WHILE THE CRITICS SLEPT:

Initial HSA offerings solidify trend toward CDH products (Steve Brown, January 30, 2004, Employee Benefit News)

With the ink barely dry on the colossus Medicare bill signed into law by President George W. Bush December 8, insurers have already begun planning, developing and rolling out new health savings account (HSA) products enabled by the legislation. Industry watchers say the HSAs are the logical evolution in the market trend toward consumer-driven health care.

"Over the last few years, we've seen a tremendous level of innovation in the product design that our members offer employers. It's extremely important, as more and more people realize what the main health care cost drivers are and how they want to better manage their health care costs," Mohit Ghose, director of public affairs for the American Association of Health Plans - Health Insurance Association of America says.

Attached to high-deductible plans (per the new law $1000 for individuals and $2000 for families), HSAs share similarities with flexible spending accounts (FSAs) and health care reimbursement accounts (HRAs). However, only HSAs are portable, may be funded by employees, employers or both on a tax-deductible basis, and allow unused funds to be carried over to the next year. Susan Relland, health policy legal counsel for the American Benefits Council says with the trend toward consumer-driven health (CDH), HSAs are the "perfect vehicle.

"A great many employers are looking at it right away. They're very interested, particularly because it's something that they can do that not only helps their retirees, but also their active employees," she says.

Relland notes that employers already offering PPOs and HMOs have been moving toward adding high-deductible plans as a new option. "I think that these new HSAs make that even easier [because] they have more flexibility than the existing HRA."

What if George W. Bush transformed health care and no one noticed...

Posted by Orrin Judd at April 2, 2004 3:58 PM