In my travels, I ask many community and business leaders if their health insurance plans include a health savings account (HSA). “Yes, I think so” is the most common answer I get, but that is quickly followed by “that’s the thing where we have to predict what our out-of-pocket spending might be for the year and then it is taken out of our paychecks as a pre-tax payroll deduction, right?”. I ask a quick clarifying question: “Do you mean the account where you lose the money if you don’t use it?”. I always get back, “Yes, that’s it!”. No it is not!
The level of ignorance for the simplicity, flexibility, and tax-advantaged structure of HSAs created in 2003—now over a decade later—is amazing. How could so many business, industry, and community leaders not have a clue?? Here are some reasons I discovered:
- The use of health savings accounts in health insurance plan design always lowers insurance premiums. In fact, if used as an optimal tool to reduce the cost of healthcare collectively for employers and employees, it can reduce premiums by as much as 60%! Well, as you might guess, the insurance company isn’t too happy if their revenue drops 60% just because you get educated.
- Until recently, all health insurance companies commissioned their brokers as a percentage of premiums (in the NH large group market, Harvard Pilgrim Health Care still pays brokers this way today). Well, the broker isn’t going to be too happy if their revenue drops 60% just because you get educated.
- So, you think the state Insurance Department might help educate business, industry, and community leaders since their mission is “…to promote and protect the public good…” Well, the Insurance Department is funded by the insurance companies through the payment tax as a percentage of premiums! The legislature isn’t going to be too happy if they need to explain another tax increase just because you get educated.
How could this cascaded stacking of anti-consumer, anti-business, anti-society, misaligned financial incentives survive for so long? It only survives through your ignorance.
To get a quick free education on what a health savings account really is, and why you should make sure it’s an integral part of your health insurance plan design, go to: “Don’t have a health savings account? Here’s why you need one.”