Atlanta Constitution also weighs in, saying, “the agreement isn’t what this country’s patients deserve.” It adds, “any self-respecting Patients’ Bill of Rights ought also to expand Americans’ options and independence. And that means greater access to medical savings accounts.” Source: http://www.accessatlanta.com/ “Health Care Costs: Legislation That Would Price Patients Out of Health Plans Must Offer Option of Medical Savings Accounts” August 3, 2001

House Speaker Dennis Hastert (R-Illinois) tries to address these concerns in an op-ed in the Boston Globe (of all places). He maintains “these protections (in the PBOR) will provide better quality care for the insured—but what about the uninsured? A patient without coverage would not benefit at all. That’s why we also focus on providing quality health care to the 43 million Americans without coverage” by expanding MSAs and creating Association Health Plans. Source: http://www.boston.com/globe/ “Putting Patients First,” by Dennis Hastert, August 4, 2001

In the Detroit News is another one of those “this is what an MSA is” articles. It’s a that these articles are still needed five years after HIPAA was passed, but at least this one doesn’t bother going to Consumers’ Union for its usual “MSAs stink” reaction. Instead, the article concludes, “MSAs are simply a more cost-effective option for medical coverage . . .” Source: http://detnews.com/2001/business/0108/05/c03-261319.htm

Pick Your Favorite Study

Two recent reports draw completely opposite conclusions about worker perceptions of their health care. The first one is headlined, “Study Shows Employees Don’t Understand Their Health Plan Benefits and Options.” D.S. Howard & Associates surveyed 101 benefits management professionals at firms with 500 or more employees.

The other study is headlined, “Consumers Express Benefits Satisfaction and Increasing Savvy.” Commissioned by Employee Benefit News, Matthew Greenwald & Associates conducted telephone interviews with 300 employed adults.

The conclusion may be that HR managers think their workers are a lot dumber than the workers really are—not a big surprise. Source: For information on the D.S. Howard study, contact Rich Ringer at 312/649-0371 or [email protected]. For the EBN article, go to http://www.benefitnews.com/subscriber/01_06_15/feature1.htm

Defined Contribution

Yet another study says employees are willing to pay more for more choice. They favor Defined Contribution but aren’t ready for employers to get out of benefits administration. Watson Wyatt interviewed 255 large employers and surveyed over 10,000 workers at 18 organizations.

Seventy-nine percent of employers think having more choice would “increase employee confusion,” and only 50 percent think it would “improve employee satisfaction.” Small wonder, then, that 39 percent of workers favor defined contribution, while only 23 percent oppose it. Source: The press release is available from Tricia Alvarez at 202/715-7094 or [email protected]. The complete study may be purchased at http://www.watsonwyatt.com/homepage/us/res.htm

Ready or Not

MyHealthBank, having enrolled 3,000 Defined Contribution members in Oregon, is now entering the Washington market, according to an article in the Spokesman-Review. While MyHealthBank is working with Regence Blue Shield in Washington, Premera Blue Cross (a rival company) is also looking to launch a consumer-driven product in that state. Source: http://www.spokesmanreview.com/news-story.asp?date=080301&ID=s1001016

UNICARE, the WellPoint subsidiary, is taking its Defined Contribution approach to Illinois. The “FlexScape” plan allows employers to decide how much they want to pay per employee per month—$80, $100, or any amount over $100—and employees then choose which of five benefit options best fit their budgets and needs. Employee payment is tax-favored, presumably through a Section 125 Premium Conversion plan. Source: For information go to http://www.unicare.com or contact Kellie Bernell at 805/557-6755 or [email protected]

A Word on S-CHIP

The Urban Institute has released new reports on problems in the S-CHIP program. The press release notes “public health insurance programs have the potential to reach 80 percent of uninsured children, yet many eligible children still lack coverage.”

This has been an issue ever since the program began. Policymakers assumed people would rush to enroll their kids. When that didn’t happen, they assumed it was because people hadn’t heard of the program. They invested many millions of dollars into “outreach” programs, including printing information on pizza boxes.

Even after all that, few parents have enrolled their kids. To find out why, UI surveyed 2,485 low-income families and found 88 percent had heard of S-CHIP and Medicaid, but 76 percent of those never inquired about the program.

Of those who had heard of the program but had not inquired about it, 40 percent said they “did not need or want the program.” Thirty percent said they didn’t think their child was eligible, and 14 percent thought there was too much administrative hassle involved.

Of those who said they didn’t want the program, 96.8 percent said they were in excellent or good health. And there is the rub. In a “guaranteed issue” environment where you cannot be turned down for coverage and you know you can quickly get coverage when a need arises, why bother enrolling ahead of time? It may frustrate policymakers who want to be able to count enrolled noses, but it makes perfect sense to real people living real lives. Source: For the press release, go to http://www.urban.org/news/pressrel/pr010702.html. There are links to the actual reports in the release

At Long Last

Cato has released a long-awaited paper by Victoria Craig Bunce, “Medical Savings Accounts: Progress and Problems Under HIPAA.” The paper is a comprehensive review of the reasons why HIPAA-enabled MSAs have not been more successful and includes data on Cato’s own experience with MSAs for its employees. The paper is Policy Analysis No. 411 and is available on Cato’s Web site at www.cato.org.

Greg Scandlen is senior fellow in health policy as the National Center for Policy Analysis located in Dallas, Texas. To sign up for his free weekly e-newsletter send an email to: [email protected]. Scandlen can be contacted at [email protected].