The poster child for inaccurate perceptions in the health-care industry is, perhaps, the health savings account found in consumer-directed health plans. It has now been seven years since Congress created health-care reform in the Medicare Prescription Drug, Improvement and Modernization Act in 2003 by allowing employers and individuals to adopt HSAs, but many myths still stifle its growth as a low-cost option for quality health care.
Several of the myths that exist about HSAs are built on inaccuracies or misconceptions. Here is the real scoop on this rapidly growing health insurance model:
Myth #1. HSA health plans are more expensive.
Both employers and employees saved money with HSAs, a recent UnitedHealthcare study showed. The cost per member in the HSA plan decreased 7 percent in 2006 and 9 percent in 2007. Another UnitedHealthcare study showed that plan participants had 22 percent fewer hospital admissions and 14 percent fewer emergency room visits.
Myth #2. Only a few people who open HSAs contribute funds to them.
Some have criticized the HSA on the conceptual level, postulating that employees will take the high-deductible insurance and then never make contributions to the HSA. But UnitedHealthcare data shows that a majority of individuals, including those at low-income levels, enrolled in an HSA-eligible plan through UnitedHealthcare, contributed their own funds to their accounts and carried over balances the following year. This type of usage shows that people understand how their benefits work and realize the advantages of saving early for future health-care expenses.
Employers can facilitate the opening of HSAs by employees by giving them either a one-time or a systematic contribution. In fact, UnitedHealthcare found that when employers contribute to the HSAs, the percentage of employees who actually open accounts improved to 86 percent of those eligible, from a mere 27 percent when no contribution was made. The survey found that about two-thirds of all employers provide funding to employee HSAs.
Myth #3. People with HSAs are less likely to seek preventive care.
The opposite is true. A study by UnitedHealthcare shows that 5 percent more HSA members sought preventive care than a peer group of traditional PPO members. The study found that members with an HSA receive preventive and evidence-based care at rates equivalent to, or higher than, members in non-HSA plans. It also showed that HSA members were 16 percent more likely to get cervical or prostate cancer screenings.
Myth #4. Customers in HSAs don’t pay attention to their health.
In fact, HSAs help people develop a higher awareness of the cost of care and their ability to participate in health decisions among fellow enrollees. HSA participants are more likely than traditional plan participants to research the cost of prescription drug options, hospitals and physicians. Our studies show that people in HSA plans are:
16 percent more likely to get cervical or prostate cancer screening
20 percent to 40 percent more likely to get important tests for their condition if they are heart patients
15 percent more likely to have important diabetes tests, if they have diabetes.
Myth #5: All HSAs are alike.
Not all HSA plans are alike. The key difference in HSA high-deductible plans is whether or not the health-care plan has preventive health care, such as annual checkups, pap smears and mammograms as part of the deductible. These routine exams help detect and prevent serious illness, but if they are part of the deductible, employees in the high-deductible plan have to pay for them, up to the high-deductible limit. If they are not part of the deductible, they are covered 100 percent by the health plan. This means that employees are more likely to go to the doctor for these important exams and thus more likely to remain healthy.
High-deductible plans with an HSA help people not only become more engaged in their health-care decisions but also become more active participants in managing their health-care dollars. Continuing innovation by health insurers within these types of plans will only drive more interest and savings for employers and their employees. And hopefully, these myths will become a thing of the past.