POLICY/POLITICS/HEALTH PLANS: HSAs for Medicare? Crazy but apparently true

So the HSA ideology has wormed its way into CMS, and now Medicare is seeking proposals for its Consumer-Directed Health Plan demonstration. Those taxpayers who can do basic math might wonder why you’d want to to give healthy Medicare beneficiaries cash for health services that they’re not going to use, while taking that cash away from the pot that pays for the sick beneficiaries that do use said services. But we’ve asked that question so many times before and no-one on the free market side dare answer it. And I guess you might say, why not give the taxpayers money straight to the “healthys” instead of laundering it through Medicare Advantage plans as we’re doing it now so that they can hand out free gym memberships to seniors and boost their executives’ stock holdings.

But given that risk adjustment is coming to Medicare Advantage, it may be that that gravy train is ending. Perhaps we’ll get to see if the private plans really can stand on their care management merits—and there’s so much fat in Medicare that they ought to be able to, easily.  Although they failed to do so in the late 1990s.

However, it’s just bizarre to increase the costs of a tax payer funded universal risk pool by allowing people who are not paying into it to withdraw cash from it. So the only real explanation is that CMS and its political masters in the White House are eventually intending to put the entire system into a high-deductible plan and not fund the amount below the deductible.  Just the same as most employers are doing (as I explained in this Spot-on piece about Intel).  That of course makes perfect sense for the government and the taxpayer. Until, that is, the seniors find out! I wouldn’t want to be in charge of Medicare when that happens, remember what those seniors did to Rostenkowski!

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6 replies »

  1. Having had the misfortune of having had an HSA account by a previous employer, I would have to recommend against using them for anyone under any cirmcumstance. My experience was that the only people who make out with the HSA’s are the fund manager’s. We had JP Morgan Chase Bank, and they just ripped us off at every opportunity, and they did it completely “legally”. The entire concept of HSA’s is just a scam in itself!

  2. William. Stick aruond. You’ll find plenty of criticism of the lilly gilding around the rest of the system, and–believe it or not–support for the concept of dctors leading the future of the health care system.
    But no one–least of all most doctors–seriously believes that the AMA, with its century long track record of opposing universal health insurance and spiking attempts to create it, is serious about it now. If you want to believe that, how about you tell me what happened to the AMA’s support for the Clinton plan in 1993-4? Case closed.

  3. Your Sept 13th piece on the AMA “Pushing Patients Around” is way off the mark. Obviously you have taken a few correct facts and mixed them in with MANY INCORRECT IDEAS to present only your point of view,rather than the facts,& without understanding true AMA policy, to paint a piece of abstrct art of your own feelings.
    The AMA supports Universal Health Coverage especially through Individually Selected & Owned Health Insurance, supported by Tax Credits. (these could be advanceable in case of the poor). This would allow more individual responsibility in choosing ones own health insurance and attention to the price and necessity in consuming health resources.This would give Patients freedom of choice which they often do not have now!If the FEHBP (Federal Employees Health benefit Program)which is a model like this, is good for Congress, why not for our entire society. The AMA completely endorses HSA’s as well as lobbied for them.
    Now as far as the Medicare fee reductions which are governed by the SGR (Sustainable Growth Rate) formula. This is calling for ~40% decrease in fees (including the 5.4% 2007 decrease) over the next 7 years while inflation would increase ~20%, effectively causing a 60% loss in doing “business” What enterprise could sustain this loss and stay in business??? If you took a salary decrease of 40% over 7 years, with a 20% increase in inflation, would you stay in the same job or business?? I would assume not!!!
    Why didn’t you mention that while Physicians fees are being decreased, Hospitals, Nursing homes and Home Care Services are seeing INCREASES of ~3-5% and they consume a far greater percentage of health care dollars then Physican fee’s. You also failed to point out that while the Feds are controlling Physician fees they are NOT controlling Pharmaceutical costs under Part D of Medicare. (Pharmaceutical costs have been growing at a 20% rate).In addition you failed to point out that Medicare Advantage plans (a euphemisism of HMO’s) received a 12% INCREASE last year, and their total Healthcare costs are 12-13% HIGHER than the traditional Medicare Plan, and I can assure you the Doctors are not seeing their fees increased in those plans. But the CEO of United Healthcare gets more than a $$$BILLION dollars this year.
    I would suggest that in the future you point out ALL the facts…..thanks

  4. Gone are the days of the successful Nigerian Scammers. we now need to be wary of the CMSS and the health insurance industry. Every day we see more new scams. Matthew is on the dot as is Peter.
    As providers we are fed up. To some extent we doctors are to blame for this stupid mess. The most recent entrants to the “scammers Hall of Fame” are PBMs( Pharmacy benefit managers) who change our prescription but do not want to take responisbility for practicing medicine without licence. The amount of paperwork they generate and the wasteful telephone and fax time is unreal. I recently called a few and told them I will not deal with them on their terms. The other successful scam is the “Medicare Part D” that does not cover half the prescriptions and almost all of the expensive medications a patient may need. The purposeless activity these plans wreak in our offices is an unfunded mandate on medical practitioners and pharmacists. The most recent entrant to the “scammers Hall of fame” is the Pharmaceutical industy’s “Commitment ot care for patients programs”. All of us are wasting time and no one is happy, not even the patient we are trying to help! High deductible health isnurance for the poorest of people is the unkindest cut of all. Enticing them with money to sign up for these plans is a formula for disaster( it is actually analogous to the drug peddlers who offer teenagers free cocaine to get them hooked!) Someone needs to educate the politicians that healthcare is not amenable to competitive bidding. When things go wrong, s it invariably will with aging, it may be a life and death issue for an elderly patient. If they hesitate to go to the hospital when they are sick, the government will end up picking a lot of cost for extended care, expensive ICU care, complex surgeries for problems that could hae been prevented. Physicians as a group are so laid back when it comes to understanding the medical economics. No insurance company that dishes out High deductible health insurance will want to take care of the chronically ill elderly. Their care will eventually fall on the tax-payer funded medical services ( also called “NHS” in UK!). Wake up docs!

  5. “The most likely end game of this is the collapse of our traditional insurance system, with eventually a government-backed universal payment system taking its place. But between here and there is lots of torment, as Intel – and all of us – make rational individual decisions which add up to what is sure to be a collective disaster.”
    Does the insurance/provider industry recognize this and are just making sure they can pull out as much money now as they can while the gettins good? I read an article that forecasted that at least 50% of baby boomers retirement income will go to healthcare. So you think that retirement resort and life style is achievable with your present retirement plan? There’s a pot of money there, and somebody wants it.

  6. > CMS and its political masters in the White House are
    > eventually intending to put the entire system into a
    > high-deductible plan and not fund the amount below the
    > deductible.
    Maybe you are on to something: back-door means-testing in Medicare. I am not against it.
    Risk-Adjusted Medicare Advantage + High(er) dedectible Medicare + Universal Eligibility + X + Y + Z ~= The Enthoven Plan
    Can we solve for X, Y, & Z, thereby averting Grave Evil and rescuing the political masters from a legacy of ignomy?