Statement of Karen Ignagni, President and Chief Executive Officer, America’s Health Insurance Plans

Testimony Before the House Committee on Ways and Means

June 28, 2006

I.          INTRODUCTION

Good morning, Chairman Thomas, Ranking Member Rangel, and members of the committee.  I am Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), which is the national association representing nearly 1,300 health insurance plans providing coverage to more than 200 million Americans.  Our members offer a broad range of innovative health insurance products, including high-deductible health plans (HDHPs) that are compatible with Health Savings Accounts (HSAs).     

We appreciate this opportunity to testify on HSAs and their role in providing more Americans with access to high quality, affordable health care coverage that includes benefits for preventive care.  We applaud Congress for authorizing this important new health care option as part of the Medicare Modernization Act of 2003 (MMA).  Today, just three short years later, more than 3 million Americans are covered by HSA-compatible health plans.  This innovative approach to health care financing is helping a substantial number of previously uninsured consumers purchase coverage, accumulate savings for their future medical needs, and access preventive health care services. 

Our testimony today will focus on: 

• the rationale for HSAs and their value as an option for consumers;   
• consumers’ initial experience with HSAs and HDHPs;
• opportunities for enacting legislation to further improve HSAs; and
• the need for greater transparency in health care prices and quality to help HSA account-holders and other consumers make informed health care decisions. 

II.        THE RATIONALE FOR HSAs 

While HSAs are commonly recognized as accounts that consumers establish in combination with high-deductible health plans, it also is important to emphasize that access to preventive care is a central component of this approach.  The MMA addressed this priority by specifically providing that preventive care services may be covered by HSA-compatible health plans and do not count against an individual’s deductible.  As a result, consumers who establish HSAs are covered on “day one” for a wide range of preventive health care services:

• routine prenatal and well-child care;
• immunizations for children and adults;
• periodic health evaluations, including tests and diagnostic procedures ordered with annual physicals;
• smoking cessation programs;
• obesity weight-loss programs;
• screening services for mammography, glaucoma, tuberculosis, etc.; and
• limited categories of medications that serve as preventive measures. 

Along with this strong focus on wellness, HSAs also include an opportunity for consumers to take an active role in deciding when and how much to contribute to their accounts (subject to an allowable maximum) and how to invest the dollars in their accounts.  The funds that individuals withdraw from their HSAs to pay out-of-pocket health care costs are not subject to taxation.  At the end of the year, any unspent funds in an HSA remain in the account and can be used to pay medical expenses in following years.  Interest and other earnings on HSA funds accumulate in the fund and are also tax-free.  This approach to health care financing creates incentives for consumers to make decisions about their health care while at the same time allowing them to accumulate assets to meet their future needs. 

III.       CONSUMERS’ INITIAL EXPERIENCE WITH HSAs   

To learn more about consumers’ experiences with HSAs, AHIP has conducted a comprehensive census of the HSA market three times in the past 21 months – in September 2004, in March 2005, and in January 2006.  The most recent census[1] was based on responses from 96 AHIP member companies, representing nearly all health insurance plans offering HSA-compatible policies.  This includes 53 companies offering plans in the individual market and 87 companies offering plans in the group market.  

We found that HSA-compatible HDHPs covered 3,168,000 people in January 2006.  This reflects a more than three-fold increase in enrollment in HSA products since March 2005.  This represents a strong start for a new health care option that was unknown to most Americans just a few years ago.  By comparison, a previous effort to encourage health care spending accounts – the Medical Savings Accounts (MSA) demonstration program that Congress authorized in 1996 – resulted in only 250,000 consumers establishing MSA accounts from 1997 through 2001.  While our census did not count the number of HDHP policyholders who have established HSAs, the Government Accountability Office (GAO) has reported[2] that approximately 50 to 60 percent of people with HSA-compatible plans have established accounts. 

