Uncategorized

POLICY/POLITICS: Ezra Klein skewers the HSA, Joe Paduda skewers the CDHP, with UPDATE

(This entry bumped up to top because of fun UPDATE)

Apologies for my later start this morning, those of you who follow my knee problems will perhaps be as pleased as I am to know that I spent the weekend snowboarding with apparently no ill effects on it! But it mean that there’s only limited fodder for THCB written over the weekend.

The good news is that while I’ve been slacking, over at Tapped, Ezra Klein skewers the HSA, reminding us that it’s a destruction of the risk pool. I suspect that educating Bush about health care is like the story of David Stockman trying to explain the budget to Reagan, and realizing that he never had a clue about the difference between real and nominal dollars. One of Ezra’s commenters also points out the obvious–that the HSA will do nothing to reform the underlying problems of the system’s cost explosion, and so is by definition a temporary fix.

Last year, when I bought health insurance for my law firm (me, my family, my paralegal and my secretary) I could get coverage with a five hundred dollar annual deductible for $1,900 a month. I looked through all the options and saw that a plan with a $5,000 annual deductible was $1,200 a month. If there was one with a $10,000 deductible it would maybe cost maybe $900 a month (guessing). With health-care inflation running at 8-10% a year that policy with a $10,000 deductible would soon be prohibitively expensive.

Meanwhile over on his Managed Care Matters blog, Joe Paduda skewers the CDHP, with a big assist from Alain Enthoven. Remember kids, the CDHP is the bastard child of a one night stand between a benefits consultant with nothing to sell and a right-wing think tank that can’t do basic math.

CODA: In the transcript of the debate between Enthoven and Reggie Herzlinger on the KaiserNetwork site, Reggie’s comments have all been excised. I wonder whether there’s censorship of some kind here, or whether she was so embarrassed at what she said that she asked for them to be pulled…anyone who knows the truth please get in touch!

UPDATE: Reggie apparently did ask the Kaiser people not to publish her remarks. So was she chicken embarrassed, or was it a bad hair day, or was she selling her schtick to someone else for an exclusive?

Livongo’s Post Ad Banner 728*90

23
Leave a Reply

23 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
9 Comment authors
Medical InsuranceMy Two CentsAnonGene Ennisspike Recent comment authors
newest oldest most voted
Medical Insurance
Guest

All comment is Nice & very helpful…. There is no need to give any suggestion by me.
—-thank you—-
daamin
—————–
Medical Insurance

My Two Cents
Guest
My Two Cents

Re: “You take that money out of the system and put it in people’s bank accounts and suddenly there’s no money left over to pay for the high-risk segment of the population. It is basic math, which is why it is so alarming that Bush’s ideas may gain traction.” How about you go after all of the Medicare and Medicaid fraud out there and use the recovered money to fund an insurance pool for the high risk? And everyone else gets to keep their money in HSA’s? Better yet, TAX the non-profit hospitals and use the revenue to provide for… Read more »

Anon
Guest
Anon

Consumers ought to have choices. We can all have a debate about the risk pool and the effect that HSA’s might have on things, but you cannot argue that choices shouldn’t be there for consumers who want HSA’s. These are especially good for the self-employed or those who have really crummy benefits through a job with a smaller employer who can’t get the best deal from an insurance carrier due to not having a ton of employees. Their employees are at the mercy of that particular employer’s plan. Have a discussion about what to do about the highest risk people… Read more »

Gene Ennis
Guest

If you don’t like funding high deductible HSA plans yourself look to the HRA and choose the plan options you want. Buy the high deductible plan and use the premium savings to establish an HRA to pay the deductible. This allows the company to pick up all or most of the new high deductible expense and write it off as a business expense. Or better yet, formerly drop the group plan and establish an HRA to reimburse individual health insurance at approximately 50% less than the cost of group plans. HSAs are only more popular because this administration has pushed… Read more »

Tom Leith
Guest
Tom Leith

> why does Matt owe Theora a new keyboard? Well, this is pure speculation, but I imagine Theora sitting in front of her computer. She has a nice glass of CocaCola in her hand, ans just taken a good, full draught into her mouth, just as she’s reading Matthew’s quip about CDHP being the bastard child of a one night stand between a benefits consultant with nothing to sell and a right-wing think tank that can’t do basic math. She laughs so hard, she spewes her CocaCola out of her mouth, and most likely her nose too, all over her… Read more »

