Friday, January 27, 2006

Color Me Unimpressed...

On the one hand, I remain a staunch proponent of and advocate for Health Savings Accounts.
On the other hand, I hold no truck with those whose approach to health insurance is “one size fits all,” regardless of whether that “solution” is an HSA, a Section 105 plan, or some other wonderful contraption.
On the gripping hand, I don’t believe – and I think I can prove – that HSA’s are not going to destroy our health care system, as some in the medblogosphere suggest. More on that later.
News like this, however, only underscores how little market penetration these plans have made, at least so far:
It’s true that HSA’s are enjoying a popularity that escaped their predecessors (MSA), and a generally more favorable press. More carriers offer HSA-compliant plans, with more interesting configurations.
There are, of course, a myriad of reasons why more plans aren’t being sold. Chief among these, I believe, is that the carriers still haven’t found the “sweet spot:” that magical, perhaps mystical, price-point where the premium savings sufficiently offset the increased first dollar exposure.
In other words, they’re still too expensive.
Members of the political class expect that, in next week’s State of the Union address, President Bush will be touting the recent success of HSA, and perhaps even push for the program to be expanded.
What’s most interesting to me is that, in some ways, high deductible plans hearken back to a time when health insurance was simpler, and cheaper. Now, I’m not waxing nostalgic “for the good ol’ days,” but sometimes simpler is better.
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