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LYNN NEARY, host:

This is TALK OF THE NATION. I'm Lynn Neary in Washington. Neal Conan is away.

One of the many proposals that President Bush made in his State of the Union speech last night was an expansion of health savings accounts.

President GEORGE W. BUSH: We will strengthen health savings accounts, making sure individuals and small business employees can buy insurance with the same advantages that people working for big businesses now get.

(Soundbite of applause)

We will do more to make this coverage portable, so workers can switch jobs without having to worry about losing their health insurance.

NEARY: An estimated three million people now use these plans, which the administration believes can change the way Americans think about health care. Unlike traditional health insurance plans, health savings accounts are consumer directed.

The Administration believes if consumers pay more for health care out of their own pockets, it will force them to think more about their health care choices; which doctors to see, which brand of medicines to buy, which procedures to have done. And that, proponents argue, will help bring down the cost of health care.

Opponents say these policies only benefit those who are healthy, and leave the elderly and the chronically ill in a more difficult position. They also say health providers simply don't provide enough information about care quality and prices to allow consumers to make informed decisions.

Later in the show, the President's call for a more civil tone in society, but first, if you have an HSA, how is it working for you? If your employer gave you the option of having an HSA and you refused, we'd like to hear why. Our number here in Washington, 800-989-8255, that's 800-989-TALK. And our email address is talk@npr.org.

Joining us now is NPR's health policy correspondent, Julie Rovner. She's here with me in Studio 3A. So good to have you with us so you can explain all this for us, Julie.

JULIE ROVNER reporting:

I'll try.

NEARY: And let's see if we can start out, if you can give us a thumbnail explanation for HSA's. What are they? Give us a refresher course.

ROVNER: Okay. Health savings accounts are actually, it works in two parts. The health savings account is a piece of a paired unit, and the savings account itself can be, can have money contributed to it by an employer, or by the employee, or by both. And it gets combined with a high deductible health insurance plan, with a deductible of at least 1,000 dollars a year for an individual, $2,000 for a family. I actually guess this year it went up to 1,050 for an individual.

And basically, the way it works is that you get the money, whatever money you put in or your employee puts into that health savings account, you spend for routine care up to that deductible. Once you hit that deductible, then your insurance kicks in, and it shares the cost. And that high deductible health plan can work one of any number of ways; it can be an HMO, or a PPO, or standard insurance. But, the theory is that the first chunk of money you're gonna spend will be your money.

And unlike the flexible savings accounts a lot of us, excuse me, flexible spending accounts a lot of people have now for healthcare, where if you don't use it by the end of the year, you lose it, in this case, it rolls over. And that's the important part, because the theory is if people are spending money that they can keep if they don't spend, they'll spend less of it. They'll go out and make wiser choices.

NEARY: So, the health savings accounts are not themselves a plan, but they're part of a plan? Is that how you would describe it?

ROVNER: That's correct. And in fact, when you say that there's three million people in these plans, there's three million people in plans that are qualified, that they're high deductible health plan qualified to have HSA's. We don't actually know how many of those people are in the HSA's, because, of course, the health insurers don't really run the HSA's, they only run the health plans. So, the health insurers can tell us how many people are in qualified health insurance plans. But they can't tell us how many people actually have those HSA's.

NEARY: The accounts are either held by the individual or by their employer. Is that how it is?

ROVNER: Yes, usually a bank runs them, actually. There's some sort of financial institution. Blue Cross/Blue Shield Association is actually going to start its own bank to try to put this more together. But at this point, it's two separate pieces that work together as a group.

NEARY: So, would you put money into that account on a monthly basis, either from your paycheck, or if you're unemployed, if you had some money, you would put it into that?

ROVNER: You can, or your employer can. Or your employer can put all the money that it's going to put in at the beginning of the year. So, it can work any number of ways. But basically, there is the money, and we should point out this money is tax free, it accrues tax free and it comes out for medical expenses tax free. So there's another large incentive to have that, if you're going to have money build up, to have it build up there. It's sort of a, you can think of it as a 401K for health expenses.

