Friday, June 30, 2006
HSAs paying off
[Thomas Kostigen, "Well-paying idea: How health-savings accounts can become a good investment," MarketWatch, 27 June 2006.]
MarketWatch reports that Health Savings Accounts are growing in popularity, and the financial industry is taking note:
More and more people are finding health-savings accounts are good for them. Enrollment in HSAs has skyrocketed since they were authorized two years ago. By 2010, the Treasury Department estimates as many as 45 million Americans will be covered by the plans.
"Instead of handing over thousands of dollars each year to a big insurance agency, why not keep most of those dollars in a savings account and use them on the services you actually need? There is no person better suited to determining the value of a medical procedure than the patient paying for the benefit," said David Marotta of Marotta Asset Management in Charlottesville, Va.
"As an HSA owner you'll likely do better than break even each year," Marotta said. "With the savings on your insurance premiums, you should be able to accumulate a sizeable nest egg. And, unlike your traditional health care plan, your HSA funds are not subject to a 'use it or lose it' policy. Anything you don't spend one year carries over to the next year. After all, it's your money. While you're on a roll, why not check out the invest options offered by your bank?"
Indeed, the investment options for HSAs are something the financial industry is picking up on -- big time. On the front page of its Web site, the Investment Company Institute makes available an information guide for HSAs. Why? Contributions to HSAs may be invested in fixed accounts, mutual funds, stocks or bonds.
If the financial industry can tap into the funnel of money that has been the terrain of insurance companies, it can breed healthy competition -- just like HSAs themselves, which may be pushing health-care costs down.
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.
William Short, "HSAs treat ills of health care payment system," The Kansas City Business Journal, 25 March 2005.]
MarketWatch reports that Health Savings Accounts are growing in popularity, and the financial industry is taking note:
More and more people are finding health-savings accounts are good for them. Enrollment in HSAs has skyrocketed since they were authorized two years ago. By 2010, the Treasury Department estimates as many as 45 million Americans will be covered by the plans.
"Instead of handing over thousands of dollars each year to a big insurance agency, why not keep most of those dollars in a savings account and use them on the services you actually need? There is no person better suited to determining the value of a medical procedure than the patient paying for the benefit," said David Marotta of Marotta Asset Management in Charlottesville, Va.
"As an HSA owner you'll likely do better than break even each year," Marotta said. "With the savings on your insurance premiums, you should be able to accumulate a sizeable nest egg. And, unlike your traditional health care plan, your HSA funds are not subject to a 'use it or lose it' policy. Anything you don't spend one year carries over to the next year. After all, it's your money. While you're on a roll, why not check out the invest options offered by your bank?"
Indeed, the investment options for HSAs are something the financial industry is picking up on -- big time. On the front page of its Web site, the Investment Company Institute makes available an information guide for HSAs. Why? Contributions to HSAs may be invested in fixed accounts, mutual funds, stocks or bonds.
If the financial industry can tap into the funnel of money that has been the terrain of insurance companies, it can breed healthy competition -- just like HSAs themselves, which may be pushing health-care costs down.
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.
William Short, "HSAs treat ills of health care payment system," The Kansas City Business Journal, 25 March 2005.]
Kansas Medicaid a financial mess
[Dave Ranney and Mike Shields, "Kansas must repay $18.5M for Medicaid misspending," The Lawrence Journal-World, 30 June 2006.]
Medicaid spending in Kansas is on a crash course as it is. Now that federal authorities are following through on their efforts to ensure states are not engaging in questionable accounting practices that over-bill the federal government, however, serious questions should arise about the program's financial stability:
Kansas has agreed to repay another $18.5 million to the U.S. government after auditors found the state misspent money from the federal Medicaid program.
That makes $32.6 million the state has agreed to pay back this year. And the refund tally could grow, given that $135 million in federal aid has been under review.
