Never in my wildest dreams could I have imagined the response to my March editorial, "I regret enrolling in an HSA." For all the mail I've received since it was published — which ranged from congratulatory to condescending to critical — I am heartened by the vigorous debate regarding the future of our nation's health care system and that, if this response is any indication, benefits stakeholders will continue to be a powerful voice in that ongoing dialogue.

Thanks to all for writing. The following is a sampling of the mail I've received, edited for space and grammar.

Editorial paints 'one-sided picture'

I regret the one-sided picture of CDHP/HDHP and HSA plans you presented. The editorial provided a number of statistics showing CDHP/HDHP participants less satisfied than participants in traditional plans. You didn't cite whether all of those survey respondents made use of an HSA in conjunction with the CDHP/HDHP, which could be a significant factor in their responses. That notwithstanding, I think you failed to consider some important elements in the use of an HSA that are important in evaluating their overall utility.

You point out that CDHP and HDHP participants exhibit more cost-conscious behavior than participants in traditional health plans. Oddly, you don't acknowledge that finding is one of the principal reasons to have these types of plans. I think anyone would agree that overutilization of health care is a significant factor in spiraling health care costs, which is causing some employers to reduce health insurance availability. We need participants to be more cost-conscious and consume less health care to make it more affordable for everyone

The way my company's HDHP/HSA is stuctured, the combination of lower premium contributions by employees for family coverage and employer contributions to the HSA results in the employee suffering no additional out-of-pocket cost in moving from our PPO to our HDHP/PPO.

The only issue employees face is managing the timing of HSA contributions so they have funds in their HSA when needed to cover medical expenses while they are below the deductible threshold. We help by contributing 50% of the annual employer contribution in the first month of the plan year and the other 50% mid-way through the plan year.

Employees can either pay the same amount of money to the insurance company in the form of higher insurance premium or pay less insurance premium and use that money to fund their HSA instead.

The difference is that employees will never get any of the money back that they pay to the insurance company as premium. With the HSA, there is the opportunity to save contributions and keep them tax-deferred for future medical expenses if their health care utilization for the year is less than the total contributions.

I think the right choice is clear.

Larry Besterman, Suzy Chung, Lenka Mulligan and Loria Suggs
TWD & Associates, Inc.
Arlington, Va.

'Era of no accountability has ended'

I read your editorial with some level of disappointment, as it seemed to contain every well-versed argument against HSAs, without giving mention to any of the positive aspects of the approach.

You state, "I harken for the days when I could just put down my $30 copay and keep moving." We all wish for those days, but they are gone. It would be nice to eat chocolate-chip ice cream for breakfast, lunch and dinner, but there are going to be long-term implications for people who choose to do that. Our country is facing serious challenges, and the era of no accountability has ended.

Consumer-directed plans offer hope because, for the first time, we see the power of the American consumer slowly being introduced to our current, third-party payer system. Right now, there is little incentive for someone to ask questions of their doctor. And as you note, doctors aren't prepared to give us the answers that we are seeking. But that doesn't mean giving up or throwing your hands in the air.

If our politicians do the right thing and expand HSAs, some of us will have a chance to save for the future, especially for our older years. Medicare doesn't cover long-term care, for example, but HSA participants will have a chance to pay for LTC premiums, and LTC itself, with HSA funds.

Ask Jeff Cava, senior VP of HR at Wendy's Restaurants, about HSAs. In a single year, Wendy's employees saved over $4.1 million in their HSA accounts, and they took those monies to the next policy year. Other large companies, like Northrup Grumman, Whole Foods and others, have similar success stories. Many people have saved thousands of dollars in their accounts and are educating themselves, taking generic drugs, and engaging in wellness programs and other healthy activities to benefit from their good health.

Kevin Carlin
Houska Insurance Services
El Segundo, Calif.

HSAs 'inadequately supported'

HSAs are a transfer of financial responsibility to employees, not just an increase of cost-sharing. You mentioned that your employer offered you comparison-tool calculators and written information. As you describe it, you pored over all the materials you had been provided and "hoped for the best." I commend you for your courage.

The HSA adoption decision is not a simple one. It requires a full understanding of your budget projections, tax savings calculations, benefits comparisons (for two-earner families), some investment acumen, retirement considerations, family health cost projections with occasional review and emergency funding.

Since carriers don't have the internal expertise to offer the financial advice needed by most workers, they haven't provided employees a solution to the decision-making dilemma created by HSAs. Employers, like carriers, are conflicted; they are afraid to give advice, due to perceived liability exposure. Although inexpensive advice solutions exist to relieve their concerns, they are too unknown to be available in most workplaces.

Independent financial planners love HSAs. They are a great financial planning device if you know how and why to use them, and they do. It is their certain experience that they will work for the vast majority of the population, if given proper advice. Consumer-directed health care programs with HSAs reduce costs for employers and employees, and bring visibility and competition into the health care cost-structure. They are just inadequately supported in the workplace, causing confusion and ill use.