NEARY: Okay. And then, are you paying for an insurance policy as well as putting money into the account?

ROVNER: Yes, you are or the employer is. But the idea is that if you have a very high deductible the premiums will be less, because after all, the insurance isn't going to have to cover the first $1,000 or $2,000 dollars of your claims. So, it'll be a lower premium.

So, employers would have an incentive to do this because they could, theoretically, they would take what they're paying now, buy the less expensive high deductible insurance, and put the remainder into the HSA. Or they could put some of the remainder into the HSA and pocket the difference. Or they could put nothing into the HSA, but let the employee put money into the HSA.

NEARY: So, what would a typical premium be? Do we know, I mean, an average premium, by any chance?

ROVNER: That I'm not sure, because, it, remember, it differs. The premium for, it depends what kind of health insurance. Whether you're, as I say, there are actually, Kaiser is actually doing this, you can actually buy an HMO for a high deductible HMO, or a PPO, which is what most people have, or more traditional insurance. So the premiums are going to vary. But what we do know is that when you go to a higher deductible, you're going to get a lower premium, no matter what kind how, what kind of insurance you're buying.

NEARY: Okay. And we can get to those questions with some of our other guests as well. Let's move on with you, Julie, in terms of what the President really wants Congress to do. He really only mentioned this pretty briefly. I think we expected him to talk about it a little bit more, didn't we?

ROVNER: Yes, I think we did. And a lot of people were surprised, because the run up to this speech, they talked about it quite a lot, and there's been quite a debate the last couple of weeks about what he would propose. And indeed, the speech itself was a little bit obtuse. If you didn't know what he was talking about, I'm not sure you could connect it to what's been discussed.

But the White House did put out a four-page fact sheet last night as the speech came out, that does have a lot of specific proposals in it. Basically, all of which, and they're complicated, and some of them are, you know, incremental, but they would all seek to kind of tilt the market towards encouraging people and encouraging businesses to offer HSA's and high deductible health insurance plans, a variety of new tax incentives, tax credits for low income people.

Now, the President's been offering, been proposing tax credits for low income people for the last five years, but now, according to this fact sheet, those tax credits would only be available if they bought HSA compatible health insurance. So it would basically steer people towards this insurance, really to the exclusion of other types of health insurance.

NEARY: All right, before we move on to more details of this, and some of the pros and cons, just one more political question. Will, is it possible the President decided not to speak in great detail about this because he didn't want to risk what happened, perhaps, with social security last year, when he made this obviously a big part of his domestic policy program and it didn't work? I mean, did he deliberately hold back because of political concerns?

ROVNER: It's hard to wonder whether he deliberately held back. Because, as I said, the run up to this speech was driven by White House aides saying that, you know, this is going to be one the President's big issues this year. It might have been for time reasons, I don't know, I mean, one thing he didn't mention was the Medicare prescription drug benefit which is having difficulties rolling out, as we discussed on this air.

And I think there's a lot of concern by people who are very much in favor of more, of an expansion of HSA's and more market driven healthcare, that the rollout of the drug benefit is not a very good advertisement for market driven healthcare. And that maybe he didn't want to dwell on this too much in the speech.

NEARY: Well, let's turn now to one of our first guests, Grace-Marie Turner. She's president of the Galen Institute, that's a nonprofit research organization that focuses on free-market ideas for health reform. She's also here with us in Studio 3A. Good to have you with us, Grace.

Ms. GRACE-MARIE TURNER (President, Galen Institute): Thank you. It's a pleasure to be here.

NEARY: You are in favor of HSA's, you think they're a good idea. Why?

Ms. TURNER: I think they're a good idea. Basically, health savings accounts are kind of a bribe to get people to purchase health insurance. Forty-five million people don't have healthy insurance, and part of the reason is that they don't qualify for some of the subsidies that people do at either end of the income scale.

