Posted by
Defend America on Monday, March 01, 2010 11:07:21 PM
Hoosiers and Health Savings Accounts
An Indiana experiment that is reducing costs for the state and its employees.
As
Washington prepares to revisit the subject of health-care reform,
perhaps some fresh experience from Middle America would be of value.
When I was elected governor of Indiana five years ago, I asked that
a consumer-directed health insurance option, or Health Savings Account
(HSA), be added to the conventional plans then available to state
employees. I thought this additional choice might work well for at
least a few of my co-workers, and in the first year some 4% of us
signed up for it.
In Indiana's HSA, the state deposits
$2,750 per year into an account controlled by the employee, out of
which he pays all his health bills. Indiana covers the premium for the
plan. The intent is that participants will become more cost-conscious
and careful about overpayment or overutilization.
Unused funds in the account—to date
some $30 million or about $2,000 per employee and growing fast—are the
worker's permanent property. For the very small number of employees
(about 6% last year) who use their entire account balance, the state
shares further health costs up to an out-of-pocket maximum of $8,000,
after which the employee is completely protected.
The HSA option has proven highly popular. This year, over 70% of our
30,000 Indiana state workers chose it, by far the highest in
public-sector America. Due to the rejection of these plans by
government unions, the average use of HSAs in the public sector across
the country is just 2%.
What we, and independent health-care experts at Mercer Consulting,
have found is that individually owned and directed health-care coverage
has a startlingly positive effect on costs for both employees and the
state. What follows is a summary of our experience:
http://online.wsj.com/article/SB10001424052748704231304575091600470293066.html?mod=WSJ_Opinion_LEFTTopOpinion