Monday, June 27, 2005
Kansas is ready for broader implementation of HSAs
[Victoria Craig Bunce and Merrill Matthews, "What’s Next for HSAs?," Issues & Answers, The Council for Affordable Health Insurance, June 2005.]
HSAs are spreading like wildfire in the private sector, but there are plenty of opportunities for the public sector, as well:
State and local governments are employers, too. Since they offer health insurance coverage to their employees — and many are seeing premium increases in the double digits — they should consider consumer driven health care models which have a proven track record for stabilizing health care costs.
The problem with the Medicaid program as it is currently structured is that people have little incentive to be prudent shoppers of medical services. A Medicaid HSA plan for the under-age-65 population would change those incentives. The state could continue to be the insurer, but increase the deductible, depositing part or all of the savings in the Medicaid beneficiary’s HSA. Better yet, the state could simply provide a defined contribution to a private sector insurer or third-party administrator selling HSA plans.
Would this approach be a radical departure from traditional Medicaid? Yes, but Medicaid needs radical change. Iowa passed into law a Medicaid HSA, H.B. 841, on May 12, 2005. And Florida’s new Medicaid reform has an innovative HSA plan.
If the states don’t want to be left behind, they need to look for ways to make HSAs available to public sector populations.
[Devon M. Herrick, "Give Medicaid recipients more control," The Wichita Eagle, 3 March 2005.
Devon Herrick, "HSAs for state and local employees," The Pittsburg Morning-Sun, 1 May 2005.]
[Victoria Craig Bunce and Merrill Matthews, "What’s Next for HSAs?," Issues & Answers, The Council for Affordable Health Insurance, June 2005.]
HSAs are spreading like wildfire in the private sector, but there are plenty of opportunities for the public sector, as well:
State and local governments are employers, too. Since they offer health insurance coverage to their employees — and many are seeing premium increases in the double digits — they should consider consumer driven health care models which have a proven track record for stabilizing health care costs.
The problem with the Medicaid program as it is currently structured is that people have little incentive to be prudent shoppers of medical services. A Medicaid HSA plan for the under-age-65 population would change those incentives. The state could continue to be the insurer, but increase the deductible, depositing part or all of the savings in the Medicaid beneficiary’s HSA. Better yet, the state could simply provide a defined contribution to a private sector insurer or third-party administrator selling HSA plans.
Would this approach be a radical departure from traditional Medicaid? Yes, but Medicaid needs radical change. Iowa passed into law a Medicaid HSA, H.B. 841, on May 12, 2005. And Florida’s new Medicaid reform has an innovative HSA plan.
If the states don’t want to be left behind, they need to look for ways to make HSAs available to public sector populations.
[Devon M. Herrick, "Give Medicaid recipients more control," The Wichita Eagle, 3 March 2005.
Devon Herrick, "HSAs for state and local employees," The Pittsburg Morning-Sun, 1 May 2005.]
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