If you're poor enough, you're more likely to qualify for Medicaid or the state children's health insurance program. And if you're more affluent, you're more likely to have a good high paying job that comes with health insurance. But 45 million Americans, most of them working, don't have any tax advantage when they purchase health insurance or any subsidies. And health savings accounts are a way of saying, we're going to give you an incentive to put money aside into this savings account dedicated to health care expenditures.

Anything that you don't spend in one year, as Julie very well explained, can roll over to the next year. But you can't get this tax advantage savings account unless you purchase health insurance. And they want a higher deductible health insurance that is going to be less expensive. And a lot people are finding that they can purchase less expensive health insurance policies, have something then left over to put into the savings account to help with routine bills.

eHealth Insurance, which sells a lot of policies online by big companies, found that the nearly two-thirds of HSA purchasers paid less than $100 a month for their health insurance. So, that's starting out to be something very attractive for people.

NEARY: And those are people who were employed by companies that provided the insurance, or they were bought individually?

Ms. TURNER: The early adopters for health savings accounts, they've only been around since 2004, so two years. Where, a lot of them were uninsured. According to one study, 37, 40 percent were previously uninsured. A lot of them individuals, many small companies previous are moving into HSAs.

You're seeing, this year, a lot more big companies. General Motors just started offering health savings accounts. Wal-Mart for example, but it's the early adopters were a lot of individuals then primarily uninsured.

NEARY: Let me ask you about these high deductibles, because we heard a piece of tape at the top of the show that said they could be as high as $10,000 dollars, these deductibles? Is that correct?

Ms. TURNER: Well, people can buy a health insurance policy...

NEARY: Because that sounds like a lot to me.

Ms. TURNER: Yeah, but that's totally people's option, you know. The minimum is $1,000 dollars for an individual, $2,000 for a family. And that's pretty much what you see people, they're more comfortable with the lower deductibles.

The higher deductible health insurance is, of course, going to be a lot cheaper, and that's just really for people who want to make sure if they have a major accident, major illness, that they have coverage for high, very high end expenses. But most people are much more comfortable with $1,000, $2,000, and that's where you're seeing most of the policies, the new deductible.

NEARY: But I think that $100 a month health insurance is usually for deductibles of $5,000 or $7,500 dollars. If you want really cheap health insurance, you're going to have a really big deductible. I mean, the two things are you know, go hand in hand.

ROVNER: Yes, because I can see that as being something that people, would be a big red flag for people if they were thinking that, not only do they have to put money into a savings account, but they might have to pay up to $7,500 in a deductible in a year, I think you're saying.

Ms. TURNER: But that's really people's choice. You know they may say, I don't have any health insurance right now. And if something happened and I had $50,000, $75,000 worth of medical expenses, I'm completely exposed. And it's people making their own decisions, that's really consumer directed healthcare. All right...

NEARY: We're going to continue this discussion about health savings accounts. If you'd like to join it, our number is 800-989-8255. You can send us an email to talk@npr.org. I'm Lynn Neary; it's TALK OF THE NATION from NPR News.

(Soundbite of music)

NEARY: This is TALK OF THE NATION, I'm Lynn Neary in Washington; Neal Conan is away. In his State of the Union address last night, the president promised to do more to strengthen health savings accounts as a way to shift coverage more to individuals, and away from employers.

Today, we're talking about HSAs and how they work. Our guests are NPR Health Policy Correspondent Julie Rovner, and Grace-Marie Turner, President of the Galen Institute, a research organization for health care reform.

And, of course, you are invited to join our discussion. We'd like to hear from you. If you have a health savings account, how is it working for you? Or if you chose not to have one, we'd like to hear why. Give us a call at 800-989-TALK, and our e-mail address is talk@npr.org.

