'Consumer-directed health' care is a bad bet
November 21, 2008
Bill Cotterell’s column on “health investor plans” (“More see the savings in health investor plan,” Nov. 17) requires a response.
As a physician, I’m happy to see that my fellow state employees have generally been smart enough to avoid the so-called “health investor plans.” The whole idea of “consumer-directed health care” is a misnomer and bad idea.
Let’s start with simple numbers. The idea that $4,950 is going to help a family buy health insurance is absurd, when the average family expenditure on health insurance is $12,000. In addition, health insurance premiums have been rising much faster than the rate of inflation, and I’m sure the state will not be matching that inflation rate.
But the problem with health investor plans is more sinister. As Mr. Cotterell says, “It’s a good deal if you’re healthy.”
The idea that all healthy people would be in one insurance pool and all the sick people would be in another is against the basic concept of insurance. A low-cost insurance plan would have a huge number of healthy people and a small number of unhealthy. That way, the costs are spread across the largest numbers, and all benefit. Health investor plans are the vestige of a mean-spirited “me only” generation and show little compassion for the sick. Remember, it takes only a sudden accident or illness to quickly move a person from the healthy group to the sick group, and no one is immune from that possibility.
Finally, consumer-directed health care does not work.
Studies have documented that women incur a $1,000 pay cut when using them, because of the high deductibles and co-pays ( Journal of General Internal Medicine , 2007). The Commonwealth Fund study in 2006 showed people delayed needed care more often, resulting in higher health-care costs. Ninety-two percent of employers do not contribute to health savings accounts. That discourages people from getting preventive care, something both presidential candidates touted as a solution for our health care insurance crisis. Most of these plans are managed by for-profit companies, leading to very high administrative costs. Overall, they provide no overall cost saving to Americans, because the sickest few account for the greatest percentage of health-care costs, and those folks, wisely, don’t choose these plans.
Health investor plans are a stupid solution invented by people who have no real idea of what it takes to properly protect people from serious financial losses due to health care needs.