Kevin P. Condon, Ph.D., CFP
EVP, Advisor Services
Myfinancialadvice, Inc.
Boulder, Colo.

Response to rising health care costs should be similar to gas prices

I was shocked when I read the headline of your editorial in the March 2009 issue. I always assumed you were an advocate of controlling spiraling costs and helping people to be more accountable for their own health care.

Frankly, I am surprised by the EBRI survey results. I would have thought the dissatisfaction rate to be higher with HDHPs and CDHPs. Unfortunately, the numbers themselves don't tell the whole story. Personally, I was more satisfied with the price of gasoline when it was 50 cents per gallon than I am now, but I understand that numerous factors will not allow us to go back to those good old days. As a result of higher gas prices, I drive more responsibly (no more clutch-popping or tire-squealing of my youth.) I am also more concerned with preventive maintenance now. I regularly check my tire pressure and change my fluids and filters. See where I'm going with this? Our response to increasing health care costs should be no different.

We have been advocating HSAs since their inception and have many satisfied clients. Of course, there was an educational process that had to take place. We had to share with them the true costs of what they had been insulated from for so long. We also showed them that they were already paying for the PPO perks (drug card and office visit copays) in the form of higher premiums. By taking responsibility for our own health, we learn to be smart shoppers.

Most HSAs have a 100% paid preventive benefit, thereby giving us the incentive to go to our doctors, not avoid them. This "preventive maintenance" may detect something in the early stages that can be treated less expensively and more effectively than if we had waited until there were visible symptoms. Finally, regarding funding your account, we strongly urge the employers to partially fund the employee's account with the premium savings generated by switching from a PPO to an HSA. Many forward-thinking employers provide more because they realize the savings will continue with lower renewal increases.

Matthew D. Fowler
Vice President
Wilkinson Benefit Strategies
Boystown, Neb.

CDHP savings are 'minimal'

CDHP really stands for "Consultant-Driven Health Plan." Employer savings are not being realized on a consistent basis, despite the hype. High-deductible plans have been around for decades, but the cost difference is minimal compared to standard plans. The majority of plan costs usually are attributable to a few participants, and they plow through the deductible anyway. So, really, all the plan is saving is a few hundred dollars times a few employees. Participants utilize the same network of physicians as regular health plans, so there's not a lot of opportunity for value-shopping when it comes to medical services.

Combine that with inconsistent and complex administration, and you really don't have anything desirable at all. This doesn't even address the fact that employers usually have to 'seed' the HRA or HSA account with about half the deductible amount, as well as incent participation with lower, subsidized premiums. This further reduces the 'savings' the plan was attempting to achieve.

When you tell your consultant, broker or carrier representative that participation is low or that your employees don't like it, the first thing they'll tell you to do is to put more money in the account and lower the premiums. It's like giving your daughter $50 in hopes that she'll go to a $10 movie.

Afterwards, you still wonder what happened to the rest of the money, and you hope you don't have to explain the transaction to your spouse!

Paul Dickens
Director of Benefits
Greensboro, N.C.

HSA success depends on 'defined long-term strategy'

I wanted to let you know how much I enjoyed reading your column. I appreciated your view and concerns regarding HSAs. I do have a concern that your column might be a bit irresponsible in how you negatively portrayed HSAs to employers, employees and brokers/consultants. One person's experience does not make for a true evaluation of an entire program.

I would agree that HSAs are not right for all employers or employees, but for those that are properly educated on how to use these plans, and effectively and efficiently navigate their health care, this is an unbelievable product! If you have a long-term strategy, for both the employer and employee this can be a cost-savings for the employee much more than it might be for the employer.

Even in the short-term, it can be a better solution for both. I also think it is high time that employees know what they are being charged for health care. If we can transform employees from scared, timid health care consumers into educated consumers, all parties win.

You stated that most employees with HSAs would not recommend it to peers? We have found the opposite effect with each and every client. Of course this all comes with a defined long-term strategy. The employer and their broker need to build a model to effectively fund, educate and communicate the best options available to employees.

Clint Scott
Principal/Broker
CLS Partners
Austin, Texas

Reader advises 'avoid HSAs at all possible costs'

I could not agree with you more. I sell in the small-group market in New Jersey, and I have advised my clients for over four years now to avoid HSAs at all possible costs for the same reasons you mentioned.

The price points (monthly premiums) are still not nearly attractive enough, the components of the plans are geared to balance cost vs. health — a terrible short- and long-term strategy — and leaves an overall bad feeling in consumers' minds and pocketbooks. Many of my clients are in cost-sharing plans where the deductible and coinsurance only are applicable to certain surgeries and hospital stays.

At least these plans still allow for doctor visit copays only and prescription copays without hitting the deductible and/or coinsurance. New Jersey, like many other states, is desperate for another viable strategy/solution because, year after year, especially in small groups, employers are facing double-digit renewal increases, and the carriers are only offering less and less in choice.

