Thursday, March 5, 2009

HSAs in Minnesota 

Doing what actually works

By Greg Scandlen

Filed As:  Health Care

The Manitowoc Herald Times reports that a local broker and TPA are trying to discourage the city of Manitowoc from adopting HSAs for its employees, arguing in favor of an HRA instead. The issue was raised by the chair of the city finance committee, Jim Brey, who noted that Manitowoc County had saved $500,000 by switching to an HSA. According to the article, the two critics, broker Mike Stollfus and Joe Holt, dismissed the comparison, saying, “There are no guarantees that HSAs will save money for the city.”

They go on to argue that, “A vast majority of HSAs end up being used as retirement accounts” (which is actually not true), and “they lock up large amounts of money that can no longer be used by the city to pay higher claims.”

Mr. Brey concluded, “I don't think that was a very level presentation. They obviously benefit by selling this stuff to the city of Manitowoc.” The article says, “Brey said he plans to have Manitowoc County Personnel Director Sharon Cornils meet with city aldermen to discuss the county's successes with health savings accounts.”

Patrick McIlheran sums up the experience of Manitowoc County in an op-ed in the Twin Cities Pioneer Press. He asks how HSAs have been working, and the head of the AFSCME responds, “I'd agree, from a financial standpoint, it's worked out well for the employees and the county.” Mr. McIlheran says, “as other governments struggle to cut costs and Washington mutters about reforming health insurance, Manitowoc is more evidence that giving power to patients actually works.”

He adds, “The costs, says County Executive Bob Ziegelbauer, are ‘much, much less than where we would have been if we hadn't done this.’ The plan's premiums did jump 18 percent last year, he says, though the county figures that's because the insurer initially guessed low. The county's now self-funded, and, says Ziegelbauer, it is paying in 2009, per employee, just what it was paying in 2006. Before going to HSAs, costs were doubling every five years or so.”

But he notes that public employee unions are generally opposed to the idea, due entirely to an ideological preference for Single Payer, and concludes, “So even when governments use HSA-style plans to give away money, as Indiana now does in funding Medicaid, they run into ideological opposition. The question isn't whether HSAs and markets work but whether they can be permitted to work.”

• posted by Greg Scandlen
• 4:36 pm
• 0 comment