The editors of MBlog (The Medical Banking Blog) caught up with Roy Ramthun, a man who seems busier these days than when he was an economic advisor to President Bush, to find out what he is doing today.
1. Roy, what is HSA Consulting Services and how are things going for you?
Things are going well. I started HSA Consulting Services to focus on Health Savings Accounts (HSAs) and consumer-driven health care issues. We are trying to make sure every American knows about the opportunities HSAs present and assist them with implementing an HSA program or benefit plan at their company or financial institution. We also help connect people with professionals who can help you find qualified health insurance or account services.
2. If you had a single, crisp message about how CDH could impact healthcare what would it be?
CDH gives patients a financial reason to care about whether they are getting good value for their health care dollar. People spend their own money differently than someone else’s money, and the CDH experience is showing that the same applies in health care. As patients and consumers become better equipped with information, the decisions they make about their own health care will revolutionize how health care is delivered and financed.
3. Do you think the stakeholders are aligned to make CDH a reality or is more work required in this area?
I believe more work is required. Most people have not experienced or participated in a CDH plan so it will take some time to align all the stakeholders to where they need to be. After we see about 10% penetration by CDH plans, things will happen much more quickly.
4. In your view, what can banks do to improve healthcare?
Banks bring a different mindset to the financial transactions behind health care, one of simplicity and transparency. The ATM machine revolutionized banking in this country and we are now use to simple, concise monthly bank statements for our accounts. Compare that to most claim processes for health insurance today, some of which are incomprehensible. Banks also offer an alternative mechanism for providing financial protection which help remind us exactly what insurance is.
5. Roy, we asked BearingPoint to come up with marketplace questions. What is your current thinking about:
— What do you think will be the impact to the financial institutions (FIs) of the Medicare MSA pilots? Do you think that many of FIs are fully aware that with these accounts, it is the carrier that chooses the bank?
I don’t think most FIs are aware of these plans, but this is the first year they are being offered to Medicare beneficiaries and only 2 companies are offering plans in 39 states plus the District of Columbia. While the carrier chooses the bank, the senior can also transfer their funds to another institution. The greatest opportunity will be for institutions that have customers that already have an HSA when they enroll in Medicare in the future. These customers will be looking for FIs that can handle both their accounts and manage their assets.
— What do you think will be the impact of the December 06 HSA legislation as to the speed of the points below?
a. HSA enrollment levels by individuals
The combination of employer funding flexibility, higher contribution limits, FSA and HRA and IRA rollovers dramatically increase the likelihood of enrollment by individuals. All these provisions help remove the uncertainty about switching to an HSA from a traditional plan.
b. Offering of HDHP/HSAs by employers, especially with the new flexibility in contributions across the employee base
Another huge benefit. This gives employers an additional tool to increase adoption by helping fund the accounts of lower-income workers who might be most afraid of the high deductible plans. Now, if the employer can fully fund their account, they have nothing to lose and could definitely be much better off than under a traditional plan. And finally, for employers that have been offering HRAs and now want to switch to HSAs, they can roll over these funds to their employees’ HSA accounts going forward.
c. Levels of funding in individuals’ HSAs
The increased contribution limits are HUGE. I will now be able to much more quickly build up a balance that rolls over and offers me investment opportunity. The fact that you also don’t have to have the highest deductible plan to make the maximum contribution helps, too. However, it also means I can increase my deductible over time and lower my premium even further.
— What do you think is the likelihood passage of some of Bush’s new proposals:
a. Tax treatment of health benefits above/below $15,000 (family)?
While it is the right policy, the single payor advocates and labor unions are adamantly opposed. They have more friends in Congress right now, which creates challenges for getting a bill to the President for signature. I fear the current Congress would rather talk about the issue and take their chances on the outcome of the 2008 elections.
b. Raise HSA contribution limits?
A reasonable policy change would be to increase contributions to the out-of-pocket limits for HSA-qualified plans, as the President has proposed. But the current leaders in Congress have other priorities they would like to spend money on first.