My family has it all -- from all-star athletes to those of us who need to lose more than a few pounds. With the exception of my son, the athlete, we work too many long hours, eat on the run, and don't exercise like we should. All of us take medications and see several different doctors during the course of an average year. We are highly functional, but not that healthy when it comes down to it.
We're functional because we want and need to be that way. We're lucky to have jobs we love that require our attention and a great family. And because we have insurance to help with our prescription drug costs and other medical expenses, we can easily pay for all the health care we need, regardless of whether or not we make the right choices for optimum health. And of course, sometimes people just have conditions that don't go away, like my son who, in spite of his athletic abilities, has the highest medical expenses in our family due to year-round severe asthma and allergies, not to mention numerous sports injuries and the surgeries to repair them.
In short, my family is perfect for a consumer-directed health care plan. Our prescription drug copays alone are $340 per month -- before we ever see one doctor or incur any other medical expense. These copays do not count toward the out-of-pocket maximum on our current health insurance policy, just as they don't on most policies. So, no matter how many drugs we need in a year, our copays will continue. That means that, at our current rate of prescription drug spending and without any other medical expenses, we are paying $4,080 out of our own pocket for prescription drugs each year.
More important than what our family is paying out of pocket is that the copays we pay at the pharmacy are only a minor part of the cost of our medications. The actual retail cost of our prescriptions each month is $1,760. So, if we had a $2,000 annual family deductible with an HSA, we'd meet our deductible just into the second month, and all of our expenses after that would be paid at 100 percent. Premiums for dependent coverage would be lower since we'd be paying for a higher deductible health plan rather than a traditional plan. Even if we had to fund the entire HSA account ourselves, the $2,000 would be half what we are paying out of pocket now for drugs alone.
Unfortunately, because we would need to use all of our HSA deposit to meet our deductible expenses, our family wouldn't benefit much from the savings aspect of an HSA in terms of tax-deferred savings for the future. But we'd save a lot in out-of-pocket expense. Hopefully, Congress will take another look at the maximum deposits allowed each year to better enable people to save for future medical expenses through their health savings accounts.
I believe our family is typical of many all across America. We don't have any financial incentive to get healthy or use health care wisely because our health insurance pays for it all.
My son's asthma medications aren't optional and, as much as we've tried to reduce them over the years, we've never been very successful. On the other hand, several of the medications my husband and I take are a direct result of conditions that would improve if we did a better job of diet and exercise. We could easily cut our medication costs at least in half. Would the potential of accumulating savings over time be a good incentive for us? I think it would be a real incentive we couldn't ignore.
It's because of families just like ours that I'm so excited about the possibilities for reforming our health care system with innovative new health plan designs like HSAs and other consumer directed health care options. Changing our health care and health insurance system will require us to change from the status quo and become active participants in our own good health. At NAHU, we're serious about improving the health of America and we're going to be making a big push to bring those changes to fruition. And we'll need the involvement of all of you who are educating consumers across America about these programs to make it a reality.
Janet Trautwein is executive vice president and CEO for the National Association of Health Underwriters in Arlington, VA. NAHU represents more than 18,000 professionals involved in the sale and service of health insurance and related products. For more information, contact Ms. Trautwein at 703-276-3806 or jtrautwein@nahu.org or visit www.nahu.org.
