Health Savings Accounts (HSAs)

A new study of purchasers of Health Savings Accounts shows that the new health care financing arrangements are appealing to those who previously were shut out of the insurance market, to families, to older Americans, and to workers of all income levels.



The study shows that 70 percent of purchasers are over age 40, one-third make less than $50,000 a year, and more 75 percent are families with children.



Critics of Health Savings Account have charged that HSAs are only for the “healthy and wealthy” and argue that they should be rejected because they will destabilize health insurance for everyone else. But early findings about HSAs and other consumer-directed health plans show that the critics are wrong.



The study, conducted by Assurant Health of Milwaukee, also showed that 43 percent of those purchasing the accounts were previously uninsured. Clearly, HSAs also provide a new option to help the uninsured.



Another study by the major health insurer Aetna of Hartford, Connecticut, showed that its consumer-directed health care products are helping companies lower their health costs while providing incentives for employees to get better access to preventive care.



The Aetna study showed that companies that replaced their traditional health insurance with a consumer-directed plan saw their health costs fall by 11 percent. Meanwhile, the use of preventive services by workers increased by as much as 23 percent.



eHealthInsurance, an on-line health insurance brokerage, also surveyed those who have purchased insurance though its website and found that nearly half of HSA purchasers make less than $50,000 a year. Further, 70 percent of them paid less than $100 a month for their health insurance premiums.



Health Savings Accounts were enacted as part of the Medicare bill signed into law by President Bush December 8, 2003. The first Health Savings Account was sold on Jan. 1.



They allow anyone under age 65 to put aside money tax free for health care expenses. The only consideration is that the accounts must be accompanied by a high-deductible health insurance policy.



Individuals, employers, or employees can make a pre-tax annual contribution of $2,600, and families can make an annual contribution of up to $5,150 into an HSA. Interest earned on HSA funds is tax-free, and funds for qualified medical expenses can be withdrawn tax-free.

Auto Insurance rates falling

As if rising gasoline costs weren't enough to dampen our love of the open road, auto insurance rates have been increasing steadily for about the past four years. But there's some good news for many of us -- rates are falling in many places, and overall, the growth rate is dropping. Last year alone, American auto insurance rates rose nearly 8%, on average, but this year's average increase is expected to be just 3.5%.



According to a New York Times article, "After nearly 25 years of rising auto insurance rates, prices leveled off in 1997 and 1998, then dipped to an average cost of $680 per car across the country in 1999 and 2000. But the insurers said costs began to get ahead of them again and they began raising prices to an average of $842 per car last year." Ouch.



Many insurers are cutting rates in some or all regions, but they're generally not doing so with a broad stroke. Instead, some are cutting rates for their better customers (those who manage to avoid accidents, speeding tickets, and claims) while raising them for those who cost them more. Some of the many insurers involved include GEICO, a unit of Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B); USAA; Progressive (NYSE: PGR); Allstate (NYSE: ALL); and State Farm.

Auto Insurers respect same sex marriages

(CNSNews.com) - A homosexual advocacy group is hailing three of the largest auto insurance companies in New York for "respecting the marriages of same-sex couples."



Lambda Legal says Allstate, State Farm and Geico -- the top three auto-insurance providers in New York -- have agreed to give legally married same-sex couples the same rates and coverage as married heterosexual couples.

Blue Cross of California offers mobile outreach program

Camarillo, CA--(HISPANIC PR WIRE - BUSINESS WIRE)--June 29, 2004--Blue Cross of California (Blue Cross) today announced that it has launched a mobile outreach program offering application assistance for children into California’s Healthy Families Program, the state’s low-cost health program for children. Blue Cross is rolling out two new custom vans staffed with outreach personnel to travel throughout the state offering education and onsite application assistance for California’s Healthy Families or Medi-Cal Programs.

State Farm and Assurant renew relationship

MILWAUKEE, July 6 /PRNewswire/ -- State Farm Insurance and Assurant Health have renewed the national marketing alliance that makes Assurant Health's individual medical insurance products available through State Farm agents nationwide. The original alliance became official in July 2000 and marked the first time that State Farm had joined forces with a national health insurance provider.

"Over the past four years, our alliance with Assurant Health has made it possible to provide our customers with a complete portfolio of quality individual medical insurance products -- from traditional health coverage to innovative High Deductible Health Plans that can be combined with Health Savings Accounts to help manage qualified healthcare expenses," said State Farm Health Vice President, Sharon McAuley. "Continuing this alliance will allow us to do the same for many more of our current and future State Farm customers."



Nearly 17,000 agents currently sell State Farm insurance products and State Farm customers now comprise about one of every four households in the United States. Assurant Health is one of the nation's leading providers of individual medical and small group health insurance products.

Should doctors pay less for car insurance?

HARTFORD, Conn. - Your profession could land you a discount on auto insurance, but you might be surprised which occupations get a break -- or annoyed about which ones don't.



Several auto insurers have started granting discounts of 5 percent to 15 percent to attract doctors, engineers and firefighters, among others, in certain states.



But salespeople, politicians, clergy, homemakers and others with a lower-than-average frequency of crashes do not usually get an occupational discount.



For years, many insurers have given price breaks to people who belong to ``affinity groups,'' which include professional associations and groups such as AARP and AAA. The newer job-related discounts, though, are available to certain consumers directly, not requiring membership in an organization.



The occupation discounts are among insurers' latest ways of attracting the drivers they think pose the lowest risk or the highest profit potential.



Yet some of the occupations on their most-wanted lists, such as physicians and architects, have some of the highest accident rates, according to a study released last fall. San Francisco-based Quality Planning studied data that state motor vehicle departments gave insurers.

Fireman's Fund exits MA auto insurance market

The Fireman's Fund Insurance Companies has given notice to Massachusetts officials that it intends to withdraw from Mass. personal automobile insurance market on Dec. 31, 2004, because of continuing uncertainty in implementing state personal automobile insurance reform. Fireman's Fund also stated that if the insurance reform package currently under consideration is enacted by the state, they will rescind its withdrawal action.