Thursday, July 20, 2006
Goodman on HSA detractors
["CostRx: HSAs: A test of time?," United Press International, 19 July 2006.]
NCPA's John Goodman answers objections about the benefits of health savings accounts from The Commonwealth Fund in this recent interview:
Q. Cost-sharing is a cornerstone of the HSA, but a Commonwealth Fund study out this month showed that tax subsidies associated with HSAs would reduce cost-sharing for those who spend the most and for those who spend their least on healthcare, yet increase cost-sharing for the majority of people who fall into the mid-range of spending. So that the roughly 8 percent who account for about 50 percent of healthcare spending would see no change or a decline in cost-sharing. How do you respond?
A. In any one year, what (the survey) describes is correct, but people who are in the middle (of healthcare spending) are not going to stay in the middle; they're on their way to becoming better or they're on their way to getting worse, they don't tend to stay right in the middle. And so, over a number of years, it turns out that there are very few people whose out-of-pocket costs really go up with a conventional (HSA) plan.
Q. The study authors also said that cost-sharing would have to be raised substantially for the high spenders, but that might make healthcare unaffordable for those who need it most. Any comment?
A. The Commonwealth Fund has never liked this idea; they've been very slow to look at it. It sounds like they've discovered something that people in the business have known for years. (With HSAs), over, say five years, hardly anybody has an increase in out-of-pocket spending. So I think they are just wrong. You have to ask, over a period of years, what is the effect of this, and studies from South Africa (show that) hardly anybody loses in the long run. The(Rand Corporation studies) also show that over time, as people go through their healthy and sick stages, that almost everybody comes out ahead.
[Matthew Hisrich, "HSAs are increasing Americans' health coverage," The Topeka Capital Journal, 26 September 2004.]
NCPA's John Goodman answers objections about the benefits of health savings accounts from The Commonwealth Fund in this recent interview:
Q. Cost-sharing is a cornerstone of the HSA, but a Commonwealth Fund study out this month showed that tax subsidies associated with HSAs would reduce cost-sharing for those who spend the most and for those who spend their least on healthcare, yet increase cost-sharing for the majority of people who fall into the mid-range of spending. So that the roughly 8 percent who account for about 50 percent of healthcare spending would see no change or a decline in cost-sharing. How do you respond?
A. In any one year, what (the survey) describes is correct, but people who are in the middle (of healthcare spending) are not going to stay in the middle; they're on their way to becoming better or they're on their way to getting worse, they don't tend to stay right in the middle. And so, over a number of years, it turns out that there are very few people whose out-of-pocket costs really go up with a conventional (HSA) plan.
Q. The study authors also said that cost-sharing would have to be raised substantially for the high spenders, but that might make healthcare unaffordable for those who need it most. Any comment?
A. The Commonwealth Fund has never liked this idea; they've been very slow to look at it. It sounds like they've discovered something that people in the business have known for years. (With HSAs), over, say five years, hardly anybody has an increase in out-of-pocket spending. So I think they are just wrong. You have to ask, over a period of years, what is the effect of this, and studies from South Africa (show that) hardly anybody loses in the long run. The(Rand Corporation studies) also show that over time, as people go through their healthy and sick stages, that almost everybody comes out ahead.
[Matthew Hisrich, "HSAs are increasing Americans' health coverage," The Topeka Capital Journal, 26 September 2004.]
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