Getting policymakers to understand the value of health savings accounts (HSAs) may best be done by introducing them to constituents who own HSAs or high-deductible health plans (HDHPs).
That was the purpose of a March 29 briefing on Capitol Hill sponsored by America’s Health Insurance Plans (AHIP) and the National Association of Health Underwriters (NAHU). All seats were taken, and people lined the back of the room as congressional staff and media heard HSA owners and insurance brokers discuss why HSAs work for them.
“One of my small business customers moved to an HSA/HDHP health plan so they could hang onto coverage,” said Misty Baker, an insurance agent from Austin, Texas. “Soon after, they were blessed with three beautiful babies. Like all infants, those babies needed lots of preventive care. One of the strong points of their HSA plan–in addition to lower premiums–is that it covers all the well-baby care, like routine immunizations, even before their deductible is met. This gave mom and dad peace of mind, not to mention some extra money left over for diapers.”
When John Ghysels’ father was 48, he had a massive heart attack and required triple-bypass surgery. Ghysels, of northern California, is now in his 40s and trying to avoid his father’s experience partly by taking cholesterol-lowering drugs.
“Some people say you shouldn’t be in an HSA if you think you might have health expenses,” Ghysels said. “I disagree. I am saving about $80 a month on premiums, which helps free up dollars for other medical expenses. Second, having an HSA has made me conscious of prices, and I have found some ways to get real bargains. For example, I’ve saved about 75 percent off the price of prescription drugs by doing simple things like buying from discount outlets, such as Drugstore.com and Costco. I found they charge about 67 percent less for my generic medications than the corner retail drug stores.
“On my brand name medication, I learned that the manufacturer charged the same for a 40-mg dose as they did for a 10-mg dose,” Ghysels said. “So, in accordance with the manufacturer’s instructions and my physician’s permission, I simply split my pills. This allows my 90-day supply to last me for an entire year. It was easy, perfectly safe, and cost me lots less than even my old HMO co-pay. Just imagine if we approached all of health care this carefully. I think it would be a good thing.”
Chris Krupinski, a widow with three children living in Fairfax, Virginia, has run her own business for the past decade. But she said she found it difficult to stay with one health insurance company during that time, because the premiums would rise every 18 months.
Before purchasing her HSA/HDHP in 2004, Krupinski’s PPO policy cost her $10,800 a year in premiums and carried a $2,000 deductible. When HSAs were created, she learned she could get one for $4,200 a year with a $3,500 deductible. Now, she said, she comes out ahead in several ways.
“Every month, I put about $350 into my HSA and pay $350 for the premium,” Krupinski explained. “That HSA is my money, and yet I am still paying less per month than I was under the old policy. As far as I’m concerned, I look at my deductible as a ‘no-deductible’ plan. The beauty of this is that if I have anything left over at the end of the year, that money is mine. It gives me options, and it is much better financially.
“Before, when I wrote those premium checks out each month, that money was just gone,” Krupinski noted. “Also, my business is somewhat cyclical, so in the summer, when business and my income slow down, I have the flexibility to put less into my HSA.”
Ronnie Miles, a 36-year-old Democrat from Baltimore, had to make a choice between health insurance and his mortgage when he formed his own consulting business three years ago. He chose the mortgage, going without coverage for two years.
But he’s found that in addition to paying his medical expenses, an HSA has several other advantages over more traditional plans.
“I have already used my HSA money to pay for dental visits, eye exams, and glasses,” Miles said. “These services were not covered under my more expensive PPO, but by using the HSA dollars, I could use pre-tax dollars and get negotiated rates.”
A Gallup poll released the last week of March revealed Americans believe their most pressing concern is the “availability and affordability of health care,” with 68 percent saying it worried them “a great deal.” Not the war. Not terrorism, not the economy. Congress has the chance to press for more market-based solutions to ensure more choices like HSAs are available. If their political radar is working, they will listen.
Laura Clay Trueman ([email protected]) is executive director of the Coalition for Affordable Health Insurance and senior director of Jefferson Government Relations in Washington, DC.
For more information …
For more information on who is purchasing HSAs, read the AHIP report, January 2006 Census Shows 3.2 Million People Covered By HSA Plans, available online at http://www.ahipresearch.org.