Language Matters: The Case of Defined Contributions, High Deductibles, Vouchers, HSAs, and HRAs

Then you should say what you mean," the March Hare went on.
"I do, " Alice hastily replied; "at least I mean what I say, that's the same thing, you know."
"Not the same thing a bit!" said the Hatter. "Why, you might just as well say that "I see what I eat" is the same thing as "I eat what I see!"
Alice in Wonderland

October 27, 2011 - Small and large businesses are shifting at least 30% of their employees to high deductible plans, HSAs, and HRAs.
At the same time, policy makers on the right are talking about “defined contributions” for Medicare and Medicaid. Paul Ryan, the Republican Congressman from Wisconsin, has the audacity to suggest Medicare recipients be put on “vouchers,” what they eat after government entitlements, they have to pay for.

All of these things, no matter what the wording, involve shifting costs and decision making to patients and away from government and employers.

The intent of the shift is to sensitive patients, or if you prefer, health care consumers, to true cost of care, to give them “skin in the game” so they will be more prudent in spending their health care money.

Underlying this shift is the realization that the U.S. can no longer afford unlimited government entitlement programs or private first dollar coverage.

But different words have different meanings to different political constituencies. To those on the left, use of the words “voucher” and “defined contributions are no-no’s. Their use implies that patients, not government, possess the wisdom and knowledge to make their own decisions and leaves government-dependents open to market abuses.

To those on the right, these various terms mean freedom to choose and the exercise of individual liberties.

I won’t take a position on who is right and who is wrong, or on whether patient decisions should be left to the left or to the right.

But I do know this.

• According to the October 26 Kaiser Health News,

“Health plan deductibles keep inching up.

When employees sign up for coverage this fall during their company’s annual enrollment period, nearly a quarter will face annual deductibles of at least $1,000, according to a recent employer survey by the Kaiser Family Foundation.

At small companies, the high-deductible option, often served with a tax-preferred savings account, may be the only choice. But larger firms are more likely to offer at least one traditional PPO or HMO plan alongside a high-deductible choice.”

• American Health Insurance Plan census data in 2011, shows the number of people in Health Savings/High Deductible plans grew to 11.4 million, up from 10 million in 2010, 8 million in 2009, and 6 million in 2008.

Apparently, more employers and more consumers (at least those given a choice) have decided Health Savings Account (HSA) Plans are not just health insurance. They are lower-cost, high-deductible insurance plans, potential tax deductions, and savings accounts with investment opportunities similar to IRAs and Roth accounts.

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