A closer look at AHIP’s census data reveals a number of significant findings: 

• Many consumers choosing HSA/HDHP coverage were uninsured before choosing this option.  In the individual market, 31 percent of enrollees previously were uninsured.  In the small group market, 33 percent of the companies offering HSA/HDHP coverage previously did not offer insurance coverage.  This indicates that these options are achieving success in expanding coverage to the uninsured. 
• The age distribution of people choosing HSA/HDHP coverage is evenly divided.  In the individual market, 50 percent of enrollees (including dependents) were age 40 or older.  In both the small group and large group markets, approximately 45 percent were age 40 or older. 
• People who choose HSA/HDHP coverage have broad access to providers, much the same as persons with other types of health insurance.  More than 90 percent of enrollees with HSA/HDHP coverage are enrolled in preferred provider organizations (PPO) that include both in-network and out-of-network coverage.  Consumers with PPO coverage have access to the discounts these plans negotiate with health care providers, which allows them to keep their out-of-pocket costs low both before and after they reach the deductible under their HDHP.     
• HSA/HDHP coverage accounts for a notable share of new health insurance in the individual market (23 percent), in the small group market (11 percent), and in the large group market (7 percent). 
• The fastest growing market for HSA/HDHP coverage is group coverage, which has increased from approximately 20 percent of the HSA/HDHP market in September 2004 to more than 60 percent in January 2006.  This growth indicates strong employer interest in offering HSAs as an option for workers. 
• Premiums for HSA-compatible plans are approximately 20 to 30 percent lower than average premiums in the employer market.  The tables on the following page show the average annual premium for both single and family coverage for HSA-compatible plans in the individual, small group, and large group markets. 

Additional research findings have demonstrated that HSAs are having a favorable impact on patient health and helping consumers to make cost-effective decisions.  An analysis by Cigna[3] found that preventive care visits for members of its Choice Fund, an HSA product, were 13 percent greater when compared to other health care consumers.  Choice Fund members also were found to be more consistent in refilling medications that manage chronic conditions.  Other findings of this analysis show that the use of cost-effective generic prescription drugs increased 19 percent among Choice Fund members and that overall pharmacy costs were 5 percent lower than for members with traditional health coverage. 

Two other studies – one by the Employee Benefit Research Institute (EBRI), another by the Blue Cross Blue Shield Association (BCBSA) – have demonstrated that the health status of individuals with HSAs is comparable to the health status of those with other types of coverage.  The EBRI study[4] found that 86 percent of individuals with HDHPs and 87 percent of individuals with non-HDHP coverage reported their own health status as very good or good.  The BCBSA study[5] yielded similar results, with 77 percent of individuals in both categories – those with HDHP coverage and those with non-HDHP coverage – describing their health status as very good or good. 

The EBRI study also found that the income distribution is fairly similar for persons with HDHP coverage and with other types of coverage.  According to EBRI, 31 percent of HDHP enrollees and 27 percent of non-HDHP enrollees have annual household incomes below $50,000.  Similarly, Assurant Health found that 29 percent of enrollees in its HDHPs have annual household incomes below $50,000.  Other data[6] from Assurant indicate that 43 percent of HDHP applicants did not have prior health coverage and, additionally, that 69 percent of HDHP purchasers are families with children and 62 percent are over the age of 40.    

Consumer Information at HealthDecisions.org

Consumers interested in learning more about HSAs and HDHPs can visit AHIP’s consumer-directed portal – HealthDecisions.org – which provides a national directory of health insurance plans.  This site enables visitors to easily locate profiles of HDHP products in their state.  The health plan information on this site is updated and re-verified on an ongoing basis by the health plans themselves, thus ensuring that consumers have access to most current, accurate, and complete information. 

HealthDecisions also contains a wealth of easy-to-understand information in its “Learning Center,” including educational materials, an online library, and a glossary to help consumers and small businesses better understand available HSA options.  Visitors to the site also will find our HSA “Basics” and “Fast Facts” sections and can browse our “Question and Answer” section outlining the most frequently asked questions accumulated over time by the Treasury Department and other sources.  HealthDecisions.org is being visited each month by 20,000 to 30,000 people who are interested in learning more about HSAs and other types of health insurance.   

