Health Savings Accounts - An Update

• Abstract
• Characteristics of this policy
• Purpose and process analysis
• Expected outcome
• References

Abstract

Health Savings Accounts are tax-exempt accounts for health care expenses. Established by the 2003 Medicare Modernization Act, these accounts must be accompanied by high-deductible health plans. Over the past five years, enrollment in these plans has grown modestly; the fastest growth has occurred in the small group market. The impact on costs and utilization continues to be mixed.

Neue Entwicklungen

Health Savings Accounts (HSAs) were established in law by the 2003 Medicare Modernization Act. These tax-exempt accounts for health care expenses are owned by employees and can be transferred to different health plans or jobs. Both employees and employers can contribute to HSAs, but contributions are not mandatory. HSAs must be accompanied by a high deductible health plan (HDHP) with a minimum deductible of $1100 for individuals and $2200 for families in 2008. Maximum out-of-pocket spending in 2008 was limited to $5,600 for individuals and $11,200 for families. 

Enrollment in HSA/HDHPs has grown modestly. In 2008, 11 percent of firms providing health benefits to employees offered a HSA/HDHP plan compared to 6 percent in 2006. America's Health Insurance Plans (AHIP)  estimated than 6.1 million individuals were enrolled in HSA/HDHP plans in January 2008, compared to 4.5 million in 2007, and 3.2 million 2006. Between 2007-08, the fastest growth in HSA/HDHP plans occurred in the small group market; coverage increased from approximately 25 percent to 30 percent of overall HSA/HDHP enrollment (AHIP 2008, Claxton 2008). 

The effect of HSA/HDHPs on cost and utilization continues to be mixed. Critics have primarily been concerned with favorable selection in these plans and under utilization of services. Proponents argue that they will encourage cost conscious decision making and reduce medical care spending. There is some evidence to support favourable selection; an EBRI/Commowealth Fund survey found that enrollees in HSA/HDHPs are more likely to be in excellent or good health, less likely to report a health problem, and less likely to smoke. Enrollees were also more likely to have higher incomes, and be young male college graduates between the ages 21-34 (EBRI/CMWF 2008). 

Recent studies have found no significant different in preventive service use between HSA/HDHP enrollees and those with more comprehensive benefits; 84 percent of HSA/HDHP plans in both the employer and individual markets provide first dollar coverage for preventive services. In addition, no significant differences were found in the number of times HSA/HDHP enrollees filled a prescription, had a physcian visit, overnight hospital stay, or received diagnostic services (e.g., MRIs). Enrollees with chronic conditions were also asked about their adherence to recommended treatment plans. Those with arthritis or hypertension were significantly less likely, while those with depression were significantly more likely to follow the treatment plan than enrollees in comprehensive benefit plans. A study using claims data from a large employer found a small reduction in prescription drug utilization by employees with chronic illnesses. Although enrollees in HSA/HDHP plans report similar rates of utilization, they are more likely those with comprehensive benefits to report delaying or skipping health care due to costs; low income enrollees and those with chronic illnesses are especially likely to do so (EBRI/CMWF 2008; AHIP 2007; Rowe 2008; Dixon 2008, Parente 2008).  

Average total monthly premiums for HSA/HDPHs are slightly lower compared to other plan types, however, when employer contributions to the account are included, costs do not differ significantly among the plans. There are no significant differences in the employee share of the monthly premium. However, employee cost sharing in HSA/HDHP plans  at the point of service is much higher - the average deductible was $1,459 for individuals, compared to $30 in HMO, $94 in POS, and $261 in PPO plans. These plans also use coinsurance - a percentage of the total cost- rather than fixed copayments for physician visits, which places a higher financial burden on consumers (Tyson 2008).

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral
current    previous

The concept of health savings accounts is not new, and has been proposed in Congress for over ten years. However, these plans have encouraged insurers to improve the cost and quality information available to consumers.

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Initiators of idea/main actors

• Regierung: HSAs were a key component of President Bush's health care plan in 2004, and his administration continues to support their expansion.

• Kostenträger: Insurers will continue to expand their offering of these plans as enrollment grows. They are also focusing on improving the cost and quality information available to consumers.

