September 9, 2019

COME BACK W!:

The U.S. can slash health-care costs 75% with 2 fundamental changes -- and without 'Medicare for All' (SEAN MASAKI FLYNN, 9/02/19, MarketWatch)

[D]eductible security--pairs an insurance policy that has an annual deductible with a health savings account (HSA) that the policy's sponsor funds each year with an amount equal to the annual deductible.

The policy's sponsor can be either a private employer like Whole Foods (now part of Amazon. AMZN, +0.09% ), which has been doing this since 2002, or a government entity like the state of Indiana, which has been offering deductible security to its employees since 2007.

While Indiana offers its workers a variety of health-care plans, the vast majority opt for the deductible security plan, under which the state covers the premium and then gifts $2,850 into each employee's HSA every year.

Since that amount is equal to the annual deductible, participants have money to pay for out-of-pocket expenses. But the annual gifts do more than ensure that participants are financially secure; they give people skin in the game. Participants spend prudently because they know that any unspent HSA balances are theirs to keep. The result? Massively lower health-care spending without any decrement to health outcomes.

We know this because Indiana Gov. Mitch Daniels ordered a study that tracked health-care spending and outcomes for state employees during the 2007-to-2009 period when deductible security was first offered. Employees choosing this plan were, for example, 67% less likely to go to high-cost emergency rooms (rather than low-cost urgent care centers.) They also spent $18 less per prescription because they were vastly more likely to opt for generic equivalents rather than brand-name medicines.

Those behavioral changes resulted in 35% lower health-care spending than when the same employees were enrolled in traditional health insurance. Even better, the study found that employees enrolled in the deductible security plan were going in for mammograms, annual check ups, and other forms or preventive medicine at the same rate as when they were enrolled in traditional insurance. Thus, these cost savings are real and not due to people delaying necessary care in order to hoard their HSA balances.

The universality and wealth transfer would make this National Health variant acceptable to Democrats too.



Posted by at September 9, 2019 6:44 PM

  

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