Consumer Driven Healthcare

Healthcare Debit Cards…the Pay at The Pump of CDH

Brett Gens

As I recently used my Healthcare Debit Card at a Target store for some allergy medication I was struck by where we’ve come. I use a card to get Cash, I use a card to pump gas (more on this later), I use a card for Internet Shopping, and now I use a card to purchase medication and health care related services.

In the late 70’s and early 80’s, when ATM’s were new, was there ever a single person who didn’t think, “Why didn’t we have these devices a long tome ago?” Fast forward to the 90’s when Pay at the Pump was becoming increasingly popular.  Personally this saves me about 20 minutes a week (plus $$ in spur of the moment purchases but that’s a different topic), money saved not writing checks, or ATM fees, since the convenience stores I frequent are NEVER in my banks’ network. Roughly 50% of people Pay at the Pump and the other half walk inside to pay.  I see many of these folks buying only gas: no energy drinks, cigarettes, coffee, etc.

I see this analogy similar to a debit card claim versus a paper reimbursement claim.  Why anyone would bother with the hassle of using a “normal” credit card, cash, or a check for a valid medical expense is beyond me. Filing a manual paper claim for something I could have used a Medical Debit Card for is probably number 4 or 5 on my list of 100 things I’d rather not be doing at any time…ever.

With the advent of IIAS (Point of Sale Substantiation) in 2007 (by the end of 2008, most chain pharmacies must have an IIAS as well), there’s really no valid reason to NOT have a Healthcare Debit Card for Consumer Directed Healthcare Plans. Some Industry stats indicate that there are about four million to five million HSAs and four million to six million active HRA accounts, and around 20 million FSAs. With the pending HSA explosion Healthcare Debit Cards will be like cell phones…you won’t find many who DON’T have one…well except my grandparents.

With skyrocketing health care costs, a CDH Debit Card has to be one of the easiest ways for an Administrator to save costs:  money saved in labor, printing checks, postage, etc.  Checks are roughly $1.00 each; direct deposit 9-12 cents each. A Debit Card Swipe costs nothing.

I love my Healthcare Benefits Provider.  They are always very prompt and helpful I enjoy talking to them when the need arises.  However, I figure they have many better things to do then substantiate, adjudicate, file and process my claim, generate a letter or two, and send me a check… all for my $6.59 purchase of Aleve.

Brett Gens (bgens@lighthouse1.com) is a Debit Card expert and Business Analyst at Lighthouse1

The 8% Tax Increase You Didn't Even Know You Got

If you pay taxes, you're going to love [this]. 

Let's put this all into perspective.  We all know that every company in the U.S. has been dealing with rising healthcare costs.  Every employer has had to make tough choices to be profitable, attract talented workers, and compete. 

Federal employees - there are 8 million of them - and their employers (arguably you and I) were recently dinged for an 8% increase in their health insurance costs.  60% of federal employees are enrolled in Blue plans which rose a whopping 13%.  Any of you get a 13% pay raise this year?  Was there a vote to increase the principle cost of government (government employees) by 8%?  Maybe I missed it.  The article reads, "...those [employee-paid] amounts represent about 30 percent of the plan's total cost. The government picks up the remaining 70 percent."  By "government" they of course mean you and I.

Interestingly, the reasons cited by the Office of Personnel Management (basically HR for federal workers) were exactly why CDH plans work better. 

"Jena Estes [VP of FEP for BCBSA] blamed a relatively slow shift to generic drugs by enrollees as one reason its increases are higher than average."  I am quite certain that if federal employees had an HDHP with an HSA that shift would have happened in the first month of the plan.  There is just not enough incentive for these 8 million federal workers to get healthy and spend wisely, and here's your proof.  [Washington Post]