7.1 percent of Coloradans get health savings plans

To the chagrin of health care providers, a lot of Coloradans have become savvy about health plans that allow them to open taxfree savings accounts to pay for medical expenses.

According to an annual study released Wednesday by America's Health Insurance Plans, Colorado ranks fifth in the nation in the percentage of residents who have enrolled in the plans.

The accounts are attractive for cost savings up to 25 percent on premiums, but they have a downside: They're usually attached to health plans that have out-of-pocket deductibles as high as $10,000. Health care providers say the result is that more patients are unable to pay their medical bills.

More than 6.1 million Americans are covered by health savings account-eligible insurance plans, a 35 percent increase from the 4.5 million enrolled in January 2007, the study shows. That represents about 3.4 percent of the private insurance market, according to America's Health Insurance Plans, a Washington, D.C.-based trade group.

At 7.1 percent, Colorado has the fifth-highest percentage of en rollment among those under 65 who have private health insurance. Minnesota, Louisiana, the District of Columbia and Vermont rank higher. Colorado's total enrollment in health savings plans is 217,906.

Health savings accounts were authorized in January 2004, as a push by the Bush administration to help curb health care costs.

But there is a direct correlation to high-deductible health plans that have the savings account component and an increase in bad debt among service providers such as hospitals, said John Suits, vice president of business development and advocacy for Memorial Health System.

"We have noticed an increase of bad debt accounts for people who have high deductibles, say $2,000 to $2,500, due to the fact they cannot meet their financial responsibility," Suits said.

The average deductible for people employed by large companies who use health savings accounts is $2,000 to $5,000, said Lew Emanuelson, vice president of sales and account management for Anthem Blue Cross and Blue Shield's large-group market in Colorado.

Workers can deposit up to $2,900 into health savings accounts tax-free each year, or up to $5,800 for families. The average account balance in 2007 was about $1,380; the average amount spent from health savings accounts last year was $1,080, according to the study by America's Health Insurance Plans.

Health care providers aren't at the point of fighting these plans, but are trying to adapt to the setup.

"We do hear that some providers are a little distressed, but when a patient comes to them they could better understand the cost sharing before they prescribe the services," Emanuelson said.

Many providers now ask patients to pay their deductible up front, he said, instead of sending patients a bill for the balance due. Suits said city-owned Memorial is "becoming more diligent at collecting on the front end," but accepts all patients regardless of ability to pay.

"We'll always have the possibility of having patients in the system that will have difficulties honoring their financial responsibility," he said. "We also worry about people possibly delaying care due to the fact that they know they cannot afford their portion of the bill."

Anthem is selling more health plans that are paired either with a health savings account, which the individual or employee primarily funds, or a health reimbursement account, which the employer primarily funds, than any other type of health insurance plan, said spokeswoman Sally Vogler.

The so-called consumerdriven health plans account for 20 percent to 25 percent of sales for large companies and 40 percent for small companies and individuals, she said. Anthem has about 35,000 members in El Paso County.

About 15 percent of Colorado employers offered health savings accounts in 2007, and 23 percent considered offering plans with the accounts, according to a recent survey by the Mountain States Employers Council, a nonprofit membership group that assists employers and has an office in Colorado Springs.

One reason for the popularity of health savings accounts is that they allow employees to save for future health expenses using tax-deferred dollars, Vogler said. That money stays with the employee even if he or she changes jobs, and it can be rolled over from year to year.

Colorado residents also like that the plans promote more healthful lifestyles, Emanuelson said. Because plan members are responsible for more out-of-pocket costs, "people look for reasons to make lifestyle changes," he said.

Members who take smoking cessation and weight-loss measures are rewarded with incentives, he said, and preventive care is covered 100 percent. Anthem also provides online support and tools to help people stay healthy.

CONTACT THE WRITER: 636-0235 or debbie.kelley@gazette.com