The Detroit Free Press notes that HDHPs are even showing up in the automakers. They’re of course following the lead of a few high tech companies.
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Well, sure, Matthew. They don’t call it a cost-shift for nothing. But something tells me labor leaders already have that figured out (though I could be wrong; they’re not always the sharpest tools in the shed).
I was thinking more in terms of whether HDHPs will be the down-and-dirty issue that leads to walkouts at the auto factories next spring (which is why I’m buying my new car now). Or will we have a big dustup like we did last summer about the retiree health benefits that, when it all shakes out, turns out to be a whole lotta nothing. Auto plant retirees went from paying zero for their healthcare to about $700 a year. That’s only a big deal in Michigan, where a two-tiered $5/$10 drug copay is still commonplace. Those of us in the other 49 states are left wondering what all the fuss was about.
I’m thinking we’ll be saying the same thing after new collective bargaining contracts are signed with GM, Ford and DCX next summer. I’ll have to get back with you on whether HDHPs will be part of the new hourly worker’s package, but right now, I’m leaning towards no.
If you are a self-insured employer and you move your people to HDHPs and you do not give them cash for their HSAs, YOU WILL SAVE MONEY. It’s that freaking simple!!
I don’t work for the big three, but we do have a high deductible health insurance plan because we have our own business. Overall, I have found it saves us a lot of money. I have a 10-month old son, and even if I have to take him to the doctor 3 times in a month and pay the entire amount for the visit ($65) I still end up spending less than if we had bought insurance that covered everything. I have found that most doctors have been willing to work with me to help manage our costs. And, if you consider that we get to deduct our medical expenses at the end of the year, I think we end up saving even more money.
The biggest drawback that I see to HSA health plans is that because I am of child bearing age and plan to have more children, I would be looking at significant expenses for a year with all of the doctors visits and the hospital stay for myself and the new baby.
btw…my husband does business with Tom Rogala from Custom Benefit Solutions. His website is http://www.HSASale.com
The automakers also self-insure, primarily. I’m not sure what effect that will have should HDHP/HSAs be required for the unionized work force.
A death spiral at GM, were one to occur, would be caused primarily by a continuing loss of market share which would make it difficult or impossible to generate sufficient revenue to cover its costs. While it has been cutting costs and downsizing its infrastructure to more properly reflect its lower (than historical) market share, you cannot cost cut your way to prosperity. While the high healthcare costs are certainly not helpful, they are far from the only cause of GM’s current financial problems.
There would only be a “death-spiral” if GM required each of its various insurance plans to be financially independent, which I assume it does not do. Even if the bad risk goes to the richer benefit plans and the good risk goes to the HRA/HSA, there need be no net loss for GM because GM is its own insurer. It started with everyone being in a rich benefit plan, so depending on how much it funds the HSA/HRA accounts, it may even come out ahead in terms of total payments regardless of risk skewing. I am assuming here that the total pool (# of GM employees) is not affected by this change in health plan options.
Unless the ability to offer high deductible health plans to the unionized work force is part of the recent agreement under which current unionized workers and retirees will contribute more to the cost of their health insurance, it is a virtual certainty that these plans are only being offered to non-union personnel. Historically, changes related to health benefits for unionized workers can only occur as part of the collective bargaining agreement, and the UAW contract does not expire until next year. Of course, if GM appears to be at death’s door before that and bankruptcy appears to be an imminent possibility, additional concessions could be negotiated sooner, but I believe that is the scenario it would take for that to happen.
I’m a bit disappointed with Katie Merx’s story in the Freep. She’s my favorite writer in the mainstream press when it comes to health insurance, but she leaves unasked (and therefore unanswered) a really important question. What percentage of those employees of the automakers who have signed up for HDHP/HSAs are with unionized labor? Unless I’m really clueless, I’d say the answer is about zero. Those car company employees with HDHP/HSAs are almost assuredly all salaried/management. That would only reinforce Matthew’s point made in Spot On, which is that the low-wage or less-healthy, whether they be waiters or line workers, will find little reason to sign up for such a plan, while the more-healthy/well-heeled will snatch them up for the tax shelter. The “death spiral” will come to the auto industry in 2007 when the UAW negotiates its new contracts with the Big Three, and the automakers demand that HDHP/HSAs be part of the deal.