IV.       OPPORTUNITIES FOR FURTHER IMPROVING HSAs

While HSAs are proving to be highly effective in helping many consumers meet their health care needs, there are a number of additional steps Congress could take.  AHIP is recommending the following proposals to address the unique needs and circumstances of the chronically ill, early retirees, low-income persons, individuals without employer-based coverage, and many others for whom HSAs can be a valuable coverage option. 

Expanding Coverage for the Chronically Ill

• Increase HSA Contributions:  Congress should allow employers to assist employees or their family members who suffer from chronic conditions by permitting increased contributions into the HSAs of individuals who are enrolled in disease management or care coordination programs.  These programs provide coordinated health care interventions and communications for populations in which patient self-care efforts are significant and are used to improve the health of individuals with chronic conditions such as diabetes, hypertension, chronic heart disease, and obesity.  This proposal will help patients with chronic conditions use after-tax money in their HSAs to pay for health care costs.
• Prescription Drugs:  High-deductible health plans should be allowed to cover certain prescription drugs used to treat chronic conditions without the patient first being required to satisfy the minimum annual deductible on the HDHP.  Currently, HDHPs may not cover prescription drugs unless the annual deductible has been satisfied or the prescription drug is used for a narrow category of preventive services.  This proposal will help patients with acute illness or injuries access prescription drugs and assure that they do not forego their medications due to cost concerns.

Encouraging Families to Participate in HSAs

• Spousal FSAs:  Individuals should be allowed to establish an HSA if their spouse has a Flexible Spending Arrangement (FSA).  Individuals currently are disqualified from setting up an HSA if they have a spouse with an FSA.  This rule unfairly limits consumer choice, particularly in instances where the individual’s medical expenses are not being covered with funds from the spouse’s FSA.  
• Allowing Separate Deductibles for Individual Family Members:  HDHPs for family HSAs should be allowed to include separate deductibles, also known as “embedded deductibles,” for individual family members below the family deductible set by the statute – but at least as high as the individual deductible set by the statute.  Under current law, individual embedded deductibles are permitted only to the extent that they are not lower than the statutory family deductible.  Allowing lower embedded deductibles for each family member will make it easier for families with HSAs to meet their health care expenses. 

Helping Early Retirees and Seniors

• Retiree Health Coverage:  Early retirees – those in the 55-64 age category – should be allowed to use HSA funds to purchase retiree health coverage.  This proposal would make transitional coverage more affordable for individuals who sometimes struggle with the high cost of health insurance in the years just before they become eligible for Medicare.  It also would give the near-elderly more flexibility as they plan ahead for changing circumstances. 
• Medigap Coverage:  Seniors should be allowed to use HSA funds to purchase Medigap coverage.  Current law, which prohibits this use of HSA funds, fails to recognize the high value offered by Medigap policies and the fact that millions of Medicare beneficiaries are well-served by supplementing their basic Medicare benefits with Medigap coverage.  Reversing this prohibition will make Medigap coverage more affordable for persons with HSAs. 

Giving Employers More Flexibility in Offering HSAs

• Coordination With HRAs and FSAs:  Employers should be allowed to combine HSAs with Flexible Spending Arrangements (FSAs) or Health Reimbursement Arrangements (HRAs) to cover medical expenses below the HDHP’s deductible.  Currently, employers face regulatory barriers that significantly limit their ability to combine these products.  Allowing the coordination of these accounts will enable employers to develop innovative strategies for meeting their employees’ health care needs.  
• FSA and HRA Rollovers:  Individuals with unspent funds in employer-based FSAs or HRAs should be allowed to transfer these funds into their HSAs.  Current law allows such rollovers from Archer Medical Savings Accounts (MSAs), but not from other health care spending accounts.  Allowing FSA and HRA rollovers would free up existing resources to help many individuals and families build up funds in their HSAs. 

