A PRESCRIPTION THAT WORKS: HEALTH SAVINGS ACCOUNTS

Companies are designing health plans that subtly encourage job
applicants who need more health care to seek employment elsewhere,
writes Cheryl Hall of the Dallas Morning News.

Plans attract healthy workers and dissuade those who are sick (or who
are prone to sickness) in a variety of ways:

o New hires must wait longer for medical coverage than
longstanding employees; for example, store-level employees at Wal-
Mart Stores Inc. now have to wait six months (up from three) before
they can get medical help on the company's plan.

o Hospital visits and major surgery come with very high
deductibles.

o Low co-payments for routine check-ups, visits to general
practitioners, and outpatient services.

Some employers even use covert tactics to identify and then dissuade
applicants with chronic illness, telling them that they wouldn't be
happy under the company's health plan.

John Goodman, president of the National Center for Policy Analysis
does not condone the practice, but appreciates it has become a
necessity to stay competitive: "If you're an employer and want a
healthy workforce with as few problems as possible, have a health
plan that is only attractive to healthy people. It is not rocket
science."

Goodman's solution to health care is health savings accounts. These
plans would be similar to 401(k)s: employers would set up and fund
them, but employees would own and keep the policies as they move
through the labor market.

Source: Cheryl Hall, "Health Insurance You Take With You," Dallas
Morning News, March 27, 2005.

For text:
http://www.dallasnews.com/sharedcontent/dws/bus/columnists/chall/stori
es/032705dnbushall.3d507.html

For more on Economic Case for Medical Savings Accounts:
http://www.ncpa.org/iss/hea/