The HSA Myth

by Deacon Blues

Remember all that talk yesterday from the House and Senate GOP members about the virtues of high deductible policies coupled with health savings accounts as an alternative to more government involvement in the marketplace and universal coverage? That is, until Obama rightly smacked them down by pointing out that a $40,000/year working class stiff had no disposable income to put into a HSA, unlike a well-fed congressional Republican with an annual income nearing $200,000 (not counting bribes from the industry).

Guess which policies have seen some of the largest increases, threatening to bury small businesses?

Tom Simmons, president of an Oakland design and consulting firm with four employees, said he had just read about the Anthem increases when he opened a letter from his insurer, Blue Shield of California, informing him his monthly family premium would go up to $1,596 a month from $908, a nearly 76 percent increase.

[snip]

(B)usinesses in the small-group market - those with fewer than 50 employees - are reeling from the latest spikes in their health rates.

Those who reported the highest rate increases appeared to have a high deductible Blue Shield policy paired with a savings account.

Funny, I don't recall the GOP mentioning this yesterday, in all their ranting against government involvement, and talk of letting the marketplace work.

California insurance experts say other health insurers have had to raise their small-group rates, particularly for HSAs.

"Every carrier has been mispricing the product because we don't have the data," said Steven Lindsay, a lobbyist for the California Association of Health Underwriters and an insurance broker.

Yet the GOP's alternative to health care reform is to send families and small businesses off a cliff into financial ruin with a product designed to maximize industry profits and minimal tax benefits for everyone but the wealthy. Too bad that didn't come up yesterday.