Promoting Tax Parity and a Level Playing Field

• Above-the-Line Tax Deduction:  Congress should enact an above-the-line tax deduction for all health insurance coverage, including HSA-compatible health plans, purchased in the individual market.  This proposal would make health coverage more affordable for individuals by granting them the same tax-advantaged treatment that is available to Americans who receive employer-based coverage. 
• Tax Credits:  Congress should enact tax credits to help low-income persons purchase HSA-compatible health plans and other types of health insurance.  Building upon the health care tax credits that Congress enacted in 2002, this proposal would put health insurance within the reach of many low-income Americans who are unable to afford coverage without assistance. 
• Contribution Limits:  The HSA contribution limits should be increased to allow consumers to contribute an amount equal to the out-of-pocket limits of their HDHP.  Increasing this threshold will enable HSA account-holders to meet their health care expenses with after-tax dollars.  Current law places an annual limit on the amount of funds consumers are permitted to deposit in their HSAs; this limit may be lower than the amount of the HDHP deductible. 

Easing Administrative Complexities

• Align Deductibles and Contribution Limits for Mid-Year Enrollment:  Current rules act as a disincentive for employees who want to enroll in an employer-provided HSA in the middle of the year.  When employees establish an HSA in the middle of the plan year, they are not allowed to make a full year’s contribution to the account – even though the employer is required to charge a full year deductible.  This “mismatch” between the deductible and the contribution amount is a hardship for employees who want to sign up for HSA coverage mid-year.  Employees should have the opportunity to make the full annual contribution when they enroll during the middle of a plan year, or the employer should be permitted to charge a smaller deductible.
• Earlier Release of COLAs:  The annual adjustment of deductible amounts, out-of-pocket expense limits, and contribution limits should be announced by the Treasury Department earlier during the year to give employers sufficient time to determine their plan offerings for the new year.  Instead of being announced in November, the adjusted figures should be announced by June 1.   
• Give Consumers More Time to Establish an HSA:  The current HSA law punishes consumers who may wait to set up their HSAs by prohibiting the use of HSA funds for any medical costs incurred before the account was set up.  Experience has shown that some individuals may wait several months to complete the paperwork needed to establish an account at a financial institution – thereby delaying when they can use HSA funds to pay for medical costs.  Consumers should have until the end of the tax year (April 15) to set up the account in order to pay for health costs incurred during that year.
• Technical Change to ERISA COBRA Requirements:  Congress exempted the HSA financial account from the COBRA continuation of coverage requirements by amending the federal tax code to make clear that the COBRA law does not apply to the account.  Continuation coverage is not necessary because the money in the account is “portable” and goes with the employee when he or she changes jobs.  The HSA law, however, failed to enact a similar amendment to the ERISA law and there continues to be some confusion regarding the application of COBRA to the account.  Therefore, a technical change is needed to provide an exemption for HSAs under the ERISA rules for COBRA continuation coverage.  This change would not affect the HDHP, which is subject to the COBRA continuation coverage requirements.
• HSAs for Veterans:  Veterans who use VA health care facilities should be allowed to contribute money to an HSA.  Under current law, any veteran who has accessed the Veterans Administration medical system within the past three months is prohibited from putting money into an HSA.  This restriction hurts veterans – especially returning service personnel who have service-related injuries. 

Progress at the State Level

Having reviewed these opportunities for further legislative improvements at the federal level, we also want to acknowledge the positive steps many states have taken to expand consumer access to HSAs.  At the time HSAs were enacted by Congress in December 2003, many state laws impeded the offering or approval of HSA-compatible high-deductible health plans.  For example, some state laws required coverage for certain types of benefits – or benefits for certain categories of individuals – before the minimum deductible amounts were reached.  Other state laws prevented HMOs from offering HDHPs by either specifying the amount of deductibles and copayments or by interpreting requirements for “reasonable” deductibles or copayments as prohibiting these products.  Still other states did not allow the HSA contributions to be deducted for state income tax purposes. 

In the intervening years, most states have taken action to remove these impediments.  In fact, as of June 15, 2006, all states except Illinois, Missouri, and New York have passed legislation to remove impediments to offering an HDHP in connection with an HSA.  Moreover, only Alabama, California, New Jersey, Pennsylvania, and Wisconsin have not acted to make HSA contributions deductible for state income tax purposes.  