An audit report released in February examined how Kansas billed Medicaid to pay for services for children with special needs. Investigators said a sample of 300 Medicaid claims from three school districts — Wichita, Kansas City and the Central Kansas Cooperative — in 2002 turned up 217 claims that shouldn’t have been paid:
- Seventy-six claims lacked a required doctor’s order for occupation and speech-language therapy services.
- One hundred thirty-nine claims lacked evidence that services had ever been rendered.
- Two claims lacked a required doctor’s order for physical therapy.
According to the audit report to be released today, “Kansas did not have adequate internal controls to ensure that it correctly developed the payment rate” for services.
Bilking the feds out of cash was just another way to shove the growing Medicaid problem under the rug. With the federal government on to the scheme, however, the urgency of addressing fundamental flaws within the program increases dramatically.
[Michael Bond, "What Is Wrong with Medicaid in Kansas?," The Flint Hills Center, 26 December 2005.
Michael Bond, "Reforming Medicaid in Kansas: A Market-Based Approach," The Flint Hills Center, 2 February 2006.]
Thursday, June 29, 2006
Congressional panel report raises more questions than answers
[John C. Goodman, "Rationing U.S. Health?" American Conservative Union Foundation, June 26, 2006.]
It's easy enough to say that in an ideal situation everyone would have everything they wanted all of the time, but when it comes down to it there aren't many who are interested in footing the bill for such an undertaking. Even if someone wanted to, economics teaches us that there is a scarcity of resources and we must decide between competing goods. Utopian schemes end in disaster because they choose to ignore this fundamental truth.
The Citizens' Health Care Working Group, a 15-member panel created by Congress to survey the American public on what type of health care system is desired, recently released a 12-page report that is an excellent example of such a disconnect with reality. The first two sentences of a recent USA Today article on the report's release underscore the importance of recognizing the difference between stated and revealed preferences:
Affordable health care should be available to all Americans by 2012, with protection in the meantime from "very high out-of-pocket medical costs," say initial recommendations from a 15-member panel created by Congress.
The Citizens' Health Care Working Group's 12-page report, which some say may prompt debate before national elections in November and in 2008, does not specify exactly how to pay for such benefits or what they should include.
NCPA President John Goodman finds the report's recommendations disturbingly familiar:
There is not the slightest hint that anyone, anywhere will ever have to choose between health care and other goods and services. In fact, this group wants to make it a matter of law that there will be no hard choices, no difficult trade-offs, no cost-benefit analysis. (Thus, cutting through the Gordian Knot that has stumped so many other scholars.)
The document comes dangerously close to plagiarizing Aneurin Bevan and Sir William Beveridge, who said almost identical things more than 60 years ago - right before they established a system that did the exact opposite of every thing that was promised and has been rationing British health care ever since.
[Charles W. Van Way, III, MD, "The Strength of a Really Bad Idea," The Flint Hills Center, 8 May 2004.]
Wednesday, June 28, 2006
New study reveals growth in government health care spending
[Christian Hagist and Laurence J. Kotlikoff, "Health Care Spending: What the Future Will Look Like," NCPA Study No. 286, 28 June 2006.]
The National Center for Policy Analysis just released new data on the growth of government spending in the U.S., and the numbers are sobering:
European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries is the failure to control government spending. Other countries employ global budgets and control access to expensive drugs and new technology. The United States, by contrast, has very meager spending controls. If current trends continue, U.S. government health care spending will consume an ever growing portion of national income — far more so than any other developed country.
In the United States, government health care spending now totals about 6.6 percent of GDP. But if it continues to let benefits grow for the next five decades at past rates, it will end up spending 32.7 percent of its GDP on health care.
No country can spend an ever-rising share of its output on health care, indefinitely. There is a limit to how much a government can extract from the young to accommodate the old. When that limit is reached, governments go broke. Of the 10 countries considered here, the United States appears most likely to hit this limit.
[Stephen Moses, "It's time to end welfare for the well-to-do," The Kansas City Kansan, 26 April 2006.
