November 26, 2009
By Robert Hopper, Ph.D.
If you were the CEO of a large corporation and knew premiums would continue to rise, what actions would you take to prepare for the future? An October 23, 2009 report in the Consumer Driven Market Report, a subscription insurance newsletter, provides some insights.
"The huge Blue Cross Blue Shield of Florida will offer only an HSA product to employees next year in the latest sign that larger employers, government workers and unions will be a major source of total replacement offerings in 2010." Total replacement means that companies eliminate traditional HMO and PPO plans and replaces those plans with an HSA-qualified health plan.
Stop and consider the implications of this quote. Who knows more about insurance than insurance companies? And why are they switching totally to HSA-based plans? The answer is simple. Like all businesses they are looking for ways to control their health care costs while still attracting and retaining the best and brightest employees. They think HSAs are the solution.
The above-mentioned report also noted that General Motors just announced it would only offer HSA-based plans to its salaried employees. That's big news. When GM declared bankruptcy, the American taxpayer -- you and me -- bailed them out. Now we expect GM to be smart about controlling health care costs and they respond by choosing HSA-based plans.
Here's an interesting parallel. Instead of traditional health plans, GM will offer its employees a hybrid health plan that couples an affordable high deductible health plan for large and unexpected medical bills with a tax-efficient health savings account for the routine and expected medical expenses. Similarly, GM will offer the American public new hybrid cars that couple a gasoline engine for highway driving, and electric motor for stop-and-go city driving. Hybrids will play a big role in the future.
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1 comment:
Nice blog post on Health Savings Accounts. The question today for employers is how do you protect yourself from next year's rate increases? We are seeing 30% increases in some states.
What is the best proactive step towards leveling and reducing the huge premium increases? We recommend combining a health savings account, a high deductible health plan (HDHP) as well as stop loss insurance. A company can buy aggregate stop loss insurance and cap their liability at a level that does not exceed their otherwise fully insured renewal premium. This presents a no-lose situation for employers.
By electing such a high deductible the premium becomes a lot less and there will be less rate inflation.
Very nice information though!
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