UnitedHealth: Its HSA Enrollment Exceeds its HRA Enrollment

It has been predicted for some time, that HSA (Health Savings Account) enrollment would surpass HRA (Health Reimbursement Arrangement) enrollment, and according to UnitedHealth, among their clients, HSA enrollment is now at 1.38 million, larger than the 1.34 HRA enrollment.

This comparison includes all types of customers, employer, individuals and families. The total number of covered lives who converted to these types of plans, from December 2007 to March 2008, was 325,000.

By the Numbers: Save 45% to 55% Off Traditional Health Insurance with an HSA

There is a common perception about Health Savings Accounts, and it goes something like this: health insurance costs are already so high, how can I pay for my health insurance and put $3,000 in a health savings account on top of the expensive premium?

The source of the $3,000 comes out of the cost of the traditional health insurance premium, so instead of giving money to an insurance company in the form of high monthly premiums, you are cutting your insurance bill, and putting some of the savings in a tax-free account to spend to meet you deductible.

According to Steve Davis, Editor of Inside Consumer-Directed Care, in an article titled, Banks Could Give Insurers a Run for their HSA Money by Selling Health Insurance, Golden Rule Insurance HSA Qualified Health Plans are 45% to 55% less than traditional, high premium, low deductible plans.

“UnitedHealth Group, the nation’s largest seller of HSA-qualified plans, says its plans (sold through its Golden Rule subsidiary) typically cost 45% to 55% less than its more traditional coverage options, according to spokesperson Ian Stanton. As of Jan. 1, more than 1.3 million lives were covered by one of United’s HSA-based plans.”

Those savings off a traditional health insurance plan, if put into an HSA could help baby boomers prepare for their health care costs in their retirement.

Pandora’s Box of Hospital Prices and Treating the Uninsured Fairly

The Philadelphia Inquirer has done a great service by its recent article, “The cost of hospital care is difficult to pin down,” if for no other reason than highlighting the absolute absurdity of the pricing world hospitals live in — they will not tell you a price, and when you get the bill, it is not understandable.

Furthermore, hospitals regularly price gouge the uninsured — this is not news to most — but it does show the complete lack of motivation on the part of the hospitals to reform themselves.

Why should hospitals reform themselves and their pricing? Who is going to make them? Congress, where hospitals are often the largest employer in the Representative’s district?

Two hospital specialties, bankrupting the uninsured and health care inflation, are the same things that are charging the health care political debate.

Here part of the Philadelphia Inquirer story:

“The quest for information

“Should you attempt to do this experiment on your own, as an Inquirer reporter did with eight hospitals in the region, prepare to hear a lot of canned music and automated voices. And prepare to enter a world so Byzantine that a top Medicare administrator pronounced it impossible for a “human being of average intelligence and limited patience” to understand. The reporter, who is, at least, patient, persisted and will spare you the most painful parts of the odyssey.

“When asked anonymously for their prices for either a colonoscopy or an uncomplicated vaginal birth, half the hospitals did what Reinhardt would have expected: nothing. Two – Hahnemann University and Cooper University hospitals – did not return phone messages. After several transfers, Albert Einstein Medical Center eventually sent two separate calls to a voice-mail account that was not working. Abington Memorial Hospital refused to discuss the price of a birth without detailed financial information about the caller’s income, a move an official later said was meant to avoid scaring poor, uninsured people away. [Bold added.]

“But it was the four hospitals that did provide prices – Pennsylvania, Bryn Mawr, Temple University and Virtua West Jersey – that really opened Pandora’s box. Their answers shed the most light on how absurdly complicated unearthing cost figures is and how challenging it will be to bring true price competition to health care. They also raise questions about how to treat the uninsured fairly.

“The quoted prices for a colonoscopy ranged from $900 to $8,000. Pennsylvania, the only hospital that would price a delivery for the anonymous caller, said it would cost $8,500.

“Most callers would not know this, but hospitals typically get less than $600 for a colonoscopy and about $1,300 for a delivery for Medicare patients. Private insurers usually pay a little more than Medicare.

“It turns out that, with the exception of Temple, the prices given by the hospitals’ billing employees – who were quite helpful and courteous – were what hospitals call “charges.” These are nothing like what the grocery store charges you for milk. They are more like the sticker price on a car – if it was two, three or even four times what anyone was actually expected to pay.

“In addition, the hospitals could only talk about their bills. So, they pointed out, there might also be bills from a variety of doctors. One – Virtua – it might offer discounts.”

Here is truth about hospital prices for the uninsured: the hospitals are making so much money off of their own system of confusion, obfuscation, price gouging and deception (no one knows what a reasonable price for any medical service is, nor can you read their bills) the hospitals do not want to reform themselves, nor are they capable of doing it, nor does Congress have the courage or even knowledge to do anything about it.