V.        THE IMPORTANCE OF TRANSPARENCY

Because HSAs provide an opportunity for consumers to be more actively engaged in their personal health care decisions, greater transparency – with respect to both the price and quality of health care services – is critically important in helping consumers and other purchasers make informed, value-based decisions.  HSA accountholders are a catalyst for transparency and our efforts are evolving to meet their needs.  AHIP and our members are strongly committed to making price and quality information more widely available and more easily understood for consumers with all types of health coverage. 

Industry Efforts to Promote Transparency

In addition to implementing plan-specific initiatives, our members are working with other key stakeholders to give consumers information that will allow them to assess physician and hospital performance.  In September 2004, AHIP joined a broad coalition of stakeholders, including the American Academy of Family Physicians and the American College of Physicians, to form a collaborative effort to determine how to most effectively and efficiently improve performance measurement, data aggregation and reporting in the ambulatory care setting.  This broad-based coalition, the AQA, is now composed of more than 125 organizations representing physicians, consumers, employers, government, health insurance plans, and accrediting and quality organizations.  In April 2005, the AQA endorsed a “starter set” of 26 clinical performance measures for the ambulatory care setting that are already being incorporated into provider contracts.  The uniform starter set includes preventive measures for cancer screening and vaccinations; measures for chronic conditions including coronary artery disease, heart failure, diabetes, asthma, depression, and prenatal care; and two efficiency measures that address the overuse and misuse of health care services.  The AQA also has adopted new sets of measures for practitioners in the areas of cardiology (eight measures) and cardiac surgery (15 measures).  These measures represent an important first step in establishing a broad range of quality standards to give consumers the information they need to make informed health care decisions. 

Over the next few months, the AQA will be working toward identifying a starter set of efficiency measures.  These measures will assess physicians’ resource utilization when treating select conditions over a period of time.  The AQA will seek to align these measures with existing clinical quality measures and ensure that they are appropriately adjusted for risk and case mix. 

On another front, the AQA is receiving support from the Centers for Medicare & Medicaid Services (CMS) and the Agency for Healthcare Research and Quality (AHRQ) to launch a pilot program in six sites across the country to combine public and private sector quality data on physician performance.  This pilot program will test various approaches to aggregating and reporting data on physician performance, while also testing the most effective methods for providing consumers with meaningful information that they can use to make choices about which physicians best meet their needs. 

This pilot program is being implemented in areas and through organizations that have a history of collaboration on quality and data initiatives among health plans and physician groups: 

• California Cooperative Healthcare Reporting Initiative, San Francisco CA;
• Indiana Health Information Exchange, Indianapolis IN;
• Massachusetts Health Quality Partners, Watertown MA;
• Minnesota Community Measurement, St. Paul MN;
• Phoenix Regional Healthcare Value Measurement Initiative, Phoenix AZ; and
• Wisconsin Collaborative for Healthcare Quality, Madison WI.

A highly respected advisory committee of leaders in quality and performance design selected these six entities because they have the infrastructure and experience needed to support the combination of public and private data and, additionally, are positioned to implement the pilots within a short timeframe.  Ultimately, we anticipate that the results of this pilot program will lead to a national framework for measurement and public reporting of physician performance, which is an important step toward improving transparency and consumer decision-making.    

Plan-Specific Initiatives to Promote Transparency

Individually, many AHIP members have taken steps to promote transparency.  While plans use a variety of approaches, our industry is pioneering the next generation of consumer tools and resources to help Americans make value-based health care decisions.  The following are examples of sixplans that have implemented transparency tools to help their enrollees become better informed health care consumers.     