And I just want to follow up, Grace-Marie, on the discussion we were just having before that short break. Because we started to talk about the fact that some people may be very put off by the idea that they have to pay a very high deductible, and at the same time, they're going to be having to put money into a savings account. They may feel they just don't have that kind of money.

Ms. TURNER: Yeah, some people don't have that money, unfortunately, but there are some of the proposals in the president's new budget that we'll be expecting in early February, to help give credits and to give subsidies to people so that they can actually fund their health savings account.

But it's really, I don't think of it as a lot different from current traditional insurance. Right now, you may have a deductible of $250 or $500 dollars that you have to pay before your insurance kicks in.

With a lot of health savings accounts, the employer is putting $500, $750 dollars into the account of money that is being saved from the less expensive health insurance policy, and it just kind of moves that deductible up to the middle. So, you have money to spend on first dollar expenses out of the account. Nobody is looking over your shoulder. You make decisions about which doctors you want to see, whether or not you'd prefer alternative health care rather than a traditional western medicine physician.

And then, you have some exposure in the middle before you're insurance kicks in, and basically, this high deductible health insurance works just like health insurance that we're all used to. You may have responsibility for five percent, ten percent, twenty percent of the bills, and the insurance covers everything after that. So, it's still an insurance policy.

NEARY: So the insurance kicks in...

Ms. TURNER: Sure.

NEARY: ...if you have to go to an emergency room or...

Ms. TURNER: ... you're, yeah you're out of the health savings account at that point.

NEARY: ... you get cancer. Okay.

Ms. TURNER: You're basically in the insurance.

NEARLY: Oh, all right.

Ms. TURNER: Just like before.

NEARY: Okay. All right, that makes it a little more understandable.

All right, let's see if we can get a call now. I think the name is Deja(ph), from Jamestown, New York.

DEJA (caller): The problem I have is, I have four major medical problems that require me to take medication every day. My husband also has a medical condition and he has to take medication every day. And I just can't imagine, on our tight budget, having to pay for all of those ourselves. It would just, it would break us.

Ms. TURNER: Health savings accounts aren't for everybody, and people that have high expenses and predictable expenses may find that a traditional plan or an HMO is more affordable for them, but when Congress passed the legislation creating the authority for Health Savings Accounts, it said, you know, we want to make sure people don't go without their medication, or they don't avoid screening tests that may help find problems sooner rather than later.

So, we're going to allow that to be part of the insurance contract, so that if the medicines that you and your husband are taking are preventing you from having a stroke, having a heart attack, having some other major result of the illness, then that can be covered by the insurance contract. So, that would then be part of the insurance that you're used to, and it still gives you an opportunity to save some money that you may want to some physicians that aren't in your health plan's preferred provider list.

NEARY: But if ultimately, the government policy ends up pushing HSAs, will, and then employer's begin using more HSAs, will that put some people in position of really having no choice but to take this form of health insurance?

NEARY: Some employers are saying, you know, you do have to, they call it full replacement, that you're going to be in a health savings account, or health reimbursement arrangement that, they're sisters, and you don't really have a choice. But the great majority of employers are giving people a choice of deciding whether or not this makes sense for them to have the trade-off of the lower insurance premiums, and more of that money set aside that you have control over, and that you can rollover from year-to-year, save for future healthcare needs, save even to pay the insurance premiums if you find that you lose your job.

And, a basic, another fundamental part of the President's proposal is portability. If you were to lose your job, you lose your health insurance, and people are increasingly frightened of that.

NEARY: Mm-hmm.

Ms. TURNER: Both because of the cost of health insurance, and both because they're less secure about their jobs. So, giving people more sense that I can own this health insurance and take it with me, and I know it's going to be there whatever happens to my job, gives people a lot more security, and that's part of the President's proposal.

Ms. TURNER: Okay, Deja, did that answer your question?

DEJA: Yes, it did. Thank you.

