Tuesday, August 15, 2006
HSA-linked plan prices expected to lower
[Gary S. Mogel, "Premium cuts stifled on HSA-linked plans," Investment News, 14 August 2006.]
A recent article in Investment News reports on the disappointment of some in early price savings on HSA-linked high-deductible health insurance plans, but hints at greater savings in the near future:
"When we did our census earlier this year comparing best-selling products, premiums looked like they were about one-third less," said Larry Akey, a spokesman for America's Health Insurance Plans, in Washington. The census was of the group's 1,300 members.
Many early HSA adopters were hoping for cuts of 50% or more, according to observers, based on the fact that when there is a $1,000 to $2,000-plus deductible in insurance, the premium often is at least halved.
"If consumers expected immediate large drops in cost, those were unrealistic expectations," Mr. Akey said.
"Because insurers have only one mature year of claims experience with high-deductible plans, they're using actuaries' best guesses," said Amy Chambers, senior legal counsel for Priority Health Managed Benefits Inc., a health insurance plan in Grand Rapids.
Insurers are tentative about pricing the policies, because they are uncertain about how the higher deductibles will affect policyholders' involvement in health-care decisions and how they access benefits, she said. After insurers develop additional years of claims data, pricing should become less conservative, Ms. Chambers added.
"It's fear of the unknown," Mr. Travis said. "These policies are still very new."
There is evidence that high-deductible health plan premiums are coming down, Ms. DeWitt said.
Premiums have decreased as much as 40% after a switch from a health maintenance organization or preferred provider organization with first-dollar coverage and low co-payments, Ms. Chambers said.
"This is a young market, and early rollout of a product in any field has pricing adjustments to go through. In the individual and employer markets, the perceived high level of pricing is offset by its value as an affordable health plan," Ms. DeWitt said.
"So the pricing discussion is relevant, but it's not a barrier to adoption."
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.
Brian Moore, "Governor's new HSA option leads to savings," The Kansas City Kansan, 14 December 2005.]
A recent article in Investment News reports on the disappointment of some in early price savings on HSA-linked high-deductible health insurance plans, but hints at greater savings in the near future:
"When we did our census earlier this year comparing best-selling products, premiums looked like they were about one-third less," said Larry Akey, a spokesman for America's Health Insurance Plans, in Washington. The census was of the group's 1,300 members.
Many early HSA adopters were hoping for cuts of 50% or more, according to observers, based on the fact that when there is a $1,000 to $2,000-plus deductible in insurance, the premium often is at least halved.
"If consumers expected immediate large drops in cost, those were unrealistic expectations," Mr. Akey said.
"Because insurers have only one mature year of claims experience with high-deductible plans, they're using actuaries' best guesses," said Amy Chambers, senior legal counsel for Priority Health Managed Benefits Inc., a health insurance plan in Grand Rapids.
Insurers are tentative about pricing the policies, because they are uncertain about how the higher deductibles will affect policyholders' involvement in health-care decisions and how they access benefits, she said. After insurers develop additional years of claims data, pricing should become less conservative, Ms. Chambers added.
"It's fear of the unknown," Mr. Travis said. "These policies are still very new."
There is evidence that high-deductible health plan premiums are coming down, Ms. DeWitt said.
Premiums have decreased as much as 40% after a switch from a health maintenance organization or preferred provider organization with first-dollar coverage and low co-payments, Ms. Chambers said.
"This is a young market, and early rollout of a product in any field has pricing adjustments to go through. In the individual and employer markets, the perceived high level of pricing is offset by its value as an affordable health plan," Ms. DeWitt said.
"So the pricing discussion is relevant, but it's not a barrier to adoption."
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.
Brian Moore, "Governor's new HSA option leads to savings," The Kansas City Kansan, 14 December 2005.]
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