HSAs boost cost consciousness, but may curb care

WASHINGTON, D.C.-The good news about consumer-directed health plans is that they seem to make individuals more sensitive to healthcare costs and more careful purchasers of health services and products. More than 1 million workers have enrolled in consumer-directed health plans, which combine a tax-preferred health savings account (HSA) with a high-deductible ($1,000 to $2,000) insurance plan; about 10 million have straight high-deductible plans.

In addition to helping employers reduce the cost of health benefits, the proliferation of these low-cost coverage options provides more affordable choices to individuals who otherwise might have no health insurance. More than one-third of people in high-deductible plans were previously uninsured, points out Karen Ignagni, president of America's Health Insurance Plans (AHIP).

At the same time, high-deductible plans appear to have negative effects on patient care and boost the individual's share of health spending. A recent survey by the Employee Benefits Research Institute (EBRI) finds that more than one-third of 1,200 respondents delayed or avoided health services, about twice the portion of those with traditional health coverage. And fewer people (40%) in consumer-directed plans say they are highly satisfied with their coverage, compared with more than 60% with comprehensive insurance. Some of this dissatisfaction stems from the fact that more employers are offering only a high-deductible plan, forcing some individuals to pay more out-of-pocket for care: the survey shows that individuals with high-deductible plans are likely to spend a larger share of their income (5%) on out-of-pocket healthcare costs and premiums than members of traditional plans.