MIA In The Healthcare Debate

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31 August 2009
The recent passing of Sen. Edward Kennedy and the imminent opening of the U.S. Congress' Fall legislative session turned my attention back to the healthcare reform debate. Reaching out to my healthcare banking industry contacts and reviewing various healthcare-related web sites, I quickly came to the obvious conclusion that this debate has yet to address some key issues for healthcare banking industry players. The first missing component is actually something I blogged about in May. Congress still has yet to determine sufficient minimal coverage in terms of health plan design. Once such coverage has been defined, the next thing to look out for is something called "actuarial equivalence". Actuarial equivalence is an approach used to measure health plans against each other, using expected average benefit payouts as the comparitive yardstick. If HSA-compliant high deductible health plans (HDHPs) are the actuarial equivalent of the congressionally-defined sufficient minimal coverage, we can expect HSAs to flourish. If not, HSAs will likely wither on the vine... Needless to say, there is a lot of lobbying activity taking place in DC to ensure that HDHPs make the actuarial equivalent cut. A key argument being made is that HSA contributions (especially those provided by employers) should be considered the same as paid out benefits. Another missing element in the healthcare debate is that of wellness behavior. Healthcare reform is squarely predicated upon the rapidly rising cost of healthcare, much of which is behavioral-based. As described in my report Fit To Be Paid: The Dynamics Of The Wellness Reward Market, behavioral-based health problems cost the U.S. economy hundreds of billions of dollars in medical costs, and hundreds of billions of more in lost productivity. However, healthcare reform is proposing scant little to encourage/force behavioral change. Asking Americans to go to the gym, eat less (or heaven forbid) stop smoking may be a political pipe dream. Given this, institutionalizing financial rewards for behavioral change may be an alternative approach which could be supported by healthcare banking. As mentioned in my Fit To Be Paid... report, financial rewards almost always have a positive ROI. Fasten your healthcare banking seatbelts, the Fall promises to be quite the ride...


  • Red,
    If I am interpreting page 29 of H.R. 3200 correctly (see, it refers to an annual limitation of the cost-sharing for the essential benefits package of $5,000 individual/$10,000 family, which seems to imply that HDHPs up to this level are included in the definition of "sufficient minimal coverage", at least in this proposed legislation.

    It all seems soft-as-a-marshmallow, at least until the Senate Finance Committee gets back at it. I agree, it's going to be quite the ride!

  • Jeff,

    Thanks for wading through the House bill details and sharing them. Senator Baucus is promising a start to the mark-up process of the Senate Finance Committee's draft bill by the week of Sep 21. Like you, I'll be staying tuned!

  • [...] One passage of President Obama’s speech (that raised Republican heckles) mentioned that the details still have to be worked out. Some of these details presumably include the definition of minimal sufficient coverage and whether CDH plans such as HDHPs (high-deductible health plans) meet the actuarial equivalency test — something I’ve blogged about before. [...]

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