WSJ Says HSA Health Plans Could Reduce Health Costs for Government Workers

Earlier this week, the Wall Street Journal published an editorial piece about the skyrocketing cost of health benefits for government employees. The editorial cites a new study by the Manhattan Institute that shows the growth in health care costs for local and state governments outpacing private insurance by 20% over the past 15 years.

The Wall Street Journal points to consumer-driven health plans, including HSA health plans, as a solution to bring down health care costs for state and local governments. As evidence, the editorial points to the experience of Indiana, which began offering HSA plans to state employees in 2006. According to a Mercer consulting study, consumer-driven plans in 2010 saved as much as $23 million for Indiana taxpayers and an additional $8 million for employees.

Here are a few excerpts from the editorial:

  • "Public employees on average pay 15% of their premiums compared to 25% for their private counterparts. About a dozen states don't require workers to contribute anything."
  • "In the dozen or so states with property tax caps, local governments and school districts are finding savings by modifying their health plans. Other governments will have to do the same to avoid a taxpayer exodus. Mr. Barro [author of the Manhattan Institute study] estimates that governments could save $1,376 per employee merely by realigning premium contributions with those in business."
  • "But a better solution would be to offer consumer-driven plans that encourage workers to use health resources more judiciously since they must pay higher out-of-pocket expenses."
  • "According to Mr. Barro, governments nationwide could cut $20 billion from their $130 billion health-care bills by adding HSAs to their plan options."

Read the editorial in its entirety here (subscription is required).

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