WASHINGTON — Although health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of policy makers, employers and employees have been reticent about embracing them.
As of June 2007, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan, with 4.5 million new enrollees in 2007 alone, according to data from Forrester Research Inc., an independent technology and market research company. But consumer awareness of these options remains very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.
That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at a health care congress sponsored by the Wall Street Journal and CNBC. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly after major employers were convinced that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.
Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking.”
With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.
Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills.
She said that people are more inclined to ignore a doctor's bills than a hospital's, because hospitals pursue their payments more aggressively and can hurt peoples' credit ratings, something they think doctors don't do.
Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out. A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.