The Most Wonderful Time Of The Year

For our U.S. readers, most of you have begun (or are about to begin) your healthcare enrollment process. Once again, we will have to face the daunting task of trying to understand the myriad of complex benefit designs among the differing health plan options offered by our employers. The whole process is as fun as, well, a gall bladder operation. This time of the year has a special meaning for the healthcare banking industry. It is the brief period of time after most product development & marketing efforts have taken place, and when attention is turned to how many employees/consumers sign up for high-deductible health plans (HDHPs). Of course, HDHP enrollment is the leading driver of HSA growth, so HDHP numbers provide a pretty good clue about the direction of the HSA business. For the near-term, the healthcare banking industry just received some good news -- General Motors (GM) will only offer HDHPs to its 24,000 salaried employees for the 2010 plan year. GM's decision is likely a bellweather for a shift among large, iconic employers -- more and more will move from offering HDHPs as an option, to offering HDHPs exclusively. This should come as no surprise, as employers are expecting health care costs to go up by 6% in 2010 and HDHPs usually come with lower costs to employers. As explained in Celent's report, HSA Acquisitions: Hare-Like Market, Tortoise-Like Dedication, we expect HDHPs to grow by about 25% in 2010 over 2009. An important question is whether or not the near-term will impact the long-term, especially in the context of health care reform. As I've written in the past, a key indicator to watch is Congress' definition of minimally-sufficient coverage. Right now, the Senate's default definition is that health plans must cover a minimum 66% of the average person's healthcare costs. It is generally felt that an HDHP (excluding contributions) would only cover 60% of average healthcare costs. As such, HDHPs don't meet the definition threshold and are under some threat. At the same time, in his keynote healthcare address to Congress last month, President Obama promised that, "...nothing in this (healthcare reform) plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: Nothing in our plan requires you to change what you have." Before signing any bill that could potential diminish the role of HDHPs, President Obama now has 24,000 more people to consider.