Ms. TURNER: Okay, thanks so much for calling. Well, HSAs have been a divisive issue, not only among legislators, but also among health policy economists who agree that the current health system in the U.S. is wasteful.

Uwe Reinhardt is a Professor of Economics and Public Affairs at Princeton University, and he joins us now from the studios of Aspen Public Radio is Aspen, Colorado.

So good to have you with us today on TALK OF THE NATION.

Professor UWE REINHARDT (Professor of Economics and Public Affairs, Princeton University): My pleasure, pleasure to be here.

Ms. TURNER: Now, I understand that you are not in support of HSAs. Why not? What are your concerns about them?

Prof. REINHARDT: Well, it's not that I am against HSAs as one option of many that Americans can pick, but I have some questions about two features of the President's proposals. First, he would extend these tax privileges only to people who buy the kind of health insurance that he favors. It's a little bit like big daddy telling me what I should do. If he wants to give people the privilege of having out-of-pocket spending, tax deductible, it should be available to anyone, even if they buy a traditional health insurance policy.

I think the Cato Institute, which is a Libertarian right-wing think tank, also is on that wavelength, or on that page with me. So, I don't like the President to dictate to me what kind of insurance I can or cannot buy, or should or shouldn't buy. Secondly, what people overlook, when you make anything tax deductible, then you, given a progressive income tax structure, it is automatic that that thing then becomes cheaper for high income people than for low income people.

To give you a concrete example, if I have a toothache, and I need a root canal, that's about a $1,000 dollars where I live. That'll cost me personally no more than $500-$550 dollars, because money I put into the HSA saves me for every dollar, 45 cents. If I'm a gas station attendant, I'm in a much lower tax bracket. I may pay no federal taxes, but only payroll taxes. I might save only ten to 15 cents for every dollar I put in a HSA.

So, to sum this up, for me getting a root canal and getting rid of this pain would be $550. For the gas station attendant, it would be $800-$900, and I just wonder, as a nation, are we then prepared to tell the world that in our country, healthcare should be cheaper in absolute dollars for rich people than for poor people, but that's what this does.

Ms. TURNER: The other question I have about this, and I wonder if this is one of your concerns as well, and that is the amount of information people actually have about their own healthcare. I mean, the first question you don't ask a doctor, the first question you ask a doctor is not, you know, what are you charging me?

You know, the first interaction with a doctor is that, here's what's bothering me, can you help me out? And usually, you really don't know what it costs until you get the bill, I think and that's part of my problem, and as you were saying, as you were telling about the gas station, I was thinking will the gas station attendant even know he's paying $300 dollars more for a root canal than the wealthy guy?

Prof. REINHARDT: They should know this, but they might not, but this is a question I often ask the proponents of high-deductible policies, because that's what we're really talking about, not HSAs. It's really high deductible policies. How would the prices of physicians manifest themselves to an individual patient? So here I am, I have chest pain. What am I going to do? I call up a group of doctors and say, what is your price for treating chest pain?

The doctor, probably, if you know anything about clinical medicine at all, will say, gee, I couldn't possibly tell you, I don't know what you have, I don't know what tests you need. So, I would then, what? Look up some web site what I might need, and then detail it to him, get a sort of a contract like getting a house built?

I just don't see how that would work, so I believe it is incumbent upon the proponents of high deductible policy to tell us how they imagine the information on quality and prices for individual doctors, and hospitals would actually be available to the average American, particularly to those who are not Web-enabled. Let me remind you, a hospital has a pricelist with 20,000 distinct items in it, and a physician's fee schedule has 9,000 distinct items in it.

NEARY: All right, we need to turn to Grace-Marie Turner to see if she has an answer to, to the problems that you're raising here.

Ms. TURNER: Uwe, I absolutely agree with you that, that it's no better for conservatives to tell people what kind of health insurance they should have, than for progressives to tell people, so I absolutely agree with you that it's a, that there should not, people should have more choice and decide whether or not they want health savings accounts or some other kind of insurance, and be able to get the same tax benefit.

