In an article full of left-handed compliments, the San Francisco Business Times noted that Kaiser Permanente, the mother of all HMOs, has 12 percent of its members in “deductible plans” at the end of 2008 (“New health for HSAs,” Jan. 16-22 issue). The traditional Kaiser Permanente deductible is zero. Of those in such plans, 15 percent to 20 percent are in HSA-eligible, consumer-driven plans.
One or 2 percent of overall enrollment is not much, but this is Oakland-based Kaiser Permanente, whose model is the poster-child for prepaid health care. This measly level of enrollment helps to explain why California has not enjoyed the same penetration by consumer-driven plans as the rest of the country has: Only 4 percent of covered lives at the end of 2008, versus 8 percent for the nation overall.
While more businesses are looking to enroll in consumer-driven plans, Kaiser was losing customers because of its recalcitrance. Oakland’s Sterling HSA bank saw the number of new HSAs double in 2008, and balances increase by almost as much.
As we say in the capital markets, “The trend is your friend.” By changing its tax code to allow HSA deposits to be deducted from taxable income, California could catch up with almost every other state that has done so, instead of punishing its residents whose only crime is saving and spending their own health-care dollars.
(At the time of writing, the California Sick Tax Clock stood at just under $165 million. That’s the amount of money that Californians have lost to the state since 2004 in excess taxes.)