In case you missed it, Governor Mitch Daniels has an op-ed in the Wall Street Journal that describes Indiana’s experience with Health Savings Accounts. Thanks to the 70% of state employees who signed up, HSA’s have lowered costs and waste, while saving taxpayers millions in premium dollars. Here’s a clip from today’s WSJ:
State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative. In the second straight year in which we’ve been forced to skip salary increases, workers switching to the HSA are adding thousands of dollars to their take-home pay. (Even if an employee had health issues and incurred the maximum out-of-pocket expenses, he would still be hundreds of dollars ahead.) HSA customers seem highly satisfied; only 3% have opted to switch back to the PPO.
Most important, we are seeing significant changes in behavior, and consequently lower total costs. In 2009, for example, state workers with the HSA visited emergency rooms and physicians 67% less frequently than co-workers with traditional health care. They were much more likely to use generic drugs than those enrolled in the conventional plan, resulting in an average lower cost per prescription of $18. They were admitted to hospitals less than half as frequently as their colleagues. Differences in health status between the groups account for part of this disparity, but consumer decision-making is, we’ve found, also a major factor.–Click here to read the full article at WSJ
Unfortunately, HSA’s could be a thing of the past under federal health care reform proposals. Consumer-driven health plans are socialized in a federal bureaucracy that will design insurance plans and set benefits. As a result, federal health plan benefit mandates will make it less likely that insurers can afford to offer the low-premium plans that HSA’s support.
Solutions that empower consumers should be the cornerstone of health care reform, but are instead cut out completely in favor of a government-directed system. Success stories like the one Gov. Daniels described today will hopefully encourage Congress to focus on market-driven solutions proven to lower costs and insure more Americans.
