Health insurance winner

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As politicians and bureaucrats debate the role of government in our health-care system, and as concerns by U.S. citizens and employers about rising health-care costs and lack of control and satisfaction are raised, millions of American health-care consumers -- without big government mandates -- are taking control of their health-care dollar and bringing about changes in the health insurance marketplace.

The latest data from the leading nationwide online marketplace for health insurance, eHealthInsurance.com, reveal the success of patient empowerment when choice and price transparency are offered and when competitive markets are allowed to operate in response to consumer demand. High-deductible health insurance plans (HDHPs) eligible for health savings accounts (HSAs), are attractive because they shift authority and control of the health care dollar to the patient, eliminate the administrative burden from small claims, and reintroduce the patient as the customer -- all positive steps toward improving our health care system.

Although the entire consumer spectrum is making these value-conscious decisions when purchasing health insurance, more than 40 percent of 2005 purchasers were uninsured before buying their new plan and almost 60 percent were less than 40 years of age. The most significant growth in purchases of these plans is in the same 20-39 years old group -- the age group previous studies have shown to make up the segment in the ranks of the uninsured.

Also striking is that nearly half of the purchasers of these insurance plans in 2005 had annual incomes of less than $50,000 a year. Indeed, in 2005, a full 25 percent of HSA-eligible health insurance plan buyers earned $35,000 or less -- increasing that group by more than a third compared to just a year ago.

Sixty percent of these empowered consumers, using price comparisons and informed choices, chose plans with deductibles of $3,000 or more, a 20 percent increase over 2004. Extensive coverage of office visits, prescription drugs, emergency room visits, as well as the full array of lab and radiology services were featured in the vast majority of plans purchased, despite the higher deductible. Suffice it to say the coverage options in these plans were quite comprehensive.

Consumers pay significantly less for their high-deductible health insurance than a year ago, a trend that should not continue in that the overall trend for employer-provided health insurance has been the opposite. Competitive pricing, a result of growing consumer demand, has resulted in high-deductible health insurance plans becoming cheaper than ever: Families pay 6 percent less and individual purchasers, 17 percent less, on average, for monthly premiums than just one year ago.

In sum, the evidence continues to build for the power of the consumer in health care. During the last two years, 3 million Americans have elected high-deductible plans with HSAs, and predictions are that 12 million will make this choice in 2007.

Once consumers with purchasing power were been given access to choice and prices presented clearly, lo and behold, the price of health insurance rapidly decreased. Improved affordability of health insurance has resulted from a competitive marketplace -- just as expected big government mandates interfere with the market and interrupt the control that empowered consumers wield.

The evidence is clear: Consumers empowered with information, especially price transparency and choice, will shape the marketplace and purchase appropriately valued health insurance. And there is no reason to expect, or desire, otherwise.

Scott W. Atlas, M.D., is a senior fellow at Stanford University's Hoover Institution and a professor of radiology and chief of neuroradiology at Stanford University School of Medicine. He is the author of "Power to the Patient: Selected Health Care Issues and Policy Solutions" (Hoover Institution Press, 2005).