Tom Leith
Guest
Tom Leith

> why does Matt owe Theora a new keyboard? Well, this is pure speculation, but I imagine Theora sitting in fron of her computer. She has a nice glass of CocaCola in her hand, ans just taken a good, full draught into her mouth just as she’s reading Matthew’s quip about CDHP being the bastard child of a one night stand between a benefits consultant with nothing to sell and a right-wing think tank that can’t do basic math. She laughs so hard, she spwes her CocaCola out of her mouth, and most likely her nose too, all over her… Read more »

TomH
Guest
TomH

I don’t get it: why does Matt owe Theora a new keyboard?

spike
Guest
spike

Well, it divides largely bewteen young and old. But I was diagnosed with cancer last year at the ripe old age of 27, so you never know. I was glad to have health insurance, believe me. It seems like you’re trying to force health insurance into the Auto Insurance, Homeowner’s insurance, etc. box. But the key difference is that when people get speeding tickets or into car accidents it is their fault, so it is morally OK to punish them with a higher premium. Last time I checked, the medical community knows of no cause for testicular cancer (barring testicular… Read more »

Ron Greiner
Guest

Sorry Tom, you said that MO only has one year “TERM” health insurance by state law. We sell individual health insurance in MO and it is not one year “TERM” so you are spewing cosmic Debri (Nice name for LIES).
Where do you dig up these people that are clueless on insurance law Matthew, they’re pathetic.

Tom Leith
Guest
Tom Leith

Ron: Missouri. And I am saying that even those with employer-based health insurance don’t have dental insurance, properly speaking. Spike: Not “unspent money” but “premiums collected in excess of actuarial risk + average SG&A expense for the industry”. Think, think, think…. OK, I think I see what you’re getting at. You are saying the risk pools are malformed, having individuals facing very different levels of risk during the period. Your assumption is that the risk divides along the young/old axis, and that “premium cost to the young is vastly in excess of the insurance protection they receive against accidental injury… Read more »

spike
Guest
spike

Tom L, if the unspent money went into profits, then how would an insurance company pay for a person who got cancer? Or a person who developed diabetes? As you (may not) know, healthcare operates with the Pareto Principle, meaning 20% of the people generate 80% of the costs. I seriously doubt healthplans are operating on 60% profit margins, which would be the case if healthplans were putting unused premiums strictly towards profits. Don’t get me wrong. Drawing the distinction between predictable health expenses and unpredictable ones is important to do. But it seems like the conclusions you’re drawing from… Read more »

Ron Greiner
Guest

Tom Leith, it would be too easy to tell us which state you live in if you are going to be making claims like that.
In the real world the only people who have “Dental Insurance” is those with employer-based health insurance. Self employed people don’t buy that stuff.
NewsFlash: Aflac is having Georgia “Government Regulators” try and stop us from being competition to them. Goofy Duck thinks we are the Wolf.

Tom Leith
Guest
Tom Leith

Forgot something. I said: > Dentistry is mostly not insurable because it is > almost completely high frequency/low severity events. > And dental plans reflect this. I should have included the fact that different people face very different degrees of risk with respect to teeth. I have one cavity in my mouth, but my wife probably has more filling than tooth in hers. Private information about family history causes a HUGE adverse selection problem, coupled with a general unwillingness to pay a premium that reflects the whole community because of the generally low severity of dental problems. So you don’t… Read more »

Tom Leith
Guest
Tom Leith

Tom H — Social Security is a lot like a Ponzi scheme in so far as it relies on constant stream of new “investors” to pay off the early “investors”. The article has the SSA’s point of view as well. I think SS amounts to a Ponzi scheme because it has promised the great majority of participants a return greater than is possible given demographic trends without a frank, coerced transfer of wealth from the young to the old. This is not insurance, and it is not even charity. Yes, for health insurance, the relevant timeframe ought to be a… Read more »

TomH
Guest
TomH

Social Security is a ponzi scheme? Aha! As I suspected, Franklin Roosevelt is not dead, but actually living on a Caribbean island and paying for margaritas with my payroll tax dollars. In any case, the “relevant timeframe” should be a lifetime, as it is with Medicare and Social Security: young people pay in knowing that they will benefit upon reaching old age. I appreciate Tom L’s explanation of the prepaid component. While the dental care example seems a little odd – there’s actually quite a nice mix of non-utilizers and frequent-fliers, making dentistry just as insurable as other specialties like… Read more »