There are some really simple things Congress could do: 1) remove the hospital anti-trust exemption; and 2) force hospitals to print on every hospital bill for the uninsured what the Medicare payment to the hospital would be for the uninsureds’ treatment; 3) post all Medicare payments for every procedure on the web, accessible by looking up each hospital in each state.

This would give real knowledge, on an individual basis, to the uninsured, and when a $82,000 bill is presented, and Medicare only pays $14,260, it would be something everyone can understand.

But when Senate staffers carrying water for the hospitals hear the idea of printing the Medicare price on every uninsured person’s hospital bill, they go into full defense of the hospitals mode, and do everything possible to perpetuate a system that, as anyone can see from the multiple reports like the one above, is unfair, is driving health care inflation and cannot be reformed on its own.

Why are the hospitals not playing by the same rules as the rest of the U.S. economy that has price transparency forced on it at every gas station, Home Depot or web site selling any other product or service?

The hospitals do it because they can.

Here is an excerpt from the recently published book, America’s Health Care Crisis Solved, on the findings of two of the largest purchasers of health care in the United States:

“The California Public Employees’ Retirement System (CALPERS) and the Pacific Business Group, which buys $10 billion in health care services among the employers who are its members, jointly commissioned a study in California of hospital prices, which was published in January 2008. Their public statement summarizing the results of the study begins: ‘A new study designed to uncover the key to understanding hospital prices confirms what large purchasers have long suspected: A disturbing number of hospitals appear to be grossly overcharging and not being held accountable.’”

Peter V. Lee, Chief Executive Officer of the Pacific Business Group said, ‘This report underscores what we have long suspected: that some hospitals are basing their prices to private insurers and patients on what they can get away with.’”

There is no competition, no price clarity — who else other than Medicare and the hospitals know what a fair and reasonable price is?

CalPERS, in its media release about their study says it exposes only the “tip of the iceberg” and closer study “could help expose the wrongdoing.”

The only political institution that has had the courage to confront the hospitals, and begin to force price transparency on them is the White House, under this President.

President Bush signed an Executive Order “Promoting Quality and Efficient Health Care in Federal Government-Administered or Sponsored Health Care Programs, which has resulted in the Medicare price for the most common 51 procedures performed being posted on the web by the U.S. government. These prices can be found by state and by hospital in each state.

Here is the Centers for Medicare and Medicaid’s media release about recent and dramatic improvements to their hospital pricing website.

Hospitals will be forced to confront this entire issue, and by refusing to meet the demand of the uninsured and other who want to know the price of a service, they will force the pressure to build to the point they will be forced to do it, sooner or later.

America’s Health Care Crisis Solved has as Appendix A, the testimony of Dr. Gerard Anderson before the Energy and Commerce Committee of the U.S. House of Representatives which I recommend reading. Dr. Anderson, who is a Professor at the John Hopkins School of Medicine, has written another article which may also be of interest, From ‘Soak the Rich’ to ‘Soak the Poor’: Recent Trends in Hospital Pricing.

2009 HSA Deposit Limits

Individuals: $3,000

Families: $5,950

Allowable Additional Catch Up Deposit for those 55 and older: $1,000

Contributions can be made as late as April 15th for the preceding year.

December 1, 2008 is the last day this year to get an HSA qualified health plan, and make the maximum allowable deposit for 2008.

80,000 Americans Vote with their Feet for Better, Less Expensive Care Abroad

The globalization of health care treatment is underway, and Kiplinger’s Retirement Report is busily telling newly minted, or soon to be minted seniors how to get better, less expensive care abroad.

Kiplinger’s start with an entrepreneur whose health insurance became so expensive they made the rational economic decision to drop it — and instead use the money to treat their number one health problem, a blown out knee.

[ATTENTION HOSPITALS AND INSURERS: if you don’t make insurance and treatment affordable, by opening up your process to competition and new health care financing strategies, Americans will choose a more effective solution to their needs.]

Why pay $1,400+ per month for insurance that will not cover your bum knee?

Why get care for that knee when U.S. hospitals, who cannot price their services based on reality, want to charge you $90,000?

The answer is you effectively give the insurance and the hospitals the bird, spend $17,000 (all-in, flight included) to go abroad where, says the woman with the blown out knee, “‘the care was phenomenal.’ Everyone spoke English, and the nurses doted on her. The surgeon answered her many questions. ‘It’s the way care used to be.’”

Eighty thousand Americans travel abroad for health care treatment every year.

