Tuesday, April 12, 2005
Devon Herrick on HSAs
[Meena Thiruvengadam, "Employers probe health care options," The San Antonio Express-News, 11 April 2005.]
NCPA's Devon Herrick, who authored the recent Flint Hills Center policy brief on health savings accounts, counters concerns over how the accounts will be utlized with personal experience in this article:
Consumer-driven plans have high deductibles — often between $1,000 and $5,000 for an individual or up to $10,000 for a family. They push employees to be economical in their medical decision-making, weighing the full cost of the service against their need for it.
Employers generally will deposit money into accounts employees can use to pay their medical bills in full. Once that fund is depleted, employees must pay out-of-pocket for services until their deductibles are met, at which time the plans will cover all expenses.
"The whole idea is they give us the money and we decide what we want," said Devon Herrick, a health economist with the National Center for Policy Analysis, a Dallas-based nonprofit think tank. "It gives patients incentives to be wise consumers — to decide what they really need, not just what they think they want."
With 85 percent of medical costs being paid by third parties under traditional health plans, Herrick said patients rarely have a reason not to be wasteful with their health benefits. "We buy a lot more because we're not paying the bill," he said. "We have an incentive to consume more than we would otherwise."
Critics worry consumer-driven plans — because they significantly increase patient payments for services — may keep employees from seeking the medical care they need. There also is concern employees won't make better medical decisions.
Herrick, who was insured by a consumer-driven health plan for about three years, believes the worries are unfounded. "I took care of my health needs. But because I knew that money was mine, I didn't waste doctors' visits, and I used over-the-counter medicine when I could," he said. "I made it a point not to waste healthcare."
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
[Meena Thiruvengadam, "Employers probe health care options," The San Antonio Express-News, 11 April 2005.]
NCPA's Devon Herrick, who authored the recent Flint Hills Center policy brief on health savings accounts, counters concerns over how the accounts will be utlized with personal experience in this article:
Consumer-driven plans have high deductibles — often between $1,000 and $5,000 for an individual or up to $10,000 for a family. They push employees to be economical in their medical decision-making, weighing the full cost of the service against their need for it.
Employers generally will deposit money into accounts employees can use to pay their medical bills in full. Once that fund is depleted, employees must pay out-of-pocket for services until their deductibles are met, at which time the plans will cover all expenses.
"The whole idea is they give us the money and we decide what we want," said Devon Herrick, a health economist with the National Center for Policy Analysis, a Dallas-based nonprofit think tank. "It gives patients incentives to be wise consumers — to decide what they really need, not just what they think they want."
With 85 percent of medical costs being paid by third parties under traditional health plans, Herrick said patients rarely have a reason not to be wasteful with their health benefits. "We buy a lot more because we're not paying the bill," he said. "We have an incentive to consume more than we would otherwise."
Critics worry consumer-driven plans — because they significantly increase patient payments for services — may keep employees from seeking the medical care they need. There also is concern employees won't make better medical decisions.
Herrick, who was insured by a consumer-driven health plan for about three years, believes the worries are unfounded. "I took care of my health needs. But because I knew that money was mine, I didn't waste doctors' visits, and I used over-the-counter medicine when I could," he said. "I made it a point not to waste healthcare."
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
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