Medicaid to offer HSA pilot program
By Amy Snow Landa
American Medical News
March 13, 2006
Health savings accounts aren’t just for the private market anymore.
President Bush has signed legislation that will allow up to 10 states to offer Medicaid recipients “Health Opportunity Accounts” that are similar to health savings accounts available in the private market.
The provision allows participating states to test whether HOAs encourage Medicaid recipients to be more cost-conscious about their health care decisions by giving them a stake in their health care spending.
“That’s especially needed in Medicaid, because people on Medicaid have had very little exposure to the actual cost of their health care consumption,” said Grace-Marie Turner, president of the Galen Institute, a health policy research organization in Alexandria, Va., that advocates for consumer-driven health care.
HOA enrollees who leave Medicaid can use their remaining account funds to pay for health care services or coverage, or even job training and tuition expenses.
That makes sense, said the Galen Institute’s Turner.
“If you don’t need the money for health care, allow people to use the money for something they value — that’s part of the savings incentive,” she said.
The federal program is limited to 10 states in the first five years, but the secretary of Health and Human Services is allowed to extend the program nationwide after the five-year period ends. If that occurs, the program’s costs will triple over the second five years to a total increase in federal Medicaid spending of $265 million over 10 years, the CBO estimates.
http://www.ama-assn.org/amednews/2006/03/13/gvsa0313.htm
And…
Health Opportunity Accounts for Low-Income Medicaid Beneficiaries: A Risky Approach
By Edwin Park and Judith Solomon
Center on Budget and Policy Priorities
November 1, 2005
Conclusion
While the scope of the Health Opportunity Accounts demonstration project is limited for the first five years, the use of such accounts for low-income Medicaid beneficiaries poses a significant risk of reducing beneficiary access to medically necessary services. The Health Opportunity Accounts could leave some beneficiaries, particularly those in poorer health, responsible for out-of-pocket costs related to health services they need when they have exhausted their accounts but not yet met the deductible. These costs would be on top of the standard copayments that beneficiaries would have to pay once the deductible was exhausted, which themselves would be increased by other Medicaid provisions of the Energy and Commerce reconciliation package. Research indicates that increased cost-sharing particularly affects the ability of low-income individuals to access health care.
At the same time, the Health Opportunity Accounts would add to federal Medicaid costs. By allowing former beneficiaries to keep balances held in their accounts, the federal government would essentially be paying for benefits provided to individuals and families no longer eligible for Medicaid. The demonstration project also would permit, at state option, the use of federal Medicaid dollars to pay for health care services not covered under Medicaid and even for non-medical services.
Despite these substantial risks, after five years, the demonstration project would become permanent, and the Secretary of Health and Human Services could extend it nationwide to all states and all beneficiaries, without review and further action by Congress. All of this leads to a conclusion that the demonstration project in the Energy and Commerce Committee’s reconciliation package is seriously flawed in a number of respects and that its enactment would represent neither sound health care policy nor sound fiscal policy.
(Now enacted.)
http://www.cbpp.org/10-26-05health.htm
S.1932, Sec.6082 Health Opportunity Accounts:
http://thomas.loc.gov/ (Enter S.1932, click “Bill Number” and then “Search.”
Click on S.1932.ENR. Click on Sec.6082.Health Opportunity Accounts.)
Comment: By Don McCanne, M.D.
What lunacy!