• Patienten, Verbraucher: Consumers have not enrolled in these plans in large numbers, likely due to their complexity and potentially high out of pocket costs. There are concerns of under utilization among low income individuals and those with chronic conditions.

• Privatwirtschaft, privater Sektor: Large employers generally offer HSA/HDHP plans alongside more comprehensive benefit plans as part of a wider strategy to control costs. The fastest growth has occurred in the small employer market, where they are often the only plan offered to employees .

• Politische Parteien: Members of the Republican Party support HSA/HDHP plans and continue to indtroduce bills to expand enrollment and improve its tax advantages.

Stakeholder positions

Republican Party:  John McCain, the 2008 Republican Presidential nominee has included the expansion of HSAs in his plan for health care reform (White House 2008; McCain-Palin 2008). HSAs already were a cornerstone of President Bush's health plan in the 2004 Presidential election, and he has continued to promote their expansion. The Republican party supports this effort; several bills have also been introduced by Republican Congress members to expand HSA enrollment but none have passed into law. 

Consumers: When employees are provided with choice, less than 20 percent choose HSAs. However a majority of employees enrolled in HSAs are not offered a choice of plans by their employer. The design of these plans is complex - employees must become familiar with tax rules which set contribution limits to accounts, and determine which services qualify as medical expenses. Employers have reported spending a year or more educating employees about these plans before they are offered. However, enrollment is expected to increase as familiarity with these plans grows.  Federal legislation in 2006 which increased the maximum amount that employers and employees can contribute to accounts may make them more appealing to high wage employees (Tyson 2008; Gabel 2006).

Employers: Support for HSAs may depend on the characteristics of employers. Large employers continue to view comprehensive health benefits as an important recruitment and retention tool. Although the number offering these plans has increased, HSA/HDHPs are generally offered with other plans as part of a broader strategy to encourage cost conscious decision making. Employers in high turnover industries are reluctant to contribute to these accounts since they are owned by employees and can move with them to different jobs. Offer rates among public employers continues to remains low. Public sector employees have traditionally been offered generous health benefits; their highly unionized workforces are reluctant to accept higher employee cost sharing. Small employers tend to offer HSA/ HDHPs as the only plan option and usually do not contribute toward the spending account. Among low wage small employers, HSAs may offer the final alternative for firms to continue offering health benefits. Small employers with high-salary employees may offer HSAs because of their tax benefits (Tyson, 2008).

Insurers: Insurance companies are actively promoting HSA/HDHP plans as enrollment continues to grow. Of the 97 insurance companies who responded AHIP's 2008 survey, 66 had HSA/HDHP enrollment in the individual market; 88 had enrollment in the small-group market; and 89 had enrollment in the large-group market. Fourteen had more than 100,000 lives enrolled in these plans, compared to 11 in 2007 and 7 in 2006 (AHIP, 2008). 

Actors and positions

Regierung
Bush Administration	sehr unterstützend		stark dagegen
Kostenträger
Insurers	sehr unterstützend		stark dagegen
Patienten, Verbraucher
Consumers	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Employers	sehr unterstützend		stark dagegen
Politische Parteien
Republican Party	sehr unterstützend		stark dagegen
current    previous

Influences in policy making and legislation

Members of the Republican Party have introduced legislation since the 2003 MMA which focuses on increasing the tax advantages of HSAs to encourage enrollment.

• The Tax Relief and Health Care Act of 2006 included provisions to  increase the annual HSA contribution limit by employers and employees; allow greater employer contributions for low wage employees; allow a one-time transfer of funds from individual retirement accounts (IRAs) to HSAs; and allow rollovers from flexible spending or health retirement accounts to HSAs through 2011 (GovTrack.us).
• The Medicare Health Savings Accounts Act of 2007 proposes to establish Medicare Part E (Medicare Health Savings Accounts) under which beneficiaries can receive benefits through HSAs (not passed).
• The Promoting Health for Future Generations Act of 2008 proposes to increase the tax deduction for contributions to HSAs; allow a new tax deduction for high deductible health plan premiums; and allow individual contributions to a Medicare Advantage MSA (not passed).
• The Increased Access to Health Insurance Act of 2008 proposes to allow the use of HSAs to purchase health insurance in the individual market (GovTrack.us),  (not passed).

