Agent Interview: HSA Expert Roy Ramthun - Part 1 of 2

Roy Ramthun is one of the nation’s leading experts on Health Savings Accounts (HSAs). Formerly health care advisor to President Bush and Senior Advisor to the Secretary of the U.S. Treasury for health initiatives, Roy has played a crucial role in the successful implementation of HSAs nationwide.

Roy recently took the time to share his thoughts on the developing HSA marketplace and how his new venture, www.HSAed.com, serves as a unique resource for both consumers and agents.

Norvax: Can you give me a quick rundown of who HSA Ed is, and what you do?

Roy Ramthun: HSA Ed is really a joint venture between Tim [Morales] and I to have a dedicated site where consumers can go to get good information about HSAs beyond what a lot of the other sites are able to do. I worked at Treasury and created the site for Treasury, where the goal was to get information to consumers as quickly as possible. But Treasury has not been able to keep up with all of the requests for information and as HSAs develop in the marketplace, more and more people are going to have questions. Our goal is to go way beyond what Treasury has on their site and create something that will be the number one resource for people to go to for HSA information.

Norvax: You’ve been a longtime promoter of HSAs, notably in your key roles with the Treasury department and the White House. As someone so intimate with HSA implementation and adoption into law, can you describe how HSAs are an improvement over traditional insurance?

RR: Sure. First, HSAs are an improvement because they are what I call “real” insurance, not just pre-paid health care. We’ve gotten ourselves to a point where we pay our premiums and we don’t see a lot of that cost because sometimes our employer is picking up a big chunk of that cost. Yet then we have very high expectations about what our health insurance offers. So we expect everything to cost us only a $10 co-pay, and we have a sense that we are entitled to as many of the benefits as we can possibly use because we’ve already paid for them. HSAs really start to remind consumers that some of this money is their money. And in fact, all of it is really their money when you consider how insurance is financed through employers. This gives consumers a way of understanding the cost of care and gives them an opportunity to save money.

An HSA is a way of really having a rainy day fund that has not only tax advantages but real savings opportunity. People can roll that money over and grow it over time so that it becomes a vehicle for planning for their future healthcare expenses.

Norvax: HSAs are still a new concept to most consumers. What are the hurdles to educating them on the benefits?

RR: Educating consumers is tough because insurance has been something that most of us have taken for granted for a very long time. As HMOs came along we thought that now everything is covered for just a $10 co-pay. Most consumers don’t understand how their insurance is paid for through their employers today, that they’re actually giving up wages in order to pay for what the company contributes to their insurance. I think that once you get people to understand where the money is coming from and where the money is spent they’re much more cognizant of how much health care starts to cost. Anybody who currently has a flexible spending account understands the feature of “use or lose” at the end of the year and we all go out and have to spend money on things we know we really don’t need but we don’t want to give that money back. People’s behavior starts to change once they see that it’s their money, that they can keep it.

HSA Ed is designed to be kind of that first level with additional complexity as people need more detailed information. So they can really come in, learn about HSAs and how they work and get their questions answered and know that someone will answer their questions in a way they can’t always get from other sites. We don’t sell HSAs, we don’t sell HSA policies. HSA Ed can help connect people when they want to take steps to find a policy, to find an institution that will hold their money. There isn’t that many people out there today that can offer that kind of service.

Norvax: What would be the 3 most attractive components of HSAs to the consumer?

RR: I think the things that would be best to highlight would be one, the savings opportunity. The accounts have many opportunities for savings, including tax savings, premium savings, investment savings, roll over savings, etc. So savings to me is what makes most people’s eyes light up.

Two, the key concept that this is their money. Basically an HSA allows them to refinance their health insurance premium and pay some of that money to themselves. Not just to the black box that insurance can be for so many people because they pay their premiums but don’t usually use a lot of health care benefits, so the people don’t always feel they’re getting their money’s worth.

And number three, the flexibility and the control that HSAs offer to consumers. It doesn’t matter what their insurance company says they cover anymore because they have this account of funds that they can use to pay for expenses that maybe their insurance company won’t approve. Or maybe it’s something they place a higher priority on that maybe the insurance company doesn’t. For example, people who want some of the alternative medicine treatments like chiropractic, acupuncture. People who want laser eye surgery. There are all kinds of ways people can maximize their healthcare dollars without some of the existing restrictions that insurance offers. This is something that they don’t have control over today but HSAs clearly offer them for the future.

Next month Roy will share his thoughts on the future of the consumer health care market, carrier adoption and give his advice to agents interested in marketing HSAs.