Consumers Lack Key Info for Health Savings Accounts

Most consumers using new health savings accounts do not have access to key information on the price and quality of medical care, according to a survey of major insurance companies.

Supporters of health savings accounts (HSA) say this information is crucial to controlling rising health care costs.

The HSA law allows individuals who buy high-deductible insurance coverage to save money for out-of-pocket health costs in tax-free accounts. The high-deductible insurance plans typically have lower monthly premiums than standard insurance but often require patients to pay thousands of dollars on their own before insurance kicks in.

The survey included major insurance companies that cover 800,000 of the approximately 1.2 million Americans using HSAs.

It shows that more than 55% of insurers offer customers no information on the quality of services provided by covered hospitals or doctors.

Fewer than six in 10 major insurance companies give consumers any information on the expected cost of their medical care.

Supporters of HSAs have suggested that providing this information is crucial to the success of the HSA program. They say consumers who spend their own money on medical expenses -when armed with this information — will be less likely to seek unnecessary care.

"I think the more we give choice to consumers, and the more consumers are allowed to be in the marketplace designing and shopping for products that meet their needs, the more likely it is we'll be able to control costs and make the marketplace work," President Bush said at a National Institutes of Health event promoting HSAs on Jan. 26.

Educating the Consumer

Congress approved HSAs as part of the 2003 Medicare reform law. Since then, the availability of quality information targeted to consumers has shown some improvement, including two new databases designed to offer patients limited information on the quality of local hospital care.

But Wednesday's survey shows that in most cases, insurers selling the high-deductible plans that go along with the accounts offer little detailed information for consumers.

Forty-four percent of 28 major insurers surveyed say they publish no information on patients' probable medical costs. More than half that do provide this information give only market-wide averages without specifics to a particular location.

At the same time, only half of the surveyed insurers tell patients the cost of procedures or treatments in exact dollars, offering instead ranges or averages.

"There's a huge education that needs to go along with these products," says Brent Greenwood, a principal at the Atlanta firm of Reden & Anders Ltd., which conducted the survey for the American Hospital Association and the Federation of American Hospitals.

"If you're going out and buying a car and you have no information at all on prices or options, could you make that decision?" Greenwood says.

Karen Davis, president of the Commonwealth Fund, a nonprofit health policy think tank, says the survey displays "a shocking state of affairs" in the HSA insurance market.

"We're shifting the costs to the patients before we've gotten them the information they need to act in an informed way," Davis tells WebMD. "It's hard to be an informed consumer when you have no information."

But White House officials say the survey suggests that health plans are providing more and more information as consumers buy into HSAs at rising rates.

"If it weren't for HSAs, the level of information would be lower than you see it," says White House spokesman Trent Duffy. "It's a market that is growing and we expect it to continue."

Insurers carrying HSAs and high-deductible insurance strongly support consumers' "right to know" about costs and quality offered by hospitals and doctors, says Mohit Ghose, a spokesman for America's Health Insurance Plans. Contracts with health care providers often restrict insurers from disclosing detailed information, he says.

"It's everyone's responsibility to improve the level of information being made available to consumers," Ghose says.

Davis says insurers deserve credit for trying to provide quality and cost information to consumers but that in most cases detailed information on individual doctors and hospitals does not exist.

By Todd Zwillich, reviewed by Brunilda Nazario, MD

SOURCES: Consumer Directed Insurance Products: Survey Results, Reden & Anders Ltd., April 20, 2005. President George W. Bush. Brent Greenwood, principal, Reden & Anders. Karen Davis, president, The Commonwealth Fund. Trent Duffy, White House spokesman. Mohit Ghose, spokesman, America's Health Insurance Plans.