Practice Management

... And, the problem plagues solo practitioners and attorneys as well.

I recently posted about health insurance being the bane of my existence.  Two things have happened since them.  First, I received a notice in the mail that informs me that my $5,000.00 deductible health insurance policy that has never covered anything is going up $100.00 per month unless I want to increase the deductible to $10,000.00.  I do not.  With the two substantial increases last year in this coverage (one in the normal course of premium increases and one because I turned 50 years old), my policy is approaching where my traditional Blue Cross policy was three years ago when I changed companies for this new plan and supposedly cheaper premiums plan.  (Or course, the traditional Blue Cross policy is probably through the roof).

Second, I received a number of emails from lawyers (most I think much younger and healthy lawyers who just do not get it) informing me that the insurance was my fault because I should switch to a health savings account plan.  The problem is that I have a health savings account plan from a major carrier.

Now I see where The Dallas Morning News and its reporter Jason Roberson have published an article stating that health savings accounts have not caught on.

Duh!

My point with changing policies to a health savings account (HSA) as the latest "free market" cure to my spiraling health care costs is that HSAs are nothing but a scam to give more money to insurance companies and the rich.  Of course I am neither.

I think that what we have to remember is that health savings accounts, by definition, favor the wealthy and the healthy. For those that never go to the doctor, or who can afford the high out-of-pocket costs incurred (you need to pay $1,050 as an individual or $2,100 for a family before your insurance will cover the rest), HSAs look like a game worth playing. Wealthy-healthy individuals can put a money away, tax free, into their HSA and then draw from it to pay their astronomical out-of-pocket costs when they decide to go see a doctor. After all, if you are healthy, you do not have to go to the doctor very often.  And, if you are wealthy, who cares if it happens very often, you can afford it.  But, for the rest of us HSAs do not work.  If you are a self -employed attorney or with a small firm it does not help much either. 

If we get sick and see the doctor often (which, by the way, happens when you have a number of children, get older or have some type of ongoing illness) we have to pay those huge costs often; that means we have to save a lot of money in that HSA. For those on fixed incomes, or even those just barely scraping by, like new attorneys or attorneys just starting their own practice, putting away even $4,000 in a HSA is out of the question.

Also, HSA do not  work for the same reason tax credits do not work -- those who do not have a lot of cash to save, and who probably pay little or nothing in taxes, are forced to put away money they do not have.  Even if they get the tax credit they do not get it until end of the year.

My biggest concern, however, is that it is really not insurance at all.  It literally does not pay anything unless there is a catastrophic problem like a heart attack, cancer or a stroke.  This will likely, at least temporarily, disable the solo or small firm attorney from making money to pay the insurance premiums, and he or she will lose the coverage when he or she needs it most.  So what if the attorney managed to save a couple grand in an HSA?

The concept, at least at the beginning, was that these HSA policies would be terribly cheap given the deductible and given that no real coverage is provided unless a catastrophic event happened.  At least in my case (and I doubt I am alone), that is no longer true as well.  The insurance companies want more profit.  They raise rates now that we are hooked in, and now we can no more afford the policy if our earnings are interrupted, not to mention we do not have the cash flow to replace the money being removed from the HSA.

In short, if you get seriously ill and cannot earn money well, then all of the premiums paid are for naught because ongoing coverage would not last long.

The Dallas Morning news reports that only 5% of the 114 million Americans covered at work are opting for such health plans, their future is in question. In Texas, which is the birthplace of the HSA, only 387,000 people have signed up out of the 12 million with employer-provided insurance.  And, the critics of such HSA plans state that these plans benefit only the healthy-wealthy with sick patients, who cannot afford deductibles of more than $2,000, doing without care.

The paper notes that despite the tax benefits, patients have not been enamored of the trade-off. Few have signed on at companies now offering HSA plans as a new option, according to the Commonwealth Fund, a private New York City foundation focusing on the nation's health care system.

As well, the paper reports that Stacy Pogue, a policy analyst at the Center for Public Policy Priorities, an Austin-based advocacy group, argues that HSAs favor healthy people, who don't worry about a deductible, and the rich, who have the money for a big deductible and like the tax incentives.  In fact, a May report from the Government Accountability Office found that taxpayers with health savings accounts averaged an adjusted gross income of $139,000 in 2005 vs. $57,000 for other filers.

What got to me in the article is the arrogance of these people in favor of HSAs.  For example, John Goodman, president of the National Center for Policy Analysis in Dallas, considered really the "father" of the health savings account stated, "If a mother wakes up in the middle of the night with a sick child, we want her to think about the cost of the emergency room visit."

What the ...??

How freakin' inhumane is that statement?

Think about that statement again, Mr. Goodman, the spokesman for the HSA industry, who helped push the concept through the friendly Bush White House and Republican Congress,  wants mothers with sick kids thinking about how much money is in their bank account instead of the health of their child.

As a parent, as a solo attorney, I believe that when a child is sick, the ONLY thing that should be on a parent's mind is healing and comforting of the child.  Parents should consult their doctor, not their check book.  And, Mr. Goodman and his ilk can go to hell!

Further, as a solo attorney or a member of a small firm on which your staff, and your family must depend for their very survival, when you become ill, like having chest pains, you are told to consult your pocket book, despite the premiums you have paid, to see if you can afford, at that particular moment, to visit a doctor or the emergency room.

What HSAs do is allow insurance companies keep more money, they offer tax shelters for the wealthy, while hard working people, including attorneys, are forced to pay even more out of pocket, and parents are forced to check their bank accounts before seeking medical attention.

As we say down here in Texas, "get a rope".  We need to string some of these insurance people and lobbyist up.