Legislative outcome

n/a

Actors and influence

Regierung
Bush Administration	sehr groß		kein
Kostenträger
Insurers	sehr groß		kein
Patienten, Verbraucher
Consumers	sehr groß		kein
Privatwirtschaft, privater Sektor
Employers	sehr groß		kein
Politische Parteien
Republican Party	sehr groß		kein
current    previous

Positions and Influences at a glance

Adoption and implementation

None of the bills introduced since the 2006 Tax Relief and Health Care Act have been passed.

Monitoring and evaluation

 N/A

Expected outcome

Eleven percent of the population are enrolled in high deductible health plans that qualify for a health savings account, however, 42 percent of these individuals have not yet opened an account (EBRI, 2008). This number is expected to increase as familiarity with these plans grows, and due to the recent regulations which rasied contribution limits to these accounts. Employers also remain interested in these plans as a potential vehicle to save costs,  however educating employees about these plans remains a challenge. HSAs could receive further support if John McCain, the Republican Presedential nominee is elected.  

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch
current    previous

The impact of HSA/HDHPs continues to be unclear due to relatively low levels of enrollment compared to other plans, and few studies which evaluate the effect of these plans on costs and utilization.

References

Sources of Information

• Gary Claxton, Jon R. Gabel, Bianca DiJulio, Jeremy Pickreign, Heidi Whitmore, Benjamin Finder, Marian Jarlenski, and Samantha Hawkins. Health Benefits In 2008: Premiums Moderately Higher, While Enrollment In Consumer-Directed Plans Rises In Small Firms. Health Affairs Web Exclusive, September 24, 2008  
• AHIP Center for Policy Research. JANUARY 2008 Census shows 6.1 million people covered by hsa/high-deduc tible health plans. www.ahipresearch.org/pdfs/2008_HSA_Census.pdf
• John W. Rowe, Tina Brown-Stevenson, Roberta L. Downey, and Joseph P. Newhouse. The Effect Of Consumer-Directed Health Plans On The Use Of Preventive And Chronic Illness Services. Health Affairs, January/February 2008; 27(1): 113-120.
• AHIP Center for Policy Research. A Survey of Preventive Benefits in Health Savings Account (HSA) Plans, July 2007. www.ahipresearch.org/pdfs/HSA_Preventive_Survey_Final.pdf
• AHIP Center for Policy Research. A Survey of Preventive Benefits in Health Savings Account (HSA) Plans, July 2007. www.ahipresearch.org/pdfs/HSA_Preventive_Survey_Final.pdf
• Paul Fronstin and Sara Collins. Findings From the 2007 EBRI/Commonwealth Fund Consumerism in Health Survey. EBRI Issue Brief #315
• ST Parente, R Feldman, and SChen. Effects of a Consumer Driven Health Plan on Pharmaceutical Spending and Utilization. Health Serv Res. 2008 May 13. 
• Anna Dixon, Jessica Greene, and Judith Hibbard. Do Consumer-Directed Health Plans Drive Change In Enrollees' Health Care Behavior? Health Affairs, July/August 2008; 27(4): 1120-1131.
• Ann Tynan, Jon B. Christianson. Consumer-Directed Health Plans: Mixed Employer Signals, Complex Market Dynamics. Center for Studying Health System Change. Issue Brief No. 119 March 2008.
• Jon R. Gabel, Jeremy D. Pickreign, Heidi H. Whitmore. Behind the Slow Growth of Employer-Based Consumer-Driven Health Plans. Issue Brief No. 107 December 2006
• GovTrack.us. S. 173--110th Congress (2007): Medicare Health Savings Accounts Act of 2007, GovTrack.us (database of federal legislation) www.govtrack.us/congress/bill.xpd?bill=s110-173
• GovTrack.us. H.R. 2948--110th Congress (2007): Increased Access to Health Insurance Act of 2007, GovTrack.us (database of federal legislation) www.govtrack.us/congress/bill.xpd?bill=h110-2948

Author/s and/or contributors to this survey

Tanaz Petigara and Gerard Anderson

Empfohlene Zitierweise für diesen Online-Artikel:

Petigara, Tanaz and Gerard Anderson. "Health Savings Accounts - An Update". Health Policy Monitor, October 2008. Available at http://www.hpm.org/survey/us/b12/4