Making Sense of HDHPs

Published June 1, 2007

For some, high-deductible health plans (HDHPs) and health savings accounts (HSAs) can seem perplexing. But with a little instruction, they can be made much simpler.

“You do not have to be an expert in insurance to understand this,” said Lee DeTurk, HSA officer for Tower Bank in Fort Wayne, Indiana.

The high-deductible health plan actually is an old concept, DeTurk said, yet it still suffers from a lack of understanding.

“We spend a lot of time educating the work force about this process, which is key to both groups, the employer and the employee, because they are concerned about what happens to their money,” DeTurk said.

Proactive Approach

Tower Bank takes a proactive approach to educating consumers about the HSA process. Bank representatives go out to organizations on a monthly basis and, in some cases, meet with individuals one on one.

“We do a lot of PowerPoint presentations, and we make it very plan specific,” DeTurk said “We offer employer groups a presentation whenever they request it, and we do spouse presentations. We feel this is really important. Even in the smallest of towns in the state of Indiana, HSAs have become a reality.”

Twelve of the 25 employees at Martin Riley Architects & Engineers in Fort Wayne are enrolled in the company’s HDHP. In order to keep their employees abreast of changes in the plan, the firm periodically will invite its broker in to explain new regulations and any changes that may affect their health plan for the year.

“Our employees usually have a few questions but it is presented very well, and our agent offers an Excel spreadsheet that they can use on their personal computers to forecast what their medical needs may be throughout the year,” said Diane Cawvey, office manager for Martin Riley. “After that educational process it really is pretty straightforward.”

Fee Transparency

HSAs have placed more responsibility on consumers, who must educate themselves about the cost of medical procedures, pharmaceuticals, and surgeries. To help with that, Anthem, one of the nation’s largest health insurance companies, is pioneering a process called “fee transparency,” with information available at the click of a computer mouse.

“In my opinion, the only way HSAs are going to work is if we have fee transparency,” said Chad Burch, president of Phillips Benefits Advisors in Fort Wayne. “Fee transparency literally spells out the cost of a procedure.

“Let’s say a person needs a gall-bladder procedure. They can now get online and view all of the providers in their area that are in their particular network and get the minimum and maximum [price] range for the procedure. That includes all of the fees the surgeon, hospital, anesthesiologist, radiologist, etc., will charge. It’s a bundled package.

“Frankly, that’s why I give credit to the Bush administration,” Burch said. “It is not a short-term solution. It may cause short-term pain, but in my mind, it is the only long-term solution that I see.”

Judi E. Loomis ([email protected]) writes for the Greater Fort Wayne (Indiana) Business Weekly, where this article originally appeared on April 6. Reprinted with permission.