Managed Care Matters

In perhaps one of the least surprising stories to come out this week, Califronia HealthLine reported that "Most uninsured U.S. residents likely will not enroll in high-deductible health plans with tax-free health savings accounts… fewer than one million of the 45 million uninsured residents will enroll in such plans…"

The report, funded by the Commonwealth Fund, noted that "more than half of uninsured residents do not pay taxes because of their low incomes and would not benefit from HSAs. Sherry Glied, a professor in the Department of Health Policy and Management at the Columbia University Mailman School of Public Health, added that HSAs would save middle-income uninsured residents no more than 3% to 6% on the $2,000 annual premium of most high-deductible health plans.

"There's no money here. You're giving people peanuts," she said (Strahinich, Boston Herald, 4/20). "Very few people will gain insurance coverage because of tax preferences" for HSAs, and "in fact some people may lose coverage," Glied said, adding, "Lower-wage workers in small firms are likely to be most at risk for dropping coverage if they are only offered a plan that provides little protection for out-of-pocket costs" (Commonwealth Fund release, 4/20).

Commonwealth Fund President Karen Davis said that individuals enrolled in high-deductible health plans with HSAs "would have bought this coverage no matter what the law did," adding, "They're not being induced to buy it by the tax incentives."

So much for the vaunted benefits of tax incentives. Simply put, if people don't pay taxes because they make little money, they certainly can't afford health insurance, and very likely are not getting it from their employers either because they do not offer it or because the premium contribution is too steep.

Actually, my perspective on this is somewhat…tilted. The study helps to demolish the argument that tax breaks and the like will encourage the purchase of health insurance, removing yet another red herring in the debate over what we should do about health coverage in the US.

What does this mean for you?

More insight into why people buy, and don't buy, health insurance may provide needed insights that will help you sell more insurance, increase enrollment, or at least understand why your membership is not increasing.