|Understanding high-deductible health plans
As banks and brokers catch on to the investing potential
of HSAs, more are offering accounts with a variety of stock and
bond investing options.
Many experts, however, agree that it is unwise for
consumers to invest money in the stock market that they may need
in the next five years. If invest your HSA money in a stock mutual
fund, you could find that you need the money to pay for an expensive
medical test and have to take the money out when the fund isn't
doing well. Such investments also carry fees, which directly cut
into the returns consumers earn.
Consumers who need regular, ongoing care for chronic
conditions such as diabetes might have more trouble than the average
consumer, in terms of paying for their care through HSA savings,
"In consumer-directed health care there is no real provision for people with chronic conditions who need regular treatment and medication," she says. "In our survey we found reasons to be concerned that these people are less likely to get needed care because of the cost and will either not fill prescriptions or skip doses. Then they will end up with more serious medical problems down the road."
Tools to navigate the system
In order to make the best use of a high-deductible health insurance
plan and an HSA, consumers need access to tools that help them select
health care providers, figure out a reasonable cost for different
types of care and deal with the medical claims process. Many of
the larger health insurance companies include a component that helps
consumers determine the cost of common medical procedures and drugs.
However, if your employer offers a bare-bones policy
or you are self-employed, you're on your own. In that case, you'll
have to navigate the system yourself or spend money on the many
Web sites and services that various companies are rolling out to
take advantage of this trend in health care. These offer tools and
help in deciphering your plan's benefits for a yearly fee, typically
a couple hundred dollars.
Herrick contends that there is a good deal of information
available on the Internet and on drugstore shelves to help cost-conscious
consumers make better and cheaper health care choices, including
information on generic alternatives to branded drugs; home testing
kits for strep throat and other infections and e-mail interaction
with doctors rather than more expensive office visits.
Collins disagrees, saying that the information available
isn't that easy for busy consumers to access. "There is very
little price and quality information out there, which means consumers
have to make decisions with very little information."
And many consumers have little experience in navigating
the ins and outs of insurance-policy claims and aren't savvy in
terms of appealing claim denials and even understanding their policies
and knowing their rights.
The bottom line
Whether consumer-directed health care actually saves money in the
long run and catches on with companies and consumers is still open
to debate. A study by the Deloitte Center for Health Solutions found
that consumer-driven health care costs rose 2.8 percent in 2005,
versus 6.4 percent to 8.5 percent increases for other more traditional
health insurance plans.
Collins believes that consumer-driven health care
imposes more inefficiency on an already inefficient health care
"There are a lot of administrative burdens on
consumers and companies with HSAs and all their regulations and
the other issues that employers have to explain and employees have
to understand," she says. "There are lots of other ways
to improve health care transparency and quality and save money that
are more efficient."