Health Care Conversion

November 12, 2009

It’s benefit enrollment time at work.  High deductible insurance policies coupled with a health savings account is all the rage. 

Incentives matter.  They matter a lot.  I can’t tell you the number of people who don’t believe that.  They don’t see it.  They don’t seem to understand just how much incentives matter and yet many of the decisions they make are driven by the incentives they face, and yet they don’t realize it.

The company has been changing the incentives on its health plans over the last few years to make the high deductible policies more attractive.  It’s a cube by cube battle to show the explicit benefits.  Homemade Excel models are being shared, people are giving impromptu lessons on the merits of the plan. 

In the end, seeing that a high deductible plan leaves you with more money in your pocket at every level of projected medical expenses and allows you to save up some health funds that you can own and take with is a big mind changer.  I love things that can sell themselves.

The implicit benefits for everyone aren’t as well understood.  As more of the medical payments are shifted back to first parties (that is, the person who uses the service writes the check for it) under the high deductible plans, we’ll all experience better and cheaper health care. 

Unfortunately, we may not get that chance to see these benefits before the tide shifts back toward third party payments based on health care reform being considered in DC.

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