racetracks

Congress mulls Health Savings Account (HSA) options
By Bernard J Healey, Ph.D.
A recent study, published in the journal,
Health Affairs, has concluded that
healthcare spending is greater than the
services Americans receive for the
money they spend.
In response to this healthcare cost escalation,
the United States Congress is
attempting to pass new legislation allowing
Americans to establish Health Savings
Accounts (HSA) or Health Savings
Security Accounts (HSSA).
Legislation added to the recently passed
House Medicare reform bill would allow
more companies to offer these accounts.
According to Otto F.Wolke, R.Ph, president,
Schellen and Partners USA Inc.,
healthcare consultants,“Medical Savings
Accounts were part of the HIPAA legislation
of 1996 and new proposals, called
Health Savings Accounts and Health
Savings Security Accounts are being considered
in Congress at this time.While
being touted as vehicles for consumerdirected
healthcare, only about 100,000
accounts have been started under the
HIPAA legislation that had authorized up
to 750,000 accounts.
“For employers and for healthy families
that have the money to put into the
accounts, there are advantages. Money
can be saved and rolled over. In the
inverted bell-shaped curve of healthcare
utilization, these accounts are targeted for
population with much less medical risk.”
Wolke argues that “the insurance companies
win with minimal utilization of
services and lower administrative costs of
handling small claims.The employers win
with a large reduction in healthcare premiums
paid.The healthy employee wins
with the freedom of choice in who to see
and what to spend the healthcare dollars
on, or to keep the money growing in the
MSA account. Financial services companies
also win with more private money
going into investments with subsequent
administrative fees.”
Wolke contends that “the losers are
moderate to low-income individuals who
find it difficult to fund the accounts or to
pay bills prior to having fully funded the
MSA.Young and growing families who
would face large out-of-pocket expenses
with unexpected emergencies or a pregnancy.
Other losers are enrollees with
chronic diseases that require expensive
medication, since these plans have no
drug benefit, and drugs are the fastest
growing segment of healthcare inflation.
Persons who experience frequent hospitalizations
or physician office visits are also
at risk for significant out-of-pocket expenses
that will wipe out the savings account
and leave the patient at risk for costs.”
He explained that “there is often no maximum
out-of-pocket expense, which is part
of most current healthcare insurance programs.The
MSA process takes funds from
the healthcare delivery system and creates
additional savings pools for wealthier individuals
who can afford to pay incidental
healthcare out of pocket and keep the
MSA account for retirement.”
James Davis, government affairs representative,
Blue Cross of Northeastern
Pennsylvania, says “these new proposals
improve current medical accounts by
removing many of the barriers that limited
their use and effectiveness.”
He said current proposals allow employees
to build assets in Health Savings
Accounts through employer contributions,
employee contributions and taxfree
rollovers of a portion of unused flexible
spending account balances.”
Davis went on to say “ insurers such as
Blue Cross of Northeastern Pennsylvania
hope that Congress would go even further
in giving employers and health plans
the flexibility to develop the widest possible
range of products, for instance by
eliminating the requirements that HSSAs
and HSAs must be coupled with plans
that have specific deductible amounts.”
He also stated that “the HSSA accounts
were scored by the Joint Committee on
Taxation as costing much more than
HSAs (roughly $160 billion versus $7 billion
over 10 years), Blue Cross hopes
Congress will consider both products’
potential for advancing consumer-directed
care.With consumers’ healthcare costs
rising, it is more important than ever to
work toward supporting marketplace
innovations that will lead to greater flexibility
and more choices for consumers.
This legislation is an important step
toward increasing consumer choices and
access to healthcare. It will allow health
plans to develop new coverage options
designed to empower consumers and
expand their health coverage.”
Area firm helps to beautify Arlington National Cemetery
Michael Kravitsky, IV, co-owner; Shawn
Kravitsky, co-owner; and Victor Gorski,
sales manager, of Grasshopper Lawns
Inc. of Larksville, traveled to Washington,
D.C., this summer to team up with lawn
and landscape experts from around the
nation in a day of voluntary service beautifying
and restoring the cemetery
grounds at Arlington National Cemetery.
The beautification activities were part of
the Professional Lawn Care Association
of America’s (PLCAA) 14th annual legislative
day on the Hill in July.
Grasshopper Lawns, in business since
1964, has been a PLCAA member since
1980. For more information, call (800)
287-6113. At left, Grasshopper works at
Arlington National Cemetery.
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26 • NORTHEAST PENNSYLVANIA BUSINESS JOURNAL • SEPTEMBER 2003