April 15, 2008
12:00 a.m. Eastern Time
Modest Number Of Uninsured Families Have Sufficient Assets To Cover Cost-Sharing In HSA-Qualified Plans
Health Affairs Web-Exclusive Article Finds That Among Low-Income Households, The Uninsured Have Significantly Fewer Assets Than The Insured
Bethesda, MD -- Relatively few uninsured households have enough financial assets to cover the cost-sharing in consumer-driven health plans tied to health savings accounts (HSAs), according to a new study by Kaiser Family Foundation researchers published today as a Health Affairs Web Exclusive. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.3.w214
Consumer-driven plans generally require enrollees to pay for most health care expenses themselves until they reach the plan’s relatively high deductible. At that point, the plan begins to pay at least some of the costs of additional health care expenses. The plans also permit tax-free contributions to savings accounts that can be used to cover out-of-pocket costs, with unused funds rolling over from one year to the next.
The new study analyzes the asset levels of households with two or more uninsured members in 2004 and compares it to the range of cost-sharing features in HSA-qualified health plans in that year. Assets are an important consideration because low- and moderate-income families might not have adequate income to pay the potentially high cost sharing under these policies and would have to dip into any savings to pay their bills.
The results show that most uninsured households do not have overall financial assets great enough to cover the HSA deductible if they get sick. For example, about one-third (33 percent) of households with at least two uninsured members had gross financial assets of at least $2,000, the minimum deductible for an HSA-qualified family plan in 2004, and only 9 percent had enough of these assets to cover the out-of-pocket maximum ($10,000). These families may have other financial obligations to meet as well.
Overall, the analysis found a sizable gap between the financial assets of insured households compared to those with uninsured members. The gap persisted even among those with relatively low incomes -- up to three times the federal poverty level, which in 2004 was less than $30,000 for a nonelderly adult. Uninsured households in this low-income category had less than half of the median gross financial assets that their insured counterparts did in 2004 ($300 compared to $800).
“Although lower premiums may increase the ability of the uninsured to buy some coverage, high out-of-pocket liability may leave families exposed to costs that they cannot meet,” the authors, Kaiser researchers Paul Jacobs and Gary Claxton, write in the abstract of their article.
The analysis is based on the 2004 Survey of Consumer Finances, a nationally representative household survey conducted by the Federal Reserve Board every three years.
After the embargo lifts, the article by Jacobs and Claxton will be available online at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.3.w214.
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