Checking Up on Health

Health Policy Briefs: January 31, 2012

Compiled by Benita M. Dodd

Price controls: Everence Insurance of Pennsylvania on Monday became the first insurer flagged by federal regulators for having an unreasonable rate increase. The insurer, a for-profit arm of the Mennonite Church USA, raised rates starting in September by 11.6 percent for its ShareNet policies covering 4,800 people working for small businesses in the state. Now the insurer has 10 days to either withdraw the increase or post on its Web site the reasons it finds the increase to be justified, Kaiser Health News reports.

The growth of account-based health care plans: Employers first started offering account-based health plans in 2001, when a handful of employers began to offer health reimbursement arrangements (HRAs), employer-funded health plans that reimburse workers for qualified medical expenses.  In 2004, employers were able to start offering health plans with health savings accounts (HSAs), tax-exempt trusts or custodial accounts that individuals can use to pay for health care expenses.  The theory behind these accounts is that by giving individuals more control over funds allocated for health care services, they will spend the money more responsibly, especially once they become more educated about the actual price of health services.  These accounts can be used as tax-advantaged vehicles to save for health care expenses in retirement, says Paul Fronstin of the Employee Benefit Research Institute. By 2010, 16 percent of employers with 10-499 workers and 23 percent of those with 500 or more workers offered either an HRA or HSA-eligible plan. These plans covered about 21 million people in 2011, representing about 12 percent of the privately insured market. Though relatively new, the plans appear to be reflecting behavioral changes: Since 2007, the percentage of individuals with a zero balance account has been declining and the percentage of individuals with more than $3,000 has been increasing. Source: Employee Benefits Research Institute

Overhauling health care: Most voters (52 percent) still believe they won’t get all the Medicare benefits they are entitled to and think it will take an overhaul of the health care system to make Medicare financially solvent, according to a new Rasmussen Reports survey. The poll, taken in January found that fewer than ever also regard Medicare as a good deal for working Americans, according to Rasmussen. Just 38 percent of likely U.S. voters are at least somewhat confident that they will receive all their promised Medicare benefits in their lifetime.

Canada model: Waiting times for elective medical treatment have increased for Canadians since last year, according to a report by the Fraser Institute. Specialist physicians surveyed across 12 special ties and 10 Canadian provinces report a total waiting time of 19.0 weeks between referral from a general practitioner and receipt of elective treatment. At 104 percent longer than it was in 1993, this is the longest total wait time recorded since the Fraser Institute began measuring wait times in Canada. Read more at Source: Heritage Insider Online

Quote of Note: “When people can wait until they are sick to purchase insurance, overall premiums rise so high that the health insurance market collapses in an “adverse selection death spiral.” That’s how Obamacare destroyed (and is destroying) the market for child-only coverage in dozens of states. It’s why Obamacare’s CLASS Act collapsed years before it collected a single premium. It’s happening very slowly in Massachusetts, but it is happening. And it will happen to all private health insurance under Obamacare.” – Michael  Cannon, Cato Institute, “Romneycare & Free Riders.”

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