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Georgia FORUM | 04/02/2008
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High-Deductible Plans Lead the State Down the Wrong Path

By Daniel Blumenthal [Right click camera icon to download a high-resolution photo of this author.]

As a pediatrician, it's clear to me that many Georgia families are having a tough time affording care for their children while foregoing health insurance for themselves. Far too many must do without coverage at all or wrestle with what they must sacrifice for even minimal coverage.

While a cold will limit itself eventually, an untreated ear infection or asthma attack can be a serious health hazard. Children's health depends on their parents' ability to get medical care for them when they require it. But our elected officials continue to focus on industry-backed proposals that fail to meet the needs of Georgias uninsured working families.

Following on the heels of the now-discredited managed care model, the latest bad idea for health coverage is the high-deductible health insurance policy coupled with "Health Savings Accounts" (HSAs). This approach is usually given the Orwellian name, "Consumer-driven Health Care."

Georgia is now considering a misguided proposal that adds new tax incentives to specifically favor high deductible health plans above all other health insurance. This will benefit very few and will fail to help those who need care the most.

High deductible health plans must have individual deductibles of at least $1,100 and family deductibles of at least $2,200 -- though on average, deductibles are much higher. Under federal law, owners of these plans are allowed to open HSAs, which allow the consumer to set aside money tax-free for use on healthcare services.

Funds in the HSAs can be spent to meet the high deductibles, but if not spent become a retirement account when the consumer reaches age 65 and goes on Medicare. Spending money from an HSA is like spending money out-of-pocket.

Faced with a high deductible and an outlay of cash to meet even minimal health needs, many consumers will postpone needed care and forgo preventive services altogether. In the short run, money will be saved for the consumer and the health care system. In the slightly longer run, asthmatic kids will wind up in the hospital, middle-aged adults with uncontrolled high blood pressure will have heart attacks, and the elderly who failed to get screened for cancer will have it discovered in advanced stages. Health care costs will increase and Georgians will be less healthy.

People in good health who can afford to pay the high deductibles out of pocket will enjoy the tax advantages of the HSAs; "tax shelters for the healthy and wealthy." The main beneficiaries of the tax breaks would be the insurance companies, which would get about $146 million -- roughly two-thirds -- of the estimated $217 million in tax benefits over a five-year period. Moreover, the insurance companies get these tax breaks for selling policies they would sell anyway.

Proponents argue that it will greatly expand health insurance to hundreds of thousands of uninsured Georgians, though available evidence does not support such claims. In a story for the Atlanta Journal-Constitution, one prominent Georgia health insurance expert has recently called these predictions "totally unrealistic."

High deductible health plans are not affordable options for the majority of Georgias uninsured population, who come from low to moderate income working families. They are uninsured because they cannot afford coverage, and the modest tax breaks included in this proposal will do almost nothing for them.

Instead, these small incentives will be more likely to motivate already-insured individuals, families and employers who offer comprehensive coverage to their employees to switch to high deductible plans. And, rather than reducing the number of uninsured, the state would increase the number of underinsured.

By definition, high-deductible health plans cannot cover primary care services, prescription drugs, mental health care, and many other services until the purchaser has reached the deductible, which often exceeds $2,500 for an individual and $4,500 for a family. Proponents of high deductible plans claim that the "personal responsibility" of the consumer will motivate them to live a healthier life, but research has shown that high deductibles simply prevent people from getting medical care.

High deductible plans fail to meet the needs of the majority of the 1.7 million Georgians who currently need health coverage, but cannot afford it. We need a plan that will help Georgians receive the health care they need and deserve. Asking people to pay more money out-of-pocket is not the answer.

-------------------------------------------------------------------------------- Blumenthal is a former Fulton Country health officer, and is board-certified in pediatrics and public health and preventive medicine.

 
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