Health Savings Accounts: Putting Patients in Control

Don't you hate that high deductible on your insurance policy? You have to pay thousands of dollars before insurance covers your care. That's terrible, some say, but is it really? A version of it may be the key to lowering costs and putting you in charge of your health care.

Five years ago, the grocery chain Whole Foods Market switched to a different kind of health insurance, a policy that puts patients more in control.

CEO John Mackey explained the appeal of these policies. "Because it's like, 'At last, I can go to that acupuncturist! At last, I can go to my chiropractor! At last, I can spend the money the way I want to spend it.'"

Whole Foods has an insurance policy with a high deductible. That means an employee like Braden Weirs must pay about $1,000 before his insurance kicks in. If he gets cancer or heart disease, his insurance covers it.

But if he has a sore throat or a sprained ankle, he pays.

To help workers pay, Whole Foods puts money into an account for them. Weirs got $1,500 this year. If he doesn't spend it on medical care this year, he keeps it and the company adds more next year.

"And I have plenty of money left over," Weirs said. "So I can go get my new prescription glasses at the end of the year."

Individual Responsibility

Most companies call these accounts Health Savings or Health Reimbursement Accounts. The company saved money, too. "Our costs went way down," said Mackey.

Still, some employees were angry about the plan. They said they wanted their full coverage back.

"When you go from a system where people are very dependent and now you're telling them, 'Hey, you have to take more responsibility for your own health.' … That was frightening to them," Mackey said. "Because they were going to have to be responsible for themselves, they weren't going to be taken care of any longer."

So, Mackey held a vote among his employees on the plan. "The result was, 77 percent of the team members voted for the health plan that we have today," Mackey said.

Today, some workers have piled up $8,000 in their health accounts.

"And then that's their money," Mackey said. "It builds up over time … and so, that's great because the money is compounding for them."

Weirs said he can save up his money and afford to have a child later on. It's because he controls the money and as it builds up, it can cover all sorts of future out-of-pocket medical expenses.

'How Much Will This Cost?'

Mackey said this changed his employees' behavior.

"They start asking how much things cost. Or they get a bill and say, 'Wow, that's expensive.' They begin to ask questions. They may not want to go to the emergency room if they wake up with a hang nail in the middle of the night. They may schedule an appointment now."

They didn't ask what things cost before?

"Why should they?" Mackey said. "Somebody else was paying for it."

When she went to the doctor, Whole Foods employee Mary Ann Buttros never asked, "How much will this cost?"

"Because it didn't matter," Buttros said. "And now it matters to me, because it's my money."

Because it is Buttros' money, some people worry that Health Savings Accounts will discourage people from getting the preventive care that they need or that they'll shortchange their health to economize.

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