I have spent a good part of the past few months reading and talking about health care. In the back of my mind is always the nagging question that many other Americans are asking themselves: “What about me? What will all this mean for my health care?”
I cannot answer these simple questions for my own family’s consumer-driven health plan. Complicating my job is the fact that the president has not endorsed or even summarized a specific policy or a plan. Which leaves us reading the bills or whatever is publicly available, though these items change on a daily basis.
Through all the obfuscation and dissimulation, the outlook for my family’s health insurance is not good. President Obama and Democrats in Congress still repeat the line, “If you like your insurance or your doctor, you can keep them.” But the clear effect of the House and Senate bills would be to take away my high-deductible plan and accompanying health savings account (HSA).
Start with the minimum requirements for health insurance under the House Democrats’ plan. Many of these are above and beyond my current level of coverage, meaning my insurance wouldn’t satisfy them — and I’d have to buy a more comprehensive (and expensive) policy. These requirements include medical equipment for the home, cost-free preventive services, limits on out-of-pocket expenses of $10,000 per family (my share of out-of-network services could be twice as much, so that’s a potential disqualifier), and oral-health and vision services for children under 21 (my children’s dentistry and vision care are not covered).
There’s also a minimum actuarial value of 70 percent, meaning that the insurance policy would have to cover 70 percent of my family’s expected cost of care (based on our demographics). Regulators would calculate my policy’s actuarial value without counting my Health Savings Account (HSA), which would guarantee a low actuarial value, and so mean my insurance does not cover enough.
The whole reason we chose the high-deductible policy and the HSA was to save money on premiums — with the full knowledge that the insurance policy would not cover our costs until we reached our deductible. Our preferences do not matter under the law, however, and my family would have to purchase a more expensive insurance policy deemed acceptable to the government.
We are not alone in this impending upside-down world of government protections. The Congressional Budget Office found that actuarial values for policies purchased in the individual market “range from 40 percent to 80 percent with an average value that is between 55 percent and 60 percent.” In other words, most of the 18 million of us who now purchase insurance on our own, and the millions without insurance who do not qualify for government programs, will either pay a fine for not having enough insurance or buy more expensive policies. (Obama has insisted this does not amount to a “tax,” even when confronted with dictionary definitions to the contrary.)
When Sen. Jon Kyl (R., Ariz.) offered an amendment that would stop the federal government from declaring my choice of health-care benefits insufficient, Democrats and Sen. Olympia Snowe (R., Maine) shot it down. Another amendment from Senator Kyl would have stopped the government from setting actuarial values for insurance plans, thereby providing protection for my insurance. Democrats killed that, too. Sen. Chuck Grassley (R., Iowa) offered an amendment that would have made HSAs count toward actuarial values. It died.
As the Finance Committee ended its work late in the evening of October 1, Sen. Max Baucus (D., Mont.) ruled Sen. Ron Wyden’s (D., Oreg.) Free Choice Act out of order. The Free Choice Act would have opened proposed state-run exchanges to businesses of any size as well as to individuals who, like me, choose not to take the coverage offered by their employers. Without the Free Choice Act, about two-thirds of workers would be ineligible to participate in the government-sanctioned exchanges the health-insurance bills would create.
If those bills pass, I will have less choice about insurance and care than I do today. My insurance policy and health savings account are not guaranteed. My family will pay more for insurance. We will be tied to my employer’s plan, which means that if I change jobs I will also have to change insurance providers.
Meanwhile, the evidence continues to build that HSAs and their cousins, flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs), provide a chance for real reform that lowers the cost of health care while improving quality. A review of the literature by the American Academy of Actuaries found that these plans lead to lower costs the first year they are implemented, have smaller premium increases than traditional PPO plans, are tied to more use of preventive services, and make patients more likely to follow evidence-based care guidance.
It may be difficult to read and understand the health-care bills before Congress, but the end result is clear enough: fewer choices and higher cost for my family and millions of others.
– Joseph Coletti is health-care- and fiscal-policy analyst at the John Locke Foundation.