And I also agree with you, Uwe, that the tax deduction is really very skewed to people with higher incomes, and that's one of the reasons that the president did put a tax credit in his proposal.

Still, it's saying, you can only get this credit if you buy a health savings account type insurance package, but right now, we're spending $200 and some billion dollars a year to subsidize employment-based health insurance, and that primarily goes to people who are in upper income brackets, and it's really unconscionable, and it's never a subsidy that we would have designed on purpose, that we're going to, we're going to give billions, hundreds of billions of dollars to the rich to buy all the health insurance that they can possibly convince their employer to purchase, and by the way, if you're working at two jobs, and you're working for Joe's Auto Mechanic, you don't get anything.

It's completely unconscionable. One of the things that this plan is trying to move toward is give people more control over those resources, and equalize some of the tax subsidies.

But Uwe is absolutely right on his third point about consumer information. We've had such a paternalistic health care system developing for the last generation at least, that there's no consumer-friendly information, and doctors basically don't know how much their costs are. And hospital bills are completely incomprehensible, and they often don't know. Somebody recently did a survey, I think, that I sent you by email, Uwe, that the hospitals were asked, how much does it cost to get a cat scan or an MRI here, and it was impossible for many people to even get an answer.

NEARY: Yeah. And I'm just thinking that, even if you moved to this sort of consumer-based health care system, there would have to be a pretty painful transition to sort of break down what you just described, which is the system that exists now, which does make it very difficult to get that information. And before you respond to that, I just want to remind our listeners that you are listening to TALK OF THE NATION from NPR News.

Prof. REINHARDT: Can I say something on the, on the issue of prices? I think in the New Jersey Legislature, they are now debating whether pharmacists should post the prices for the top 50 most commonly purchased drugs on their Web site. And it'll probably be resisted by the pharmacist. You see, this is going to be a very tough battle. Providers and insurers really don't want to share the prices that they hash out with consumers.

The whole supply side of the American health system has been very comfortable to function behind a veil of secrecy. I just published a paper on that, Hospital Pricing Chaos: Behind the Veil of Secrecy. So, it'll be a tough battle, and I believe we should start there first.

Think, for example, the millions of elderly people and younger people who had, for decades, no coverage for prescription drugs. And the argument is always, well, if there were such people, they would cry for information on prices and the market would deliver it. But Grace-Marie, the market never did help the elderly find cheap drugs. No private entrepreneur ever did this. If it ever gets done, it'll be government that'll do it...

NEARY:...All right, let's see, I want to see if we can get...

Prof. REINHARDT:...so I believe government should do that first.

NEARY:...All right. Let's see if we can get a call in here. Anita in Duluth, Minnesota. Go ahead.

ANITA (Caller): Hi, I have an HSA, I've had it probably for about a, for a couple a years, when they first came out. And, as an example, I pay $350 a month to cover me and my two kids. I have a deductible of $5,000, and it's through Blue Cross-Blue Shield, and the advantage is, of course, first of all, is that I only, because I'm a member of Blue Cross-Blue Shield, I get a third, approximately a one-third discount on anything I have done.

But the disadvantage is that, you know, for me, it's an okay process, because I have the money to pay for those out-of-pocket expenses, but I find that I'm very careful, and again, you're talking consumer-driven, so maybe this you would consider a good thing, but for me, I have to consider, you know, I think twice about that mammogram, even though I know I shouldn't be thinking twice. But I think, can I afford it?

And the other thing is budgeting. You really, unless you have that, unless you've, you know, unless you can start out with money, because I don't have a, I'm not working right now, and my husband, you know, we don't have enough money to sock into that HSA savings, you know, plan right up front, so initially, you're taking everything out-of-pocket. I mean, until you get enough money banked in your HSA, you're going to be taking everything out-of-pocket, so you know, you really have to figure that into your monthly budget.

