The New Flexible Health Plans Patient Choice Could Expand Access to Speech-Language Pathology and Audiology Services Policy Analysis
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Policy Analysis  |   July 01, 2003
The New Flexible Health Plans
Author Notes
  • Steven White, is ASHA’s director of health care economics. Contact him through the Action Center at 800-498-2071, ext. 4126, or by e-mail at swhite@asha.org.
    Steven White, is ASHA’s director of health care economics. Contact him through the Action Center at 800-498-2071, ext. 4126, or by e-mail at swhite@asha.org.×
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   July 01, 2003
The New Flexible Health Plans
The ASHA Leader, July 2003, Vol. 8, 16. doi:10.1044/leader.PA2.08132003.16
The ASHA Leader, July 2003, Vol. 8, 16. doi:10.1044/leader.PA2.08132003.16
Health plans often fall short in covering audiology and speech-language pathology services, leading consumers to appeal plan limitations.
In health maintenance organizations (HMOs), a recent study of plan appeals showed that enrollees wanted coverage of services such as speech-language pathology (Studdert, D.M. & Gresenz, C.R. [2003]. Enrollee appeals of preservice coverage denials at two HMOs. JAMA, 289(7), 864–870).
Employers and Congress thought managed care organizations such as HMOs would curb escalating premium costs. For a while, they did. But inefficiencies such as unnecessary hospital days now have been eliminated, leaving little room to squeeze out more money. Moreover, HMOs that contract with individual physician practices appear to be moving away from capitation and negotiating for reduced fees. This follows the practice of the other dominant managed care organization, the preferred provider organization.
Although no federal law forces employers to offer health insurance, both federal and state laws regulate employee health plans. The Internal Revenue Service (IRS), the U.S. Department of Labor, and state health commissioners all have a hand in administering health plans. Another issue facing legislators, regulators, employers, and insurers is how to hold down costs and still attract employees to new jobs.
An Array of Health Plans
A number of group health plan choices are on the horizon. All the new plans give the consumer considerable freedom in selecting how funds are spent for health care. Consumer latitude should create more access to speech-language pathology and audiology services.
The new plans include:
  • Medical savings accounts (MSAs). These plans have existed but only in restricted situations. They combine a pre-tax dollar savings account with a high deductible (i.e., catastrophic) health insurance policy. Money in an MSA plan can be rolled over from year to year. Now only those who are self-employed or employees working for small businesses are eligible for tax-free MSAs.A complaint from the pro-MSA camp is that only the employee or the employer can contribute, not both. The appeal of the MSA is obvious—there is no need to obtain a specific health plan(s) for employees who are given the responsibility to spend funds as efficiently as possible. But employees with disabilities or chronic illness will probably have a gap between the level of money in the MSA and the expenditure level that is needed before the catastrophic plan initiates.

  • Health savings accounts (HSAs). U.S. House Ways and Means Chairman Rep. William M. Thomas (R-CA) recently introduced legislation (H.R. 2351) that would create HSAs. Unlike medical savings accounts, HSAs could have employer contributions, employee’s contributions, and tax-free rollovers of a portion of the unused flexible spending accounts. Moreover, annual contributions to HSAs equaling up to 100% of the accompanying health policy would be permitted.

  • If the U.S. House of Representatives has its way, HSAs will replace MSAs, and there would be no restrictions on health savings accounts. To add to the confusion, in late June the House passed a bill that would create Health Savings Security Accounts (HSSAs) that could be used by Americans who are uninsured or who have deductibles of at least $500 for individuals and $1,000 for families.

  • Flexible savings accounts (FSAs). This option, which many employers have adopted, has been available since the late 1970s, and there is a definite niche for these plans. Pre-tax dollars can be contributed by the employee in an account to pay for health care services not covered by the employer’s health plan and can be used to pay the employee’s share of the health plan premium. In the beginning of every year, the employee must predict how much money will be needed and afforded for additional health care expenses. If there is any money left in the account on Dec. 31, the employee forfeits the amount. Audiologists may be aware of this because in December, FSA holders may visit to purchase hearing aid-related devices that are considered tax-deductible by the IRS.

  • Health reimbursement accounts (HRAs). The newest plan to be developed, the HRA, has only recently been authorized by the IRS. In fact, the Council for Affordable Health Insurance emphasizes that this is an arrangement and not an account. Unlike the FSA, the funds in the HRA are contributed by the employer and must be used for medical expenses. A major advantage of the HRA over the FSA (other than where the funds originate) is that unspent money accumulates from year to year. Both of these plans allow employees to decide on the health care services that are covered. Visit www.unclefed.com/Tax-Bulls/2002/not02-45.pdf to read the IRS notice on HRAs. Halterman, Camero, and Maillet ask three questions about the current HRA ([2003]. The consumer-driven approach: Can it pick up where managed care left off? Benefits Quarterly, 19(2), 13 26). Can the employee move unused balances to the 401(k)? Can the employee use funds to pay for nontraditional health services? How are domestic partners affected? A Google Web search with “MSA HRA FSA” returns hundreds of hits for those who want to read more.

  • The health insurance exchange. With managed care organizations unable to contain health care cost inflation, another approach that is being touted is the health insurance exchange. This is not a purely consumer-controlled plan. The insurance exchange concept would give employees multiple choices among health plans, but with the employer contributing a fixed-dollar amount. If the employee wants a generous amount of benefits with a certain network of providers, the employee will have to pay more out-of-pocket. Visit www.healthaffairs.org/WebExclusives/Enthoven_Web_Excl_052803.htm to read more on the concept.

Americans may be in for considerable changes in employer-sponsored health plans. Most should allow access to coverage for speech-language pathology and audiology services because the consumer, not a gatekeeper, will determine how funds are spent.
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July 2003
Volume 8, Issue 13