HSA Roundup

By Greg Scandlen

Fidelity Investments reports substantial growth in its HSA business. In 2010 it added 14 new corporate and 22,000 individual clients, representing a one-year growth rate of 52%. As of February 28, 2011, it held $229 million in HSA assets.

The company found that 17% of its account holders contributed more than $5,000 to their accounts in 2010, and 46% contributed between $2,500 and $5,000. Ninety-five percent carried over a balance from year to year.

Fidelity Press Release

State employees in Wisconsin will likely be put into HSAs as a result of the new budget-repair law.  Currently, 95% of state workers have no deductible whatsoever with the remaining 5% having a deductible of $100.  The average private sector deductible in Wisconsin is $947 for singles and $1,893 for families.  The new law requires the state to do a study by June, 2012, that will likely result in changes in 2013.

Wisconsin Journal Sentinel

Towers Watson conducted an employer survey on behalf of the National Business Group on Health that found, according to an article in HRMorning:

Account-based health plans (ABHPs) — health savings accounts (HSAs) and health reimbursement arrangements (HRAs) are booming, the report said. In 2002, just 2% of all employers offered ABHPs, but by 2011, that number has exploded to 53%. By 2012, another 13% of all respondents plan to add an ABHP.

HR Morning

The Employee Benefit Research Institute (EBRI) put out a new study of HSA and HRA accounts, which, as usual with EBRI, underestimates the market penetration of HSAs. I write this up on the NCPA Blog. EBRI draws its conclusions on total deposits and account growth from an internet survey, while Bill Boyles of the Consumer Driven Market Report (CDMR), and Eric Remjeske of Devenir Investments each tallied similar data by talking to HSA administrators who actually know how much money is in their vaults.

The contrast should be embarrassing to EBRI – if it were capable of being embarrassed.

NCPA’s Health Policy Blog


Mandate Still Not Popular

By Greg Scandlen

A new survey by Harris Interactive finds that the individual mandate is still a loser – only 23% of respondents support it, while 50% oppose it.

Humphrey Taylor, the chairman of the Harris Poll, still tries to spin the results in the most favorable (to Obama) light.  The company press release says:

But certain arguments in favor of the mandate seem to sway opinion back toward support of the measure. For example, 71 percent of the more than 3,000 adults polled in mid-February agreed with the notion that “for health insurance to work, it is necessary to include people who are healthy in order to help pay for those who are sick.”

That seems to suggest that “while the individual mandate is still widely unpopular, indeed by far the most unpopular part of the Affordable Care Act [ACA], some arguments in favor of it are supported by most people,” said Humphrey Taylor, chairman of The Harris Poll Interactive.

No, Mr. Taylor’s conclusion does not follow from the statement above. The statement is absolutely true — “for health insurance to work, it is necessary to include people who are healthy in order to help pay for those who are sick.”  — but that has no bearing whatsoever on the mandate.

Every insurance pool has a mix of many healthy people and a few sick people.  That has always been and always will be the case. No one has to mandate anything for that to happen.

Unlike Mr. Taylor, most Americans are full of good sense. They know that it is good to be insured so that they will be covered when they need it. As with all insurance, we are much happier if we don’t have to use it, but we appreciate the security of having it, just in case.

We have never needed to be mandated to buy it. Even now, only some 15% of the population is uninsured. Pretty good considering how expensive and bureaucratic it is. Make it less expensive and bureaucratic and a whole lot more people will buy it.

By the way, the poll also found only 20% think the law is constitutional, while 50% think it is not.


Right of Contract

By Greg Scandlen

We have learned a lot recently about the Commerce Clause and the transformation that took place in the Roosevelt-era Supreme Court from 1937 to 1945.

Never mind the principal of “stare decisis” that says the courts should respect and uphold previous decisions of the Court. That only seems to apply when there is a conservative nominee who might change the interpretations of previous progressive justices.

When a radical Leftist judge throws out 200 years of established precedent, he (or she) is just enlightened. Once the new radical interpretation has been made, God help any judge who might think it was poorly decided.

Now Reason Magazine reminds us of a similar radical change the Court imposed in 1937 – the complete abandonment of the fundamental and ancient principle of freedom of contract. This says that when two people willingly enter into a voluntary contract, the government’s only role is to enforce the terms of the contract.

In the Reason article Brian Doherty quotes David Mayer’s new book, “Liberty of Contract: Rediscovering a Lost Constitutional Right,” describing the right of contract as:

… a fundamental right, one aspect of the basic right to liberty safeguarded under the Constitution’s due process clauses, which prohibit government—the federal government, under the Fifth Amendment, and states, under the Fourteenth Amendment –from depriving persons of ‘life, liberty, or property without due process of law’…[but] following its ‘New Deal Revolution’ of 1937, it ceased protecting liberty of contract.

In an interview, Mayer explains that prior to 1937 the Court overturned a large number of laws involving such topics as minimum wage, state segregation laws, and laws requiring public school attendance and prohibiting parochial schools. These were tossed, not because the Court found the laws distasteful, but because they violated the freedom of contract.

Mayer argues that the current affection by the courts for “privacy” is too narrow and should really be expanded to freedom of contract. He says,

(T)he modern court’s protection of privacy rights from a libertarian perspective is too narrowly focused on issues about procreation and love. Why is it not equally fundamental to decide how many hours we work or our wage levels? There are all sorts of government regulation of our lives [in the world of business and economics] that interfere with the right to privacy too.

Certainly the current raft of suits over ObamaCare should include a freedom of contract argument. Why should I not be allowed to freely enter into a contract with an insurance company to provide the benefits of my choosing in exchange for willingly paying the premiums it requires.

How is that arrangement any business of the government?