NCPA - National Center for Policy Analysis


February 16, 2006

High Deductible Health Plans (HDHP) with Health Savings Accounts (HSA) differ from traditional federal employee insurance programs, not only in features, but also in who uses them, says the Government Accountability Office (GAO).

HDHP's generally cover the same features as a traditional plan, but with higher deductibles. The plans also offer information to help the enrollee become more actively involved in health care purchases. HSA's allow tax?free savings into an account that accumulates from year to year. The enrollee may spend their savings on retirement and other expenses.

Last year, the government introduced HDHP/HSAs as an option to their Federal Employees Health Benefits Program (FEHB). The GAO released a comparison evaluation of the new program and the traditional program. Consider:

  • Single and family deductibles, respectively, were $1,100 and $2,200 for the new plan compared to $450 and $900 for the traditional plan.
  • Single and family monthly premiums, respectively were $91 and $208 for the new plan compared to $99 and $243 for the traditional plan.
  • Some 69 percent of the HDHP/HSA enrollees are male.
  • Some 43 percent of the HDHP/HSA enrollees earn over $75,000 per year, while only 23 percent of the traditional enrollees earn over $75,000 per year.
  • The average age was 47 years of age for the new plan and 59 years of age for the traditional plan.

HDHPs still have room to improve on the information that they offer their clients. There was educational information on diseases and procedures, information on deductible balances and HSA balances. However, there were many variances of data on physician and hospital costs and physician and hospital quality among the new programs, says the GAO.

Furthermore, we cannot say if the demographic trends will continue or what these trends suggest, since the program just started, says the GAO.

Source: The Government Accounting Office, "Federal Employees Health Benefits Program: First?Year Experience with High?Deductible Health Plans and Health Savings Accounts," January 2006.

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