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Jan
23

HSAs. CDHPS, and FOOLs

This blog world is getting incestuous…
Ezra Klein posted an excellent summation of the issues inherent in HSAs on his blog about the time I was posting here on CDHPs, and the two crossed paths in the ether.
Here is an excerpt from Ezra’s commentary (for a non-insurance guy he certainly understands adverse selection) –
“Because what HSA’s really do is separate the young from the old, the well from the sick. Currently, insurance operates off of the concept of risk pooling. Since health costs tend to be unpredictable and illness isn’t thought a moral failing, we all pay a bit more than we expect to use in order to subsidize those who end up needing much more than they ever thought possible. The well subsidize the sick, the young subsidize the old, and we all accept the arrangement because one day we will be old, and one day we will be sick, and no one wants to shoulder that alone.
But HSA’s slice right through this intergenerational, redistributionist arrangement: they’re a great deal for young, healthy folks because they don’t force subsidization. Just don’t get sick. And if you’re already sick, don’t think you can hide by remaining in traditional insurance plans: when the healthy rush towards HSA’s, older plans will hold only the ill, and insurance companies will send premiums skyrocketing to recoup the difference.”
While this was happening, Matthew Holt’s The Health Care Blog was commenting on both matters; and…
all three have been picked up by the DailyKOS, with much intelligent and insightful commentary. If you think no one is paying attention, the 90 comments elicited by the dailykos post will change your mind.
Here’s an excerpt:
“HSAs are (1) a terrible idea that look like another give away to corporations and (2) a sellable idea that can easily be spun into sounding like the greatest health plan ever” (say this last word with teenage girl enthusiasm, stretching it out and heavily accenting the “ver” part of e-VER).
I try (really) to avoid histrionics on this blog, but the CDHP/HSA cure-all for the world’s sins thing makes me nuts. It reveals a superficial at best understanding of health care, the economics thereof, and the real drivers of health care cost inflation.
Can we please drive a stake in its non-existent heart and start thinking about real issues, like aging, technology, drug utilization, uninsurance…..


Joe Paduda is the principal of Health Strategy Associates

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