Why Are Labor Unions Afraid of HSAs?

John McCain HeadshotI know this is an election year.  The political nonsense is everywhere.

Here is yet another article full of unsubstantiated threats:

McCain endorses health care rip-off

The AFL-CIO’s criticism of the position McCain took on State Children’s Health Insurance Program (SCHIP) is interesting.  SCHIP is supposed to provide additional government funded (Medicaid) health insurance for the poor, right?

Then how come the definition of “poor” could be up to $62,000 of annual household income?  This would have required already short state budgets to fund Medicaid well into middle-income earning families.  It would have also ended up moving a tremendous number of privately insured children into Medicaid.  “Why pay for it if the state offers it for free?”  Most states couldn’t afford to match the federal funding requirement in the SCHIP bill anyway.  I can’t blame McCain for voting against it.  That was bad legislation.

This is the part of the Peoples Weekly World article that I need someone to explain to me…

How can AFL-CIO Political Action Director Karen Ackerman claim, “that employers would use these individual medical savings accounts as an excuse to dump health care plans workers fought for decades to win..”?

You can’t have an HSA without being covered by a health insurance plan!

I know of many people that thought they had good health insurance because their deductible was low.  The insurance deductible is only part of the “out-of-pocket” equation. There are actually three moving parts, the deductible, co-insurance (the 80/20 part) and, of course, co-pays.  Most health insurance policies don’t count co-pays towards the “out-of-pocket maximum”.  If there is a cancer or serious heart issue or organ transplant you can plan on paying thousands of dollars in co-pays in excess of your “out-of-pocket maximum” deductible and co-insurance.  These co-pay plans shouldn’t be able to use the words “out-of-pocket maximum”.

My last blog, “Do Co-Pays Really Make Sense???” speaks on this issue further.  HSA qualified health insurance plans when implemented properly offer both healthy people and high utilizers excellent value.

Have any of you Union employees been unfortunate to have suffered through a life threatening incident such as cancer or an organ transplant?  How much total medical expenses did you have to pay including all co-pays.  Would you rather have had an insurance plan like the City of Iola, KS (way to go Judy!)?  They have a $1500 deductible 100% comprehensive major medical health insurance plan that saves the city enough premiums to fund each employee with $700 per year into their HSA.  Do the math: $1500 – $700 = TERRIFIC HEALTH INSURANCE PLAN!

And for the employees that don’t spend their $700 HSA, they keep it!

Go to Blue Cross, Coventry, Aetna, Cigna, Humana, United Health Care, or any other health insurance company and tell them you want to purchase a health insurance plan that has a total out-of-pocket risk in any calendar year of $800 including all inpatient, outpatient, testing, prescription drugs, EVERYTHING!

You can’t buy a better health insurance plan than a properly designed and funded HSA plan.

So why do HSAs seem to upset Labor Unions?  I fail to believe it has anything to do with the HSA itself.  It has to be politically motivated, because financially, HSAs make sense.

General Motors and Ford spend more money on health insurance per car than they spend on steel.  This huge expense has allowed Toyota to surpass GM as the largest auto manufacturer in the world.  GM had owned that spot for 75 years.  Unfortunately trying to hang on to old inefficient health insurance plans will keep GM out of the top spot.  Labor Unions need better quality health care that costs less.

Hey GM, CALL ME!!

Car Signage - Finally Health Insurance that makes $en$e

The HSA GUY… Scott Borden

2010 UPDATE:  Hoosiers and Health Savings Accounts article in WSJ talks about the results of HSAs in Indiana:

“The state is saving, too. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of our high HSA enrollment. Mercer calculates the state’s total costs are being reduced by 11% solely due to the HSA option.”