Kiplinger’s goes on to state: “The rising cost of health care in the U.S. is driving the trend. Many medical tourists are uninsured like Percak-Dennett or have policies that have big co-payments or won’t cover certain treatments. Some travelers have high-deductible insurance policies paired with a health savings account. You can use an HSA tax-free to pay for many overseas medical procedures.”

The market is responding to irrational hospital pricing, based on what they can get away with charging (because of complete ignorance of what a hospital procedure should or actually does cost) and it is 80,000 person strong trend that should be encouraged.

Finally, there is a growing class of Americans — baby boomer seniors — who are just saying no to insane health care prices, and as employers begin to pull their employees into the health care abroad benefit, price sanity will be eventually forced on U.S. hospitals by the marketplace.

Lets hope this trend becomes a flood — but at least there is a significant alternative to nutty hospital pricing and their legal monopoly status in the U.S.

Why Hospital Prices Must be Transparent

Hospital prices must be made transparent, because no market can work without clear prices for goods and services.

Can you walk into a Wal-Mart without seeing the price of anything for sale? No. Jiffy Lube? Giant? Safeway? Mejiers?

America has been lulled into accepting invisible pricing and huge insurance premiums for health care, which have driven the cost of health care to heights unseen, and made health care unaffordable for many — which has provoked the political system into relieving the costs for employers and individual by expanding government control of health care.

The United States government already spends 50% of the money spent on health care every year.

Why with more government control will health care be less expensive or higher quality?

The market, which can change and react, which has proven itself in every other market in the United States, has increased quality and lowered prices in one health care sector that is without insurance, Lazik eye surgery. What started out as $5,000 an eye has become $500 an eye, with higher quality results.

Until hospitals start acting like businesses which sell goods and services and price them for all to see, and to compete with, then we will be constantly at the mercy of radically increasing health care prices.

California’s Single Payer Train Wreck

The Sacremento Bee ran an op-ed that revealed one of the reasons the right-left alliance in California that pushed for universal health care could not even get a bill to be voted out of one Committee in either the California State House or Senate: a $210 billion price tag for the single payer option.

Democrats love the health care issue because the public trusts them more on health care.

Democrats can pound away verbally at the problem without providing a systemic solution that has the legs to actually become law.

In fact, in the past two decades, every major Democratic led health initiative has failed, while two major Republican health initiatives have passed Congress and become law.

Before people get up in arms about the statement above, HillaryCare failed, the Patient Bill of Rights failed, while the Medicare Prescription Drug benefit with the Health Savings Account (HSA) provision became law, and HIPAA, with the Medical Savings Account (MSA) pilot, became law. Democrats were in control of both Houses of Congress, and controlled the White House, during the HillaryCare fight.

One of the reasons that Democratic health care initiatives fail is because the Democrats themselves are divided between those who want a Canadian style health care system, and those who want to use the tax code and other such mechanisms to reform health care. This division contributed to the explosion on the launch pad that was the California health care reform effort.

But ultimately, all health care reforms must pass the “Where is the money going to come from?” test, and the fact is, the most spending by the U.S. government on any single thing is on health care — specifically on Medicare, Medicaid and the tax break for employer health plans. The total expenditure on those three items is north of $1 trillion a year.

The fact of the matter is that the money for health care reform, will most likely come from the money the U.S. government now spends on health care.

This will make the job of any health care reform plan, even more difficult, and is likely to result in no reform becoming law anytime soon.

Docs Hate Practicing Medicine & the $210 Billion California Health Reform Train Wreck

The New York Times ran an op-ed by Dr. Sandeep Jauhar, a cardiologist on Long Island, who is the canary in the mineshaft for doctor discontent.

Doctors are not happy with the state of medicine in the United States. Here is a short and partial list of general complaints:

“Stories of patients armed with medical knowledge gleaned from the Internet demanding antibiotics for viral illnesses or M.R.I. scans for routine symptoms are rife in doctors’ lounges. Malpractice worries also remain at the forefront of many physicians’ minds, compounded by increasing liability premiums that have forced many into early retirement.”In surveys, increasing numbers of doctors attest to diminishing enthusiasm for medicine and say they would discourage a friend or family member from going into the profession.

“The dissatisfaction would probably not have reached such a fever pitch if reimbursement had kept pace with doctors’ expectations. But it has not.

“Doctors are working harder and faster to maintain income, even as staff salaries and costs of living continue to increase. Some have resorted to selling herbs and vitamins retail out of their offices to make up for decreasing revenue. Others are limiting their practices just to patients who can pay out of pocket.”

