MA Goes For Top-down Health Care Policies

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Even as “Massachusetts Health Care 2.0” legislation moves to the Governor’s desk for signing, and with it the heavy hand of top-down control of price growth, supply (through the Determination of Need process), consolidation of community hospitals (which will exacerbate the hold of major providers like Partners), and hundreds of millions in new fees (no, no, these fees will not get passed onto consumers…), a very different path is taking hold around the rest of the country.

Health Savings Accounts (HSAs), as Greg Scandlen points out, just keep growing in popularity. He cites a survey of America’s Health Insurance Plans (AHIP), which shows that HSA enrollment keeps growing at a rate of about 2 million individuals per year. In just 7 years, the number of HSAs sold on the market has reached 13.5 million, with annual growth reaching just shy of 20%. And these numbers exclude enrollment in Health Retirement Accounts and other stand-alone high-deductible plans.

Scandlen makes three additional points:

(1) HSA growth is occurring in the “large group category, which suggests that large employers are not waiting around to see what happens with the Affordable Care Act.”
(2) State-level data show that strong enrollment growth is occurring in states that lean both to the right and the left, with Vermont, Minnesota, Montana, Utah and Connecticut leading other states (in that order, all of the states having enrollments above 10% of the overall market). The bottom five states also have equally diversified political leanings (Hawaii, Alabama, Mississippi, West Virginia, New Mexico all have HAS enrollments below 2%).
(3) Finally, Scandlen points out that the usual talking point for those who support Massachusetts-style top-down approaches rather than engaging individuals in their health care choices, which is that HSAs fly in low-cost states and not high-cost states, is countered by data on average premiums. AHIP calculates average premiums for singles (not families). According to AHIP, New Hampshire ($467) now has the highest average monthly premiums, followed by Massachusetts ($453), Rhode Island, Connecticut, and California ($422). The lowest cost states are South Dakota($206), Iowa, Maryland, Minnesota and Michigan ($277). In both Connecticut (high-cost) and Minnesota (low-cost), HSAs have gained significant market share.

In Massachusetts, HSAs have somewhere around 3% market share. A great study would look at how and why Connecticut has seen growth in HSAs, and the impact on cost and clinical care.