Aetna has developed a suite of tools, called Estimate the Cost of Care, that allows its enrollees to estimate average in-network and out-of-network costs in the member's zip code for various health care services and products.  These tools are a valuable resource for enrollees who are interested in cost information on prescription drugs, medical and dental procedures, office visits, medical tests, and a variety of diseases and conditions.  For example: 

• Prescription Drugs:  Enrollees can access information about specific drugs, drug uses and interactions, and the cost of brand and generic prescription drugs at retail drug stores and through Aetna’s mail-order program.
• Office Visits:  Enrollees can receive estimates on the costs, by type and complexity level, for visits such as routine physicals and emergency room visits, and the potential cost savings if they choose participating physicians or hospitals.
• Diseases and Conditions:  Aetna’s Estimate the Cost of Care tools provide up to a year of estimated average total in-network costs for facility, doctor, pharmacy, and medical tests associated with specific diseases and conditions, such as asthma or diabetes, depending on their level of severity.

Building upon these tools, Aetna recently announced that effective August 18, it will provide online access to physician-specific cost, clinical quality, and efficiency information in Connecticut, Maryland and Washington, D.C.  and in portions of Florida, Indiana, Kentucky, Ohio, and Virginia.  This initiative will provide physician-specific pricing for up to 30 of the most widely accessed services by specialty along with indicators based on adverse events, hospital re-admit rates, and overall efficiency.  In addition, Aetna will provide pricing information in Kansas City, Las Vegas, and Pittsburgh.  These enhancements will provide Aetna members with clinical quality and efficiency information for more than 14,800 specialists and pricing information for more than 70,000 physicians. 

Blue Cross and Blue Shield of Florida is broadening access to tools and resources to help its members find the information they need.  With the following web-based, decision-support tools, members of this plan can access health care information, estimate health care costs, research a medical condition or procedure, and choose physicians and hospitals based on their needs.

• Hospital Advisor™ – With this tool, members of Blue Cross and Blue Shield of Floridacan find and compare hospitals based on major health topics, procedures, and/or type of care; compare hospitals based on clinical quality, outcomes, patient safety standards, reputation, and characteristics; and retrieve health care data from over 50 public industry and government data sources. 
• Healthcare Advisor™ – This interactive tool is designed to provide members access to personalized health care information to help them make well-informed health care decisions.  Personalized information includes an educational assessment for over 239 medical conditions and procedures, questions to ask a physician about managing a condition or preparing for a procedure, and links to resources including websites organized by health care topic. 
• Physician Selection Advisor™ – This tool provides members the ability to research and compare more than 700,000 physicians from the American Medical Association and other reliable sources.  Physician attributes include various demographic, educational, and professional statuses.
• Treatment Cost Advisor™ – This tool is designed to help members estimate the cost of specific health care services.  It allows members to choose the type of service, provide some basic demographic information regarding age, region and gender and receive health care cost estimates. 

CIGNA offers its enrollees a range of tools to assist them with their decision-making: 

• Hospital Value Tool:  Provides star-based health care ratings for in-network hospitals’ patient outcomes and cost efficiency for 19 procedures.
• Hospital Comparison Tool:  Provides side-by-side hospital comparison data for 200 medical and surgical procedures based on the individual’s needs and preferences.  This tool contrasts a number of factors including patient volume, hospital mortality and complication rates, average length of stay, and patient safety.
• Prescription Drug Price Comparison Tool:  Provides real-time, actual out-of-pocket costs for brand name and generic prescription drugs, enabling CIGNA Pharmacy members to compare the actual costs charged by 54,000 retail pharmacies nationwide.
• DrugCompare™ from WebMD:  Allows members to make side-by-side comparisons of medications or classes of medications for average drug costs, side effects, and drug interactions or contraindications.
• CIGNA Care Network:  Offers members financial incentives for the use of select physicians who demonstrate superior health care outcomes.  Members can access information on quality and/or efficiency for these specialists.  Provider access is not limited as members can still select from any provider; however, members gain financial rewards for using providers within the CIGNA Care Network.