NEARY: All right, Anita, really good point. Thanks so much for calling. I'm going to ask our guests to respond. Julie, did you have a thought?

ROVNER: Yes, this is something that's interesting that wasn't really expected when the HSAs started, because originally, the precursor to these, which were called medical savings accounts, the idea was you would have this MSA, and when you hit the catastrophic threshold, everything would be covered, and so you would be completely on your own, and then you would be completely not on your own, and what's happened instead is that we've seen things like Blue Cross PPOs that have come in and offered plans in conjunction with HSAs, and so when you're spending your own money, you're getting the insurer-negotiated discount during that time.

So, the discussion before about prices has been taken away a little bit, because at least you're getting a discount that someone else has negotiated for you. What's not available, really, and we haven't talked about, is the information on quality.

NEARY: Right.

ROVNER: If you think getting, you know, information on prices is difficult, wait till you try to get comparative information on quality...

NEARY: And how would you even go about doing that? I don't...

ROVNER: Well, there are a number of initiatives, mostly started by employer groups, business groups, who are trying to collect it and measure it, but it's hard to measure, it's hard to compare, there isn't a lot of user-friendly quality data, and again, providers who are resistant on prices are really resistant on quality information.

NEARY: And very interesting to hear what that woman said that she, she thinks twice about going to get something like a mammogram, which for women at a certain point...

ROVNER: Well, but, but she shouldn't, she should look at her insurance contract, because that mammogram should be covered by her insurance.

NEARY: All right. We are going to continue this discussion...

Prof. REINHARDT: But it often...

NEARY: We have to take a short break. We are going to continue this discussion about HSAs when we return. I'm Lynn Neary, it's TALK OF THE NATION from NPR News.

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This is TALK OF THE NATION. I'm Lynn Neary in Washington, Neal Conan is away. Here are the headlines from some of the stories we're following today at NPR News.

The House of Representatives is considering a budget measure that passed the Senate by just a single vote in the fall. It would slow the growth of benefit programs like Medicaid and student loan subsidies. The vote today is seen as a test of Roy Blunt, the acting majority leader, and his ability to get legislation passed.

And more than 160 people were wounded today in a West Bank settlement when thousands of troops in riot gear clashed with stone-throwing Jewish protestors. The violence erupted when troops began dismantling homes.

Details of those stories and others later today on ALL THINGS CONSIDERED from NPR News. Tomorrow on TALK OF THE NATION, a look at immigration and small-town America. Join Neal Conan and guests for a special broadcast from Wausau, Wisconsin, which is home to more than 4,000 Hmong refugees from Southeast Asia. That's tomorrow on TALK OF THE NATION.

Right now, we're wrapping up our conversation on health savings accounts. Our guests are NPR health policy correspondent Julie Rovner, Grace-Marie Turner, president of the Galen Institute for Health Care Reform, and Uwe Reinhardt, professor of economics and public policy at Princeton University.

And Professor Reinhardt, before the break, there was a point that you wanted to make. We had had a call from a, a listener and there was a point that you wanted to make.

Prof. REINHARDT: Yeah, yeah, what struck me in her remarks was she pays $300 dollars, and has a $5000 deductible. I would actually encourage the listener to, if they're Web-enabled, to go to ehealthinsurance.com. It asks you to describe your demography; I usually make myself a 35-year-old woman with three kids under age 10, and it asks for the zip code, I put myself into Texas or L.A., you can do that, and then come up something like 20 different HSA policies. You can compare any four of them.

I've never seen a policy where, for less than $200 a month, that doesn't have a $10,000 deductible, or a $5000 deductible, and then co-insurance on top with a maximum exposure. That policy wouldn't cover maternity care, and for a 35-year-old woman, that is really not so helpful, and it has many other exclusions.

