Blues pledge nationwide expansion of HSAs
■ Most Blues patients in most states will have access to health savings accounts by the end of 2005.
By Robert Kazel — Posted Dec. 13, 2004
The BlueCross BlueShield Assn., arguing the nation's health insurance problems can be alleviated by giving patients increased control over the care they choose, said in November that its member plans would offer a variety of PPO products tied to health savings accounts in virtually every state by 2006.
The announcement, seen by the AMA and other HSA supporters as a vote of confidence, was one of several recent decisions by large insurers either to introduce or expand the availability of HSA-connected, high-deductible products. Under federal law, insurers have been able to offer these products to members since January. Only a small minority have enrolled to date.
Twenty-three out of the Blues association's 41 plans, covering about three-fifths of the United States, have started selling products compatible with the new savings accounts. The plans will be available from 39 Blues plans by the first quarter of 2006, located in 49 states and the District of Columbia, said Alissa Fox, executive director of policy of the Chicago-based Blues association.
The products tied to health savings accounts, on average, will cost patients about 15% to 20% less when compared with the premiums they would pay for traditional PPO coverage, she said.
Health savings accounts, approved by Congress in 2004 with the support and advocacy of the AMA, involve a high-deductible health insurance plan, offered by a private payer, that can be used for catastrophic coverage, and permits patients to remove funds for a wide range of routine medical care from a special account.
Funds invested in an HSA roll over from one year to the next, and the account is portable.
Like IRAs, HSAs may be invested in stocks, bonds or mutual funds.
Interest in HSAs has been slowly building this year, especially among middle-aged patients who feel they need tax breaks, according to Cary Badger, vice president of customer marketing for the Regence Group, a company that owns Blues plans in Idaho, Oregon, Utah and Washington.
Regence's member plans rolled out HSA-compatible accounts in the summer, and so far just 5,000 out of about 3 million patients have enrolled. But more patients are expected to opt for the plans once they understand them better, and policies come up for renewal, he said.
"Our research shows people don't want others to make decisions about their health care, except their physicians maybe. That was the backlash to managed care years ago," he said.
About 90% of insurers in the United States are likely to offer HSAs by 2006 because plan sponsors and patients will demand the option, said Bill Sharon, senior vice president at Aon Consulting in Tampa, Fla. Blues plans are both part of that trend and a driver of it, he said, and realize that companies increasingly will want one payer to offer them a variety of traditional and high-deductible products.
"Blue Cross has to have the HSAs or they risk losing HMO and PPO business they have," he said.
Other insurance companies also have taken steps to market increasingly in the HSA arena. UnitedHealth Group announced Nov. 29 it plans to acquire St. Louis Park, Minn.-based Definity Health Corp., a privately held insurer that specializes in high-deductible plans tied to health savings accounts, for $300 million in cash.
The deal, which requires regulatory approval, would add about 500,000 people to United's customer rolls and would give the Minnetonka, Minn.-based managed care company a ready-made base from which to further expand into the consumer-driven health care field. Definity's customers are large, self-insured employers.
Humana Inc. said in November that it's introduced its own high-deductible plan paired with an HSA, called HumanaOne. The product is being offered in cooperation with JPMorgan Chase Bank, and will allow patients to use a Humana-branded debit card to pay for health care expenses.
Kaiser Permanente also announced in November its plans to offer an HSA-connected health product in conjunction with Wells Fargo Bank starting in 2005 in its Colorado, Georgia and Northwest regions.
An intensified promotion of HSA health plans by the Blues represents "a major public awareness win" for advocates of health savings accounts, said Jeremy A. Lazarus, MD, vice speaker of the AMA's House of Delegates and a psychiatrist in Greenwood Village, Colo.
HSAs are consistent with the AMA's policy of supporting individual choice in health care and represent one of several changes needed to improve the U.S. health care system and help facilitate coverage of those presently uninsured, he said.