HSAs in FEHBP?
The Washington Post
March 25, 2004
House Panel Hears Concerns About Offering Health Savings Accounts
By Stephen Barr
The House civil service subcommittee plunged into a debate yesterday over whether federal employees and retirees should be offered “health savings accounts” as one of their choices when buying health insurance.
Yesterday’s hearing began with an overview of the FEHBP by Dan Blair, the deputy director of OPM. But the questioning soon turned to the issue of HSAs, with Rep. Jo Ann S. Davis (R-Va.), the subcommittee chairman, asking Blair whether the option might siphon off young people from fee-for-service and other insurance plans.
Blair said OPM did not project a “mass migration” into HSAs based on FEHBP’s
experience in offering “consumer-driven options” since 2002. Consumer-driven
options provide a spending allowance for health care, a free checkup and some other preventive care. But they also are designed to encourage enrollees to hold down medical spending, because they include substantial deductibles when the spending allowance has been used up.
Only 13,151 people have enrolled in consumer-driven plans, Blair said, suggesting that HSAs, if offered, would likely start off with modest enrollment and would not undermine FEHBP’s ability to spread insurance risks across its enrollment — about 9 million Americans.
But Del. Eleanor Holmes Norton (D-D.C.) repeatedly challenged Blair and contended that young people would be drawn to the tax savings provided by
HSAs — splitting FEHBP’s “risk pool.” If that trend developed, Blair said, OPM would step in and redesign the program so that no insurance plans would
be stuck with a higher share of the ailing and sick.
http://www.washingtonpost.com/wp-dyn/articles/A22467-2004Mar24.html
Comment: How would you redesign an insurance program that has concentrated high cost individuals into a separate risk pool? Wouldn’t it be more logical to design the program so that it would prevent risk segmentation?