Matthew Hisrich, "Medicaid Could Swamp State Budget," The Wichita Eagle, 26 July 2005.]
The National Center for Policy Analysis just released new data on the growth of government spending in the U.S., and the numbers are sobering:
European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries is the failure to control government spending. Other countries employ global budgets and control access to expensive drugs and new technology. The United States, by contrast, has very meager spending controls. If current trends continue, U.S. government health care spending will consume an ever growing portion of national income — far more so than any other developed country.
In the United States, government health care spending now totals about 6.6 percent of GDP. But if it continues to let benefits grow for the next five decades at past rates, it will end up spending 32.7 percent of its GDP on health care.
No country can spend an ever-rising share of its output on health care, indefinitely. There is a limit to how much a government can extract from the young to accommodate the old. When that limit is reached, governments go broke. Of the 10 countries considered here, the United States appears most likely to hit this limit.
[Stephen Moses, "It's time to end welfare for the well-to-do," The Kansas City Kansan, 26 April 2006.
Matthew Hisrich, "Medicaid Could Swamp State Budget," The Wichita Eagle, 26 July 2005.]
Tuesday, June 27, 2006
NCPA President argues for portable insurance
[John Goodman, "Portable, Personal Health Insurance Solves Many Consumer Problems." Health Care News, The Heartland Institute, June 2006.]
The logic of tying health insurance to an employer was questionable even in a model where families rely on one income-earner who stays with the same company for a lifetime. As Americans move away from this and toward greater mobility - both in terms of geography and employment - it is all the more vital that individuals have coverage that travels with them:
One of the peculiarities of the U.S. health care system is that most of us have insurance plans we didn't choose: Our employers selected them. Even if we like our health plan, we could easily lose coverage when we lose or change jobs, or because of a decision by our employer.
In his State of the Union address in January, President George W. Bush proposed making health insurance individually owned, personal, and portable, enabling it to travel with employees from job to job. It is an idea whose time has come.
Portable health insurance promises a continuing relationship with an insurer and, therefore, a continuing relationship with doctors and health facilities. It also promises that if people like their health plans, they will be able to stay in them without worrying about an employer's decision or a job change.
For employers, portable health insurance means small groups are no longer treated as self-contained pools and rated each year based on changes in their employees' health status. Instead, employees become members of very large pools in which no one can be singled out because of a sudden, large medical expense, and premium increases are the same for all.
[Devon Herrick, "Health Insurance is Better to Own than Rent," The Dodge City Daily Globe, 23 March 2005.
Greg Scandlen, "Choice is Revolutionizing Health Care," The Wichita Eagle, 28 September 2004.]
The logic of tying health insurance to an employer was questionable even in a model where families rely on one income-earner who stays with the same company for a lifetime. As Americans move away from this and toward greater mobility - both in terms of geography and employment - it is all the more vital that individuals have coverage that travels with them:
One of the peculiarities of the U.S. health care system is that most of us have insurance plans we didn't choose: Our employers selected them. Even if we like our health plan, we could easily lose coverage when we lose or change jobs, or because of a decision by our employer.
In his State of the Union address in January, President George W. Bush proposed making health insurance individually owned, personal, and portable, enabling it to travel with employees from job to job. It is an idea whose time has come.
Portable health insurance promises a continuing relationship with an insurer and, therefore, a continuing relationship with doctors and health facilities. It also promises that if people like their health plans, they will be able to stay in them without worrying about an employer's decision or a job change.
For employers, portable health insurance means small groups are no longer treated as self-contained pools and rated each year based on changes in their employees' health status. Instead, employees become members of very large pools in which no one can be singled out because of a sudden, large medical expense, and premium increases are the same for all.
[Devon Herrick, "Health Insurance is Better to Own than Rent," The Dodge City Daily Globe, 23 March 2005.
Greg Scandlen, "Choice is Revolutionizing Health Care," The Wichita Eagle, 28 September 2004.]
