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Future of Healthcare is Savings Accounts

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Future of Healthcare is Savings Accounts

Future of Healthcare is Savings Accounts

Personal spending accounts are the potential future of medical insurance; instead of conventional co-payment plans as said by the business leaders at a healthcare meeting organized by the Charlotte Chamber.

Although, a modest percentage of health insurance plans are still in use, but HSAs and health reimbursement accounts are on heavy demand. These are hugely accepted by the entire business community of Charlotte area.

Health savings accounts let individuals deposit money in an account exclusively for medical expenses. Companies also pay into these accounts as benefits, but the money deposited in such accounts is fully owned by the employee.

Health reimbursement accounts are a same sort of healthcare plan, however, such accounts are fully owned by the company. Employers keep back specific amount of money every year to staffs the staffs pay for healthcare expenses.

Involvement in such programs is increasing rapidly.

Almost 8 million individuals, country-wide are registered to heath savings account programs, which is an increase of 30% from the previous year. It is increased by 7 folds in comparison to enrollments made since 2005; as surveyed by the America's Health Insurance Plans Association. As of January, over 120,000 North Carolina residents registered for these plans, which is almost 3% of the total 4 million people insured by private insurance.

According to Blue Cross and Blue Shield of North Carolina, the total number of Mecklenburg County individuals who are registered for either health reimbursement or healthsavings accounts grew by almost 49% in the previous year.

In case of conventional co-pay plans, the employees disburse a definite amount and the rest is paid by the company-sponsored insurance; but in case of these plans a definite amount of money for healthcare expenses is paid by the plans. This way the plans persuade the employees to save more money by spending wisely. Small businesses provide some sort of medical insurance through such plans. Contributions made by the employers are tax-deductible.

Roger Rollman of Southeastern Regional spokesperson for UnitedHealthcare said that the days of HMOs are turned out because of rising costs of healthcare.

However, according to Cameron Hayes, the employee benefit consultant for Benefits Controls of the Carolinas, the accounts are not inclined since there is something that helps the employers to cut costs.

In recent times, he assisted Cash Cycle Solutions, a Charlotte-based billing and processing company to shift from a conventional PPO plan to a health reimbursement account plan.

He illustrated on a panel discussion on medical costs that the process was not solely about how the employers can save money, rather it was about to involve workers in this process.

According to him, Cash Cycle Solutions noticed a crash in the number of days the workers call for illness in the previous two year from the shift; probably because of their plan emphasizes more on preventive healthcare.

But still, the move in responsibility from companies to workers lifted red flags. Such plans are commonly known as 'consumer-driven' plans since these let the people determine where and when to obtain healthcare.

According to Jennifer Troyer, a professor in economics at UNC Charlotte and also a moderator of the discussion on healthcare costs, such plans need people to be more tuned in about their spending than they would be. He added that it is not easy to be a good customer in the healthcare market.

There is a risk that President Obama's nation-wide healthcare reform may abolish such type of medical coverage. Nevertheless, Austin Pittman, the chief growth officer from UnitedHealthcare of Carolinas does not assume so.

Another employee benefits specialist, Suzanne Johnson from Strategic Employee Benefit and Services, Charlotte said that these plans should be grasped. She added that 20% of the companies included in her portfolio have either health reimbursement accounts or health savings accounts.


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