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Capitol Comment
by Senator Kay Bailey Hutchison
Informed and Empowered Consumers Can Lower Their Health Care Costs
June 15, 2007
Rapidly rising health care costs are an enormous burden on families, individuals and businesses. Nationwide health spending rose almost 80 percent between 1997 and 2005, and is projected to reach $4 trillion by 2015. As chairman of the Senate Republican Policy Committee, I recently invited academics, business leaders and my fellow senators to a roundtable discussion to examine the challenges facing our health care system. We all agreed that to address our health care crisis and reduce costs, consumers must have the freedom and ability to make informed choices.
Americans are smart shoppers—we make dozens of economic choices every day, on everything from cars to cereal. We appreciate the value of quality service and competitive pricing, and we take these factors into account as we decide which products to buy. Unfortunately, the same information is not always available when shopping for health care, and often consumers are not afforded a real choice.
For too long, breaking the code to insurance pricing has been a near mystery to most people. Consumers need this information as they compare and choose between available health plans. As a result of an executive order, health insurance providers are now making detailed pricing information available to their customers. Such transparency helps Americans make informed decisions and select options that lower their health care costs.
Many Americans are forced to visit only doctors covered by their health plans or are barred from important treatments not approved by their insurance company. I championed the creation of Health Savings Accounts (HSAs) to give Americans more freedom in managing their health care expenses. Instead of simply paying a traditional insurance premium, HSA participants contribute to a tax deductible savings account reserved for health-related expenses. Consumers spend only what they need from these accounts, and do not waste money on insurance benefits they may never require. They can decide for themselves how to spend their money, on the doctors and treatments they choose. HSAs are coupled with high-deductible insurance policies that provide a safety net in case of catastrophic injury or illness. These and other consumer-driven options give consumers ownership of their health budgets, and follow the person, not the job.
I also strongly support the Medicare Part D prescription drug benefit, which uses a market-driven approach to deliver great savings for seniors and the federal government. The program gives seniors many more options because it allows providers to design a wide array of benefit plans. Participants can then compare plans and make their choices based on price and the type of medicine covered. As a result, over 80 percent of Medicare Part D enrollees report that they are satisfied with the program, and participants are saving an average of $1,200 per year on their drug expenses.
These programs have been successful because they give Americans the power and information to choose the health care options that are right for their families and right for their pocketbooks. However, more can be done to increase consumer choice. For example, Americans who choose to purchase their own health insurance should enjoy the same tax benefits that are available to businesses that purchase insurance for their employees. Increased transparency and more consumer choice will further reduce health care costs, and I will continue to support health care options and the savings that they represent for your family and business.
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