Two recent federal reports on health insurance highlight the need for policyholders to get a firmer grip on their health care in order to lower costs and, ultimately, enable more people to get coverage.
The U.S. Census Bureau this week released its report on the number of uninsured Americans that showed 47 million people are now without medical insurance, up from 44 million in 2005.
Earlier this month, the U.S. Bureau of Labor Statistics (BLS) released the National Compensation Survey of Employee Benefits in Private Industry that showed workers have access to health benefits through their employers but are not signing up.
“The problem is the cost, but it is not the root problem,” said David Merritt, a health policy analyst at the Center for Health Transformation in Washington. “People need to change their behavior through more consumerism in the marketplace.”
What is consumerism? The concept in health care is based on the idea that individuals should have greater control over decisions affecting their health care.
Products and plans that are able to advance the consumerism trend include health savings accounts (HSAs) and health reimbursement arrangements, which are savings vehicles paired with high-deductible health plans.
The number of employers offering high-deductible health plans is increasing at a slow pace, largely because they were established only three years ago and because Democrats around the country do not view them as a viable solution to the health care crisis.
It is true that high-deductible plans come with risks, but the disturbing trend of more uninsured Americans each year means it’s time to expand the pool of potential enrollees in such plans. The BLS report found that HSAs were offered to 8 percent of the work force but are limited to management, professional and office-type occupations.
The number of uninsured people is increasing because the employer-sponsored health care system is eroding. The problem with the employer-sponsored health care system is twofold.
On the one hand, small employers cannot afford to pay for the rising cost of health insurance, so they simply don’t offer it — 60 percent of nation’s employers offered health insurance as of March. Secondly, for the fortunate workers who are offered health insurance, about 50 percent aren’t taking it, presumably because it’s too expensive.
According to the Kaiser Family Foundation, health care premiums paid by workers are increasing at twice the rate of wages. Last year, wages increased by 3.1 percent and premiums at 7.7 percent, and this year’s numbers are likely to be very similar, according to health care consultants.
The advantage of a high-deductible health plan is monthly premiums are lower in these plans and, once the deductible is met, they pay benefits just like traditional health plans.
Therefore, employers immediately save money through lower premiums and, hopefully, in the long run, because out-of-pocket costs are higher, workers are more careful with their health care choices and eventually lead healthier lifestyles.
For the employee, saving money on a tax-free basis is a great investment. If the HSA is started at a young age, an individual can have an ample sum of money to pay for a health crisis rather than crippling employers.
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