Will Divide Nation into Healthy vs. Sick, Rich vs. Poor
FOR IMMEDIATE RELEASE
Thursday, July 15, 2004
Gail Shearer, (202) 462-6262
(Washington, D.C.) — High-deductible health insurance and health savings accounts — cornerstones of the Bush Administration’s healthcare policy — further divide the nation by splitting the healthy from the sick and the high-income from the low-income, two new studies published in Health Services Research show.
Gail Shearer, director of health policy analysis for Consumers Union, who published a commentary on the studies in the same issue of the magazine, said the studies serve as the “proverbial canary in the coal mine” about the current direction of the nation’s healthcare policy.
“We may look back at this time as the turning point in American healthcare, when the nation turned away from health insurance with modest deductibles toward a system of high deductibles for those lucky enough to have health insurance,” Shearer said.
The first study examined 16,000 employees at the University of Minnesota. It found that those who enrolled in so-called “consumer driven health plans” – plans that cost less up front due to high deductibles – had incomes 48 percent higher than those who selected low-deductible plans.
“This blows apart the theory that high and low-income employees have the same preferences with regard to high deductibles health insurance plans,” Shearer said. “It shows that wealthier, well-educated employees select high-deductible plans because they believe they will come out ahead financially, while low-income employees don’t have that choice, because they can’t afford it.”
The second study of 4,680 employees of Humana, Inc., found that only 7 percent of employees selected high-deductible plans, illustrating a lack of employee interest. Those who did opt for high deductibles were “significantly healthier on every dimension measured.”
Shearer said the administration policy of supporting higher deductible plans has the potential to unravel the important risk-spreading role of the employer-based healthcare market. With the healthier and wealthier cherry-picked by these plans, traditional low deductible plans will be driven out of the market under the weight of sicker and lower-income Americans.
Exacerbating the problem is the permanent creation of “health savings accounts” in the recently passed Medicare bill that lets most Americans set up tax-advantaged savings accounts when they have high-deductible health insurance. These accounts benefit the wealthy, who can afford to place money in these tax-sheltered accounts, Shearer said.
“This new form of healthcare may drive low-deductible coverage out of the marketplace,” Shearer said. “And with the latest Medicare bill including health savings accounts, high-deductible coverage may be the only coverage we’ll see in the just a few years.”
To request Shearer’s commentary and the studies, go to http://www.blackwell-synergy.com/links/toc/hesr/39/4p2
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