2006 health insurance law could save state millions, report suggests
Rep. Cary Condotta's legislation allowing for HSAs could be part of the budget solution
A recent report published by The Heartland Institute on the success of Indiana's use of Health Savings Accounts (HSA) for state employees has Rep. Cary Condotta wondering why the governor refuses to follow the law and offer the innovative and cost-effective health insurance option for Washington state employees, and taxpayers.
Condotta, R-East Wenatchee, sponsored House Bill 1383 in 2006 as part of his effort to provide more choices and lower the cost of health insurance coverage for state employees. Under the law, signed by Gov. Christine Gregoire, the state is required to offer HSAs to state employees but has yet to do so.
“Clearly, these innovative and flexible health insurance accounts are popular in Indiana. According to the Heartland's report, half of all state employees in Indiana have opted to participate in an HSA,” Condotta said. “By following current law, Washington could save millions of dollars on health insurance premiums for state employees – money that could be used for critical budget items, such as levy equalization.”
The governor's own 2006 report on HSAs estimated the state could save $20 million a year if just 10 percent of state employees enrolled in an HSA plan, he said.
“If Washington follows Indiana, getting a 50 percent participation rate, our state could save $100 million per year,” Condotta added.
HSAs, authorized as part of the Medicare bill signed by President Bush in 2003, are savings accounts individuals and families can use to pay for health care expenses. Employers – in the case of House Bill 1383 in the state of Washington – would offer a lower cost, high deductible health plan coupled with an HSA which the employer or employee could put into a tax-free health savings account.
Employees could then use their accounts to pay out-of-pocket health care costs, including co-pays, deductibles, prescriptions and over-the-counter medications, dental and vision care. Money deposited into an HSA is owned by the employee and can “roll-over” from year to year and would follow the employee if he or she changes jobs.
Condotta believes the issue should be pressed and the governor should follow the law to allow state employees the choice of an HSA.
“State employees would not be required to participate in an HSA, but they would be allowed the option,” Condotta said. “An HSA might fit some employees' needs better and give them the flexibility to use their health care dollars in ways that fit their families' health care situations.”
It is time to put consumers back in the driver's seat when it comes to health care choices, he added.
“Employees own the plan and can take the savings account with them should they leave their jobs,” Condotta explained. “We're talking about real solutions that can cut the curve on rising health insurance costs and provide choice and flexibility to participants. It's time the governor committed to put the law into action.”
The benefits of Health Savings Accounts include:
- Many health insurance plans require patients to choose from a very limited list of health care professionals. An HSA can be used to pay for services and health care professionals not covered by insurance plan;
- Health insurance plans that are coupled with an HSA have lower premiums, and premium savings can be deposited into an HSA to pay for out-of-pocket health care costs;
- They offer an additional retirement savings option;
- Employees experience a tax savings because HSA contributions are tax deductible and earn tax-deferred interest; and
- The list of qualifying medical expenses payable through the HSA system is very broad and includes chiropractic, contact lenses and glasses, dental, psychiatric care and surgery.
For more information, contact: Bobbi Cussins, Public Information Officer: (360) 786-7252
