The John Locke Foundation is touring the state to inform people about Consumer-Driven Healthcare. The first stop was in Asheville today.
At the Biltmore West Holiday Inn, JLF policy analyst Joe Coletti told about Health Savings Accounts (HSA’s). He said any healthcare reform should improve personal health and keep costs down. Proposals set forth by the Obama administration propose to accomplish this with means that have historically led to higher costs and less accessible services. The goals would be better accomplished through a market-driven system where patients and doctors negotiate treatments, than with a “1000-page bill that sets up a commission with commissioners to be named later and swaps and trades . . . .” Coletti was referring to the bill that passed Congress. Though Coletti’s expertise on healthcare reform is sought on a national level, he has not been able to obtain a hard copy of anything the Senate is considering.
Coletti likes HSA’s because they motivate people to shop around for healthcare. The downside is that a lot of doctors don’t know what to do when a patient presents them with a personal check. Becki Gray said the John Locke Foundation offers employees the option of traditional insurance or HSA’s. Coletti and Gray both have HSA’s.
Beth Donner, president of Diversified Planning, Ltd., a healthcare consulting firm, described how HSA’s work. Individuals, often with the help of employers, set aside money in an account for healthcare. Contributions to the fund and interest accrued are not taxed. Expenditures from the account on IRS-qualified medical expenses are not taxed, either. HSA’s work like savings accounts for healthcare in that they are not zeroed-out at the end of the fiscal year, and they are portable. Holders of HSA’s are required by the government to also have a high-deductible health plan (HDHP). The IRS publishes annually limits to how much people can put in these accounts.
Donner said owners of HSA’s often don’t spend more than $1000 a year, and they can build a huge savings account under these plans. This was countered by Sharon Robbins of Insurance Services of Asheville, who considered Donner’s numbers overly optimistic, but admitted HSA’s work better when people know how to use them.
Jeff Soladay, director of small business sales for UnitedHealthcare, Charlotte, spoke about Health Reimbursement Arrangements (HRA’s). With HRA’s, employers pay employee medical bills, for qualified expenditures up to a predetermined limit, as they occur. Soladay said HRA’s realize greater savings for employers than traditional healthcare plans. They also provide an incentive for employers to engage employees in wellness programs. HSA’s also encourage personal responsibility because individuals know they will be stuck with the bill for having made unhealthy lifestyle choices. Small upfront investments in preventive practices become more appealing.
Tour dates continue to be added. The JLF crew will host another luncheon Thursday at the Mariott Charlotte SouthPark. At each location, people with local experience with HSA’s and HRA’s will relate their experiences.