Michael S. Minghenelli
Orion Benefits Group
Marlton, N.J.

For one reader, HSA 'just doesn't make sense'

I agree with your editor's column about HSAs. We have looked at the high-deductible health plan with an HSA option more than once. It just doesn't make sense. Looks like a lot of confusion for employees without having any real magic.

Our health plan is the most important benefit we offer to employees. Why carve it to death? Seems to me if employees are not going for the medical care they need, it is going to ultimately increase cost.

Some employers like to say the HSA option has produced cost savings. I don't believe it is cost savings. I believe it cost shifting to employees. Big difference!

Laura S. Watkins, CEBS, SPHR
Ridgeland, Miss.

CDHPs not truly consumer-driven

Bravo! You have keyed into one of my biggest pet peeves in health care: the misnomer of consumer-driven health plans. These are not consumer-driven.

My employees want a PPO network that allows them to choose their doctor and go to that doctor whenever they want. They don't want a gatekeeper, but will tolerate one if necessary and accept the HMO model. We have run a health reimbursement account plan for the last three years that has a deductible for in- and outpatient surgery — an event that affects a small population each year.

Our evaluation shows when employees have to go through the reimbursement process, they switch plans at next open enrollment. When they don't have an event that hits the deductible, they stay on the plan and choose the cost-effective option.

In short, consumers are not driving this trend! Employers are driving it to save money. As an employer of 175 employees we are sacked with almost $1 million of expense each year and rising!

I don't know the cure, but the HRA and HSA models certainly are not the solution, if care and satisfaction are the measurements.

Thanks for adding your consumer voice!

Peter Langton
Executive Vice President
Pierce Aluminum Co, Inc.
Franklin, Mass.

HSAs vs. traditional plan: Pay now vs. pay later

I'm surprised by your editorial. For most people — as a single or with family coverage — a CDHP is generally a better value and better financial risk mitigator than a traditional plan. The key to this is to understand that if chosen correctly, a good CDHP has a lower annual maximum out-of-pocket than a traditional plan. If someone fully funds their deductible — or even better, the out of pocket maximum — they in effect have 100% health coverage.

You are quite right that cost data is difficult to find at this point unless you are part of the Kaiser system. But, insurers are doing their best to put this information on their Web sites. The key to these plans is the choice of "pay now or pay later." Is it better for someone to keep their money in their account and spend it when necessary, or just simply pay the insurance company a higher premium for the convenience of a $30 copay? In case one, it's your money; in case two, it's gone forever. To your point, people do spend more carefully when it's their money, but isn't the higher insurance premium of a traditional PPO their money, too?

It all comes down to picking the right CDHP with the right plan design and the right education on how to use it. All challenges to be sure, depending on your marketplace.

Vinny Catalano, MBA
Area Vice President
Gallagher Benefit Services

HSAs could 'save health care'

First, let me say how unfortunate it is you had a bad experience with your HSA plan. I do still believe they are wonderful plans. I'd even go so far as to say, given time, they could save health care. My experience is, if your employer offered you a high-deductible plan for $400 a month at their expense, and you could buy up to a PPO with a smaller deductible and some copay for another $200 to $400 a month at your cost, you'd still pick the HDHP.

You'd be saving the $200 to $400 a month, making a significant dent in that deductible. You'd have 100% coverage up to the amount in your Health Savings Account. Why pay an insurance company for a service you might use? Just pay when you use services!

You mention that you shopped for your medical care. It is unfortunate you based your physician choice on price alone. But I think the "shopping" frame of mind is what makes the HDHP/HSA team the true winner. Many doctors order tests that are not necessary just to protect against malpractice. Now consumers can be more informed and save money.

Many generic drugs cost less than the usual copay; now consumers can pay the cash price. You say your family is "in generally good health." If you really embrace the concept, staying healthy saves you money in the long run. So taking better care of yourself now is cost-effective, kind of like maintaining your car. Cigna released a study in January of its CDHPs, "Americans with CDHPs Cut Medical Costs Without Cutting Care." Among the key findings:

•  Medical cost trend was substantially less for CIGNA Choice Fund customers with diabetes (20% less) or hypertension (18% less) than for individuals with either of those diseases in traditional CIGNA health plans.

•  In the first year, pharmacy cost-trend for those covered by CIGNA Choice Fund plans was 10% lower than traditional plan cost trend, with the use of generic medications being nearly 5% higher among individuals covered by CIGNA CDHPs.

•  In the first year, normalized medical trend for CIGNA Choice Fund plans was -3.3%, versus 10.6% for traditional plans. People with CIGNA Choice Fund continued to receive recommended care at compliance rates that were similar or better than those covered by traditional CIGNA health plans.

In conclusion, education, education, education. If employers want a better experience for their employees, they need to provide extensive education on the utilization of the plan and savings account.

I hope you give your plan another try.

Sharon Martin
President
PS Benefits
Westlake Village, Calif.