Skinning the ObamaCare Cat with High Deductibles, HSAs, and Self-Insurance


There's more than one way to skin a cat.

English Proverb, of uncertain origin

Employers, faced with increased health costs, secondary to the ObamaCare employer mandate, are seeking ways to empower workers by lowering their health premiums, introducing health savings accounts, and self-insuring. Despite ObamaCare restrictions, high deductible, HSAs, and employer self-insurance plans are growing and are reducing employer health costs by 15% or so.

As many as 100 million Americans are now covered by self-insuring companies, who pay health claims directly and can contract directly with providers. And HSAs, generally paired with high deductibles, increased by 29% in 2014, reaching a record high of 14.5 million. Nearly one third (31%) employers now offer HSAs, up from 4% in 2005.

These new approaches reduce employer spending by 15% or more, and empower consumers by lowering their premiums by as much as 25% to 50% and allow individuals to set aside tax-free money for out-of-pocket expenses and encourages them to set aside money for retirement. Individuals own their HSAs and do not depend on their place of employment. HSAs encourage workers to shop for care since they are using their own money to pay for services up to the level of the deductible. Self-insured employers can contract directly with providers without going through the trouble and expense of going through insurers, often dramatically decreasing employer expenses in the process. Some concierge practices and direct-cash ambulatory care surgery centers now hire middleman to directly contract with employers.

These new approaches are not a panacea for lowering health costs by according to Scott Atlas, MD, and John Cogan, senior fellows at Stanford University’s Hoover Institution, and Mike Ferguson, CEO of the Self-Insurance Institute of America, these approaches lower costs while empowering employers and their workers (“Two Essential Tools for Repairing the ObamaCare Damage,” Sept.2, WSJ, and “Remaking Companies of ObamaCare, “ Sept. 3, WSJ).

I have written 20 blogs on High Deductibles, HSAs, and self-funding or self-insurance. You may read them by going to Medinnovation and Health Reform and typing in High Deductibles, HSAs, and self-insurance into the search box. These concepts are not new, but they are not popular with ObamaCare advocates of employer mandates and ObamaCare health exchange plans.

One hundred million Americans work for companies that self-insure. ObamaCare fans are unhappy about it. It places control in hands of employers and workers.