WSJ claimed Health Savings Accounts yield "high customer satisfaction"; studies show otherwise

››› ››› SAM GILL

Without offering any supporting evidence, a Wall Street Journal editorial claimed that "plenty of data" indicate "high customer satisfaction" with Health Savings Accounts (HSAs), the focal point of President Bush's healthcare plan. But the Employee Benefit Research Institute has found significant levels of dissatisfaction among people covered by the high-deductible, HSA-style plans.

A February 21 Wall Street Journal editorial (subscription required) claimed that "plenty of data" indicate "high customer satisfaction" with Health Savings Accounts (HSAs), the focal point of President Bush's health care plan. The Journal did not provide any such data. But contrary to the Journal's claim, the Employee Benefit Research Institute (EBRI) has found significant levels of dissatisfaction among people covered by the high-deductible, HSA-style plans -- also known as "consumer-driven" health plans -- that form the basis of Bush's health care proposal.

The Bush administration claims that "HSAs allow Americans to save tax-free dollars in accounts to pay for their health care expenses" and are "accompanied by high-deductible comprehensive insurance policies that cover preventive care and larger medical bills." The Journal editorial stated that the plan "combines an insurance policy with a deductible of $1,050 or more with a tax-free savings account to help people pay pre-deductible expenses." The EBRI survey focused on such policies, comparing two categories of health management -- high-deductible health plans (HDHPs), which "have a deductible of at least $1,000 for personal coverage or $2,000 for family coverage" (emphasis added), and consumer-driven health plans (CDHPs), which "had to meet these threshold deductible levels and have a tax-preferred savings account, such as a health savings account or health reimbursement arrangement" -- with comprehensive health plans "with no deductible or a deductible of up to $1,000 for personal coverage or up to $2,000 for family coverage" (emphasis added). The Bush plan is essentially what EBRI describes as a CDHP, requiring a deductible of more than $1,050 and offering tax-free accounts to cover medical expenses.

The EBRI study found that, among those covered by comprehensive health plans, 63 percent were "extremely or very satisfied," while only 42 percent of those covered by CDHPs expressed the same level of satisfaction. Dissatisfaction ranked much higher among those with the Bush-style plan than those enrolled in more traditional, comprehensive plans. Of those enrolled in CDHPs, 26 percent said they were "not satisfied," whereas only 8 percent covered by comprehensive plans were dissatisfied. EBRI also reported that 61 percent of respondents with comprehensive care said they were "extremely or very likely to stay" with their plan if offered the option to change, but only 46 percent of those with CDHPs said they were likely to stay with their plans. Thirty-three percent of those with CDHPs said they were "not likely to stay" with their plans if given the opportunity to switch, compared with only 11 percent of respondents with comprehensive coverage who said they were not likely to stay given the chance to change plans.

The survey also revealed that those with CDHPs were less likely than those in comprehensive plans to seek health care due to cost, especially respondents with an income below $50,000 per year. Of adults with health problems, 40 percent of those in CDHPs said they "have delayed or avoided getting health care due to cost." People enrolled in comprehensive plans were far less likely to delay or avoid seeking care for reasons of cost; only 21 percent with comprehensive coverage said that they had done so. Among those polled with annual incomes below $50,000, the percentages of those delaying or avoiding care for reasons of cost rise to 48 percent of those enrolled in CDHPs and 26 percent with comprehensive care. Overall, 35 percent of people with CDHPs say they have avoided obtaining care because of cost, compared with only 17 percent of those enrolled in a comprehensive plan.

From the February 21 Wall Street Journal editorial:

The centerpiece of his [President Bush's] strategy is the Health Savings Account, which combines an insurance policy with a deductible of $1,050 or more with a tax-free savings account to help people pay pre-deductible expenses. Critics say the relatively high deductible makes HSAs work only for the "healthy and wealthy."

But in fact HSAs are what health insurance would have looked like all along if the employer-insurance tax exemption never existed. That is, insurance for catastrophic illness to prevent destitution but not for routine care. (Think of it this way: What's the deductible on your car insurance?) And with more than three million HSA policies already in existence, there is plenty of data showing high customer satisfaction among policy holders of all ages and incomes.

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Health Care
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Wall Street Journal
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