Two recent reports made me doubt my conviction that ObamaCare spells the death of consumer-driven health care (CDHC).
By CDHC, I simply mean restoring health-care dollars to the patients who need them, instead of laundering them through insurers, employers, and government.
Health Savings Accounts, Health Reimbursement Arrangements, and Flexible Spending Arrangements were key tools in CDHC. As Greg Scandlen notes, they are still growing.
Nevertheless, by giving absolute power over the design of health insurance to U.S. Secretary of Health & Human Services Kathleen Sebelius and her assorted Tsars, Tsarinas, and Tsarevitches (to be appointed), ObamaCare surely sounds a death-knell for CDHC. ObamaCare mandates that insurers cover “preventive care”, and imposes regulations on Medical Loss Ratios (MLRs) that surely make low-premium, high-deductible, health insurance impossible.
But then I read a report from TowersWatson, which anticipates that ObamaCare would increase the uptake of CDH plans in the employer-based market. Now I read that well-endowed venture capitalists have invested $60 million in Castlight Health, a firm that uses IT to improve price transparency.
So, what have I got wrong? Maybe nothing: Perhaps employers will simply use Health Savings Accounts as a way for employees to dodge taxes (which are going up, making tax shelters more valuable). Plus, as John Goodman has noted, under ObamaCare, it will only make sense for high-income workers to keep employer-based benefits. So, to avoid discriminating in health benefits for low-income workers, companies will dissolve and reform into companies with high-income workers (who have benefits) and those with low-income workers (who are dumped into “exchanges”). High earners with health benefits will certainly benefit from the tax advantages of HSAs.
But where does the price transparency, which Castlight provides, come in, if insurance plans have to cover preventive care? Beats me. Perhaps they figure that so many people will be outside the exchanges, waiting to apply until after they’ve become sick, that they’ll be willing to use cash payments more frequently while they’re uinsured.