This may explain why 65% of doctors in the United States want a single payer system. Not being paid for your work, having to fill out paperwork and chase claims would frustrate any doctor, especially if they went hundreds of thousands of dollars in debt to become a doctor, just to fight with a managed care voice on the phone to treat their patient.

Patients with an HSA should pay their doctor cash from the account at the time of the service, and the doctor should give the patient a price that takes into account the fact the doctor is getting paid the day of the visit and that the doctor does not have to chase their payment from the insurance company.

This would go a long way to helping doctors understand why a cash paying patient with an HSA is better for their bottom line, and that the patient is the one making the decision with the doctor, not an insurance bureaucrat who is looking at a computer screen, not the patient.

Who is Against Affordable Health Care?

Craig Barrett, Chairman of Intel Corp. told the U.S. Senate Finance Committee it would be spending $1 billion a year on health care soon, and that “we’ve just been writing checks,” and that those days are coming to an end.

The President of the Blue Cross Blue Shield Association noted that the employer has been “a heretofore passive partner in this.” This, of course, is the ever expanding cost of health care — and it is clear, or should be clear, that there are some in the health industry that do not want the rate of increase of health care costs to decrease.

Am I saying everyone is not for affordable health care?



Really, really.

Prove it.

OK, from Forbes Magazine: “Wellpoint’s earnings would suffer if the upward march of health care costs (and the corresponding insurance premiums) collapsed from its 8% annual rate to the 2.5% inflation rate,” said Wellpoint’s finance chief.

If the lion’s share of health care inflation comes from hospitals jacking up their prices because they market will pay whatever they charge, since no one knows what medical goods and services actually cost, why would the insurers want the hospitals to bring down their prices?

If Craig Barrett of Intel wants to focus on cost, he should look at the report done by CalPERS and the Pacific Business Group on Health on hospital pricing. Here is what the study concluded:

“A new study designed to uncover the key to understanding hospital prices confirms what large purchasers have long suspected: A disturbing number of hospitals appear to be grossly overcharging and not being held accountable.”

If employers are waiting for insurers to contain hospital costs, effectively, the employers really are “just writing checks.”

Meanwhile, back in the Real Health Care Economy

This health care economy exists in the real world, with real prices and real paying customers who pay for a service when they get it and with real competition over service, privacy and, yes, prices.

Yes, this mythical health care economy does really exist.

There are more than 60 Any Lab Test Now franchises in the United States. Founded by Dr. David Perlow in Atlanta, Georgia in 1992, they perform accurate and cost-effective lab tests in a “fast, efficient and discreet manner.”

In another related development of an actual health care economy with prices for services, by the end of this year, between 1,500 and 1,800 in store health clinics will open in Wal-Marts, Targets and grocery and pharmacies, according to Sarah McIntosh, writing in the Wichita Eagle.

I love going to the MinuteClinic in the CVS near my house. The last time I was there I had bronchitis and I signed in, got a flu shot (even though you really are not supposed to if you are sick — don’t worry, I’m fine) and got the prescription in about 10 minutes. All-in, the visit, with the flu shot cost about $70. And I walked into the clinic. I did not wait. It was a Friday and I did not want to wait until I could get a doctor’s appointment on Monday, and be even more sick, and then get the prescription. Filling the prescription took longer than going to the MinuteClinic. This is how the real health care market place works, it is cheaper, it is faster, and it is more convenient.

HSA Investment Tips — the Fund that Protects You from Congress

The Security and Exchange Council (SEC) could not believe the central fact behind a new mutual fund called The Congressional Effect Fund, a public, registered mutal fund.

What fact?  This one:

Since 1965, the S&P 500 index has gone up in price at an annualized rate of 17.6% on days when Congress is Out of Session, and at an annualized rate of 1.6% on In Session days.

So, with complete disbelief in this fact, the SEC had it checked.

And, based on 43 years of market performance and more than 11,000 data points, the above statement is true.

The SEC then allowed The Congressional Effect Fund to be set up, which is in the market on days Congress is out of session, and out of the market on days Congress is in session.

What is causing this effect on the market?  Primarily, when Congress merely proposes new legislation or takes some limited action on some legislation, even it does not pass or become law, the market discounts the value of the companies in the industry that the law could, if it passed, impacts.

This sounds like a great fund to put your HSA investment funds in, and I am going to — since the inescapable conclusion, according to the founder of the fund, Eric Singer, is that “Congress destroys wealth.”

This fund is the way to protect your wealth from the highly negative effects of being in the market when Congress is in session.

You can contact the fund at 888.553.4233 or write the Congressional Effect Fund at c/o Matrix Capital Group, Inc. 630 Fitzwatertown Road, Willow Grove, PA 19090, or visit them on the web at www.congressionaleffect.com.