Harvard Pilgrim Health Care’s member web site includes a section called “Understand Quality,” which provides information, such as the Honor Roll, to help members make informed choices about their care.  Harvard Pilgrim uses HEDIS measures to evaluate the quality of care provided by its contracted physician groups and has developed a Physician Group Honor Roll to recognize those groups that have provided outstanding care to Harvard Pilgrim members.  Separate Honor Rolls are published for excellence in adult and pediatric care, and members are able to determine if an individual primary care physician is in a practice group that is on the Honor Roll.  Harvard Pilgrim also promotes transparency in several other ways: 

• An interactive on-line tool includes educational information about treatment options and what to expect for over one hundred different conditions and procedures.  This tools allows members to rate the importance of various convenience, safety, and quality characteristics of hospitals and receive a display of hospitals that best fit their preferences.  
• The Plan Cost Estimator allows Harvard Pilgrim members to estimate out-of-pocket expenses for themselves and their family members.  Members enter projected utilization (doctor visits, prescriptions, etc.) based on history and expected utilization during the following year. They then indicate any chronic conditions, for which the Cost Estimator calculates typical expenses.  The tool is pre-loaded to include the employee’s contribution to the premium and any employer contribution to a reimbursement vehicle (Health Reimbursement Arrangement or Health Savings Account).
• The Harvard Pilgrim Independence Plan (a PPO offered for Massachusetts government employees and retirees) features consumer cost-share differentials based on a two-tiered physician network.  Five high-volume specialties – cardiology, dermatology, general surgery, orthopedics, and gastroenterology – are tiered based upon variability in cost-effectiveness.  Quality information is not part of the tiering, but is disclosed separately to members.

Humana has developed a SmartSummary Rx tool that is designed to assist consumers in planning for their future spending on health care services and prescription drugs.  This tool, which is available through monthly paper-based or on-line statements, provides Humana’s members with: 

• personalized guidance about cost-saving drug alternatives and care options that are triggered by their specific prescription drug claims;
• details on the costs of their medications and the value of their plan, along with additional guidance tools that can enhance drug safety and medication-taking compliance;
• information showing where they are within the different stages of their prescription drug plan to help budget future out-of-pocket costs;
• details on the amounts members have paid versus what the plan has paid, along with information on specific discounts and how much money they have saved; and
• the ability to track prescriptions, including dosage, previous refill dates, and information on the prescribing doctor and pharmacy.

Independence Blue Cross has developed a number of tools to make information on provider performance and health care costs more transparent to its members.  This includes:   

• access to information on hospital quality and costs through a “HealthGrades” tool;
• a treatment cost estimator that allows people to estimate costs for management of conditions, diagnostic tests, office visits, and select procedures;
• a tool to compare the costs of various health plan options and to model HSA expenses;
• 24/7 Health Coaching to help members make more informed health care decisions using a Shared Decision model, including coaching on chronic illnesses and more than 20 significant decisions regarding surgery for specific conditions, and other types treatments;
• a pharmacy cost estimator; and 
• health risk appraisals, a full set of wellness and prevention tools, and access to general health information.

Independence Blue Cross also is working with the Hospital Association of Pennsylvania, its local affiliate (the Delaware Valley Healthcare Council), and hospitals to create a state-wide hospital performance measurement system to enhance data on hospital performance.  On another front, Independence is developing integrated quality and efficiency reports for twelve specialties.  Data from this initiative will be shared first with physicians and later with members. 

VI.       CONCLUSION

Thank you for this opportunity to testify about the value of HSAs and opportunities for further strengthening this important health care option.  We appreciate the support many committee members have demonstrated for HSAs and we look forward to continuing to work with you to advance solutions for further expanding access to high quality, affordable health care. 

[1] AHIP, January 2006 Census Shows 3.2 Million People Covered by HSA Plans, March 2006

[2] Government Accountability Office, Consumer-Directed Health Plans: Small but Growing Enrollment Fueled by Rising Cost of Health Care Coverage, April 2006

[3] Cigna HealthCare, Choice Fund Results Analysis, March 2006

[4] Employee Benefit Research Institute, Early Experience With High-Deductible and Consumer-Driven Health Plans, December 2005 

[5] Blue Cross and Blue Shield Association, Consumer Survey Shows High Rate Of Satisfaction With HSAs, Cites Increased Reliance On Decision-Support Tools, September 2005

[6] Assurant Health, Quick Facts: Health Savings Accounts