The reported findings of the latest Commonwealth Fund study, “Job-Based Health Insurance in the Balance: Employer Views of Coverage in the Workplace,” shouldn’t be taken at face value.
Commonwealth Fund suggests the big news is that employers themselves support an employer mandate. The press release’s first paragraph says, “Employers strongly support providing health coverage for their workers, with a majority even backing a mandate that companies either provide such benefits or pay into a fund to cover the uninsured.”
The report itself finds, “Among the policy options presented to them, a majority of employers expressed interest in new group insurance options that would require them to make premium contributions for their employees.”
Wow! Yikes! A majority of employers support mandatory coverage?! How can that be?
It can’t be, and it isn’t. The only way Commonwealth Fund was able to get such a result was by limiting the “policy options presented” to two: “Expand public insurance” or “Require employers to offer benefits or contribute to the cost.” No other option was available.
This is like giving survey respondents the option of death by hanging or death by drowning, then announcing “56 percent of all people want to die by drowning!”
The truth, of course, is buried back in the data tables, which very few people will bother to read. The Commonwealth Fund survey also found:
- Employers strongly support, and are strongly willing to cooperate with the administration of, tax credits for workers. Eighty-three percent would be willing to “reduce an eligible employee’s withholding tax by the amount of a tax credit,” and 77 percent would be willing to “collect a tax credit and apply it to an employee’s share of their health insurance premium.”
- Fifty-three percent of employers who currently offer coverage would support “federal premium assistance to pay 60% – 75% of COBRA.”
- Ninety-three percent would be “willing to provide employees with information about applying to Medicaid and CHIP,” while 75 percent would be willing to use payroll withholding to make premium contributions to Medicaid/CHIP.
- Eighty-six percent of employers think it is important to “share in the cost of health insurance for employees,” either by providing coverage or making a contribution to the costs.
HSAs of Little Account: Ginsburg
Paul Ginsburg, president of the Center for Studying Health System Change, has written an article critical of HSAs, titled “Tax-free But of Little Account,” for Modern Healthcare.
He makes some good points, such as that the IRS prohibition on “stacked” deductibles means a family must incur at least $2,000 in expenses before coverage kicks in, even when only one family member is using services. That was a regulatory mistake dating back to the Clinton-era IRS interpretation of Archer MSAs. It would be better for the family deductible to be a multiple of individual deductibles.
But Ginsburg uses this problem to dismiss the potential of HSAs in the market, preferring instead the tiered co-pay approach many employers have adopted, especially for prescription drugs but increasingly for hospital services as well. He notes “leading-edge employers and insurers are avoiding the use of large deductibles. Instead, they are developing financial incentives to steer patients to efficient providers.”
I’m not sure what “leading-edge” means, but the fact is, while tiered co-pays are fairly common for drugs, they are not for hospital and physician services. Only about 5 percent of HMO and PPO enrollees are subject to them, according to Kaiser Family Foundation’s most recent survey of employer health plans.
Employers everywhere are increasing deductibles, coinsurance, co-pays, and premium shares for employees. When comparing HSAs to other types of health plans, one must consider the total out-of-pocket obligation, not just deductibles.
Ginsburg ignores a second problem: that any form of tiered co-pay continues to insulate patients from the true cost of the care provided and fails to address the underlying dynamic of a failed system of third-party payment and third-party rationing.
People in the field selling HSAs report the greatest selling point is not whatever savings may accrue, but the increased information and control the plans offer. People are tired of being “steered” by faceless bureaucrats with suspect motives. They will do their own steering, thank you. That is the genie that is being released, and it is not about to get shoved back into the bottle. Source: http://www.hschange.org/content/653/
Survey Predicts Tripling of Enrollment
Certainly one place to find “leading-edge employers” is in the National Business Group on Health (NBGH, formerly the Washington Business Group on Health). They seem to be quite comfortable with, even enthusiastic about, consumer-driven health care.
NBGH recently conducted a survey with the Watson-Wyatt consulting group on employer attitudes and activities in this arena.
The survey finds 32 percent of large employers plan to offer a consumer-driven plan next year, up from the 21 percent currently offering such coverage. The survey also predicts enrollment in such plans will triple in 2004. Seventy-six percent of employers offering consumer-driven plans “said employee enrollment in the first year of the program was either at or above the expected level,” according to the press release, with enrollment ranging from 1 percent to 33 percent of eligible employees.
Employers who have not offered consumer-driven plans were asked why. Twenty-nine percent said there isn’t enough experience with such plans yet, and 20 percent doubted such plans would effectively manage costs.
Watson-Wyatt spokesman Ted Chien said, “[W]ith the creation of Health Savings Accounts, employers should take the time now to determine whether a consumer-directed health plan is right for their organization. HSAs may be the added ingredient that makes consumer-directed plans right for more organizations.”
Over-Charging the Uninsured
Hospital pricing is heating up as one of the key issues in the care of “self-pay” patients, including both the uninsured and those with HSAs. The person who has done the most to bring attention to this issue is K.B. Forbes, one-time spokesman for Steve Forbes.
K.B. Forbes has organized Consejo de Latinos Unidos, a group focusing on uninsured Hispanics, who are often charged for hospital care three and four times as much as anyone with health insurance who does not pay cash. Forbes calls it price-gouging, and he has wrested some concessions from the Tenet hospitals in California. Unfortunately, the hospitals tend to give price breaks only to patients they deem needy, not to others who simply prefer to pay cash.
Forbes’ attention now is focused on Florida and the HCA hospitals, which he calls “the worst abuser of price-gouging” in the country. He isn’t confining his efforts to for-profit hospitals, but is also tackling the Seventh Day Adventist Florida Hospital and Orlando Regional.
The Florida Hospital Association is fighting back, defending its discounts and also hinting Forbes is part of an insurance industry conspiracy–an odd accusation since he is critical of insurance discounts.
Greg Scandlen is director of the Galen Institute’s Center for Consumer Driven Health Care and assistant editor of Health Care News. His email address is [email protected].