I, I'm really puzzled by the statement Grace-Marie made that so many policies were sold at a premium of less than $100. I wonder, were they just single individuals in absolutely perfect health, or where would you get, or what was the deductible? $20,000? I mean, it's kind of hard for me to imagine, given what I saw on ehealthinsurance.com, and again, I invite the listener to do that.

Ms. TURNER: Uwe, this was ehealthinsurance, ehealthinsurance.com, the study's on their Web site. They surveyed an average of the 6,500 different products that are offered on their site, but you know, the basic concept is, I do think that the health insurance market in this country is really fouled up. And individually-purchased health insurance and small businesses are the ones who take the brunt of many of the problems in our health system.

But I believe that if we begin to push some consumer, consumer power into this health sector, so that people start demanding lower prices, more competition, better choices, that we will begin to see a market responding to people instead of bureaucracies, which we've really had for the last three decades.

NEARY: All right, let's get one more call in here before we have to wrap this up. Jeff in Detroit, Michigan. Jeff, go ahead.

JEFF (Caller): Yes, I don't have an HSA, but previously I had the predecessor, the MSAs, the medical savings plan, and they were a little bit different, because at the end of the year, if you didn't spend all the money you put into it, you lost all of it, so that required you to figure out what you were going to need to spend over the year, or lose your money.

The bigger point, though, was the tax benefit was trivial at best. Even though I was in a fairly high tax bracket at the time, I was calculating it out, and I was saving tens of dollars, not hundreds or thousands.

NEARY: All right, Jeff, thanks for those points. I want to see, we have to wrap this up, so I'm going to get my guests to respond to those points in your question. Thanks so much for calling, Jeff.

And both of you, Uwe and Grace-Marie, were shaking your heads, so perhaps you can explain what your reaction was.

Ms. TURNER: I think the caller was actually in an F, an FSA, a flexible spending account, which is the use-it-or-lose-it, and it's true, you're buying, you're sort of pre-budgeting for health care expenses that aren't covered by your insurance, and it is pre-tax, so he's right. You're saving tens instead of hundreds of dollars. A lot of people do it. The medical savings accounts, which were the precursors to the health savings accounts, did let you roll that money over from year to year, so I imagine that's not what the caller was in.

NEARY: Julie, just before we go, I want to ask you something, and that is, this has been, up until this time, every time I have heard this form of healthcare talked about it, has been described as health savings accounts and not, as Professor Reinhardt describes it, as a high deductible insurance. Which is, there's a reason for that, I would think? Perhaps you could explain it to us?

ROVNER: Oh, I'm sure it's a marketing reason. I mean, it's certainly what's talked about. I wish all the smart people who thought of these would please come up with one phrase that will describe the package, because they really don't work without each other. In fact they, you're not allowed to have an HSA without the high deductible health insurance.

NEARY: So it is really one package, even though they're two different things. We've talked about this, they're two different things, but it is one package.

ROVNER: It's one package.

NEARY: And they're never going to call it a high deductible insurance, medical insurance policy, either politically or for marketing reasons.

ROVNER: Well, and you can have high deductible insurance and not have the HSA. But the reason that, the only thing Congress has done is essentially say we're going to give you some tax advantages if you put some money into a little savings account. And the catch is, you can't have the savings account unless you buy a high deductible health insurance policy.

So really, Congress created health savings accounts, and the catch is you have to get insured in order to get one of them. So that was really, why they're called health savings accounts, because that's what Congress created, but it did say to the catch, you also have to have health insurance if you want to take advantage of his tax break.

NEARY: All right. Thanks very much for that...

Prof. REINHARDT: It really was a marketing gimmick though, there is no question.

NEARY: All right. Well, that's the last word, then. Thanks very much Professor Reinhardt. And thanks to Julie Rovner, NPR health policy correspondent, Grace-Marie Turner, President of the Galen Institute, and Uwe Reinhardt, Professor of Economics and Public Affairs at Princeton University. I think I understand a little bit more about this now, thanks to all of you.

Ms. TURNER: Thank you, Lynn.

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