One
of the great things about Health Savings Accounts (HSAs) is that they
are portable--if you change jobs, you don't necessarily have to change
accounts.
However, the same can't be said for health insurance--HSA-eligible
or any other type. About 65 percent of Americans have employer-provided
coverage, and when they change jobs--almost every five years, on
average--they have to leave one health plan and switch to another.
Many members of Congress would like to see health insurance become more portable, and two have put legislative proposals forward to jump-start the dialogue.
"I
had a great HSA policy from the federal government," recalled a
lobbyist who asked not to be named, at a meeting held by the Coalition
for Affordable Health Coverage (CAHC) in Washington, DC on July 14,
"but my new employer's policy and the banking services for the HSA
account are not as good. I wish I would have had the option to keep the
old policy and financial network."
This is a common
problem. Changing policies often means changing doctors, dentists,
mental health professionals, and other providers. For some families,
this is simply a paperwork irritation, but for others it can involve
difficult choices.
A friend whose son has serious emotional
issues has used the same child psychiatrist for years. Her new health
plan does not include the physician in its provider network, so her
reimbursement from the insurer is now $65 for every $175 visit; before
the change, the reimbursement was "significantly more."
"I can't put my son's wellbeing at risk and change [psychiatrists] every time our plan changes," she said.
Fortunately, she has the resources to pay the difference ... but not everyone does.
Economists
disagree on how big a role health insurance plays in keeping people in
jobs they would rather leave. The Consolidated Omnibus Budget
Reconciliation Act (COBRA) of 1986 aimed to address the "job lock"
problem by requiring some employers to continue offering coverage to
former employees for 18 months after leaving the job. One study of
COBRA reported that if the worker pays 102 percent of the premium in
order to continue on his group policy for 18 months, it reduced job
lock by 40 to 50 percent. COBRA also benefits the worker if his family
health history makes buying individual insurance difficult.
But Tom Miller, senior health economist of Congress' Joint Economic Committee, disagrees that COBRA helps much.
"Contrary
to shallow conventional wisdom, the length of job tenure has not been
decreasing overall," Miller noted. That would suggest health insurance
concerns have created new barriers to job changes, and American society
is not as employment-mobile as many people believe.
As the
Baby Boomers prepare to retire, job lock may become even more
prevalent. People in their 50s and early 60s often experience health
problems and therefore may be more reluctant to make job changes that
could threaten or change their coverage.
This
summer U.S. Sen. Tom Coburn (R-OK) and Rep. Mike Rogers (R-MI)
introduced legislation, S. 3488 and H.R. 5475, to make health insurance
more portable as employees move from job to job.
"As a
practicing physician, Sen. Coburn has personal experience with the
problems in our current health care system and believes strongly that
changes need to be made," Coburn's health policy advisor, Stephanie
Carlton, said at the CAHC meeting. "He is definitely not shy about
putting ideas on the table in order to get the discussion rolling."
S.
3488 addresses two issues. First, individuals who already have
individual insurance policies could keep them when taking jobs with
small or large companies. The employer would be allowed to contribute
the actuarial equivalent of what it is providing to other employees in
group insurance, without subjecting the company to "group insurance"
rules. Meanwhile, the employer would receive the tax deduction for any
contribution made to the employee's individual insurance policy, and
the employee would have a tax deduction for his individual policy
premium payment, both of which are changes from current law. Employees
currently get tax deductions for their premium payments only if they
are made through an employer in a group insurance setting.
The
second circumstance is when individuals with group coverage from their
company that they'd like to keep want to change companies. Current law
prohibits this. Coburn's bill would allow employees to contact the
insurance company providing the group plan and pay an additional fee in
order to convert their group coverage to an individual policy. The law
would allow the carrier to refuse the individual this option.
Although
action on the portability provisions is unlikely this year, many
stakeholders believe putting the proposal on the table is an important
first step.
"Fewer American workers obtain health coverage
from a single employer in today's flexible working environment,"
explained Rogers, who chairs the House Energy and Commerce Subcommittee
on Commerce, Trade, and Consumer Protection. His bill is narrower than
Coburn's, applying only to small employers with two to 50 employees,
and would create portable conditions only for those leaving small group
employers with HSA-eligible policies.
H.R. 5475 addresses
the problems that guaranteed issue creates in the small group market,
by allowing carriers to decline to offer coverage to a small group but
requiring that when they do offer coverage, they agree to offer a
portability provision to existing employees. That provision would
guarantee any individual in a small group with an HSA-eligible plan who
wants to leave the company would be able to convert the coverage to an
individual policy.
When an individual chooses to leave a
company, the carrier must offer guaranteed convertibility, and the
individual's premium cannot increase more than 150 percent.
"We
believe that making this change will draw more of the smaller carriers
into the small group market, giving businesses more options," explained
Kelly Childress, Rogers' legislative assistant. Carriers already in the
small group market will continue to do business just as they do now
under guaranteed issue, but new carriers might be drawn into the small
group market because they would be allowed to decline to cover some
businesses in exchange for the portability provisions for the current
employees of a business they accepted, she said.
Portability
is a deceptively simple concept, but altering existing insurance
regulations is tricky because it could trigger unintended consequences
in the market. But it is definitely a goal worth pursuing, and
congressmen have signaled their intent to do so.
Laura Clay Trueman (ltrueman@jeffersongr.com) is executive director of the Coalition for Affordable Health Coverage and senior director at Jefferson Government Relations.
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