An alternative to traditional health insurance is slowly gaining ground in Wichita as employers and individuals seek relief from soaring premiums.

While a still-skeptical public has been slow to embrace health savings accounts -- or HSAs -- a lot of hope is being placed in these tax-deferred personal savings tools and their potential to curb the spiraling cost of health care.

Analysts see HSAs as an early step to shifting America's health care culture to a more consumer-driven one in which individuals take financial responsibility for their medical decisions.

Now that HSAs are available, some employers are switching from low-deductible insurance plans to high-deductible plans. Part of what employers save on premiums goes into HSAs, and workers spend from those accounts rather than tapping health insurance for every visit to the doctor.

In 2004 alone, employer health insurance premiums increased by 11.2 percent -- nearly four times the rate of inflation, according to the National Coalition on Health Care.

With HSAs, many companies are banking on a clear savings -- as much as 25 percent for some -- compared to traditional, fully insured plans, although most offer HSAs as part of an a la carte plan that includes traditional indemnity or HMO choices.

"We're trying to curb in costs," Wal-Mart spokesman Dan Fogleman said. "We believe the skyrocketing costs of health care can be controlled somewhat as consumers become more aware of what it costs for their care."

Health savings accounts allow an individual or employee to open a personal savings account attached to a high-deductible health plan. In 2006, the minimum deductible is $1,050 for an individual.

"Every year our health insurance costs were increasing between 40 to 44 percent," Doeden said. "After three or four years of that, we decided we needed to do something else. We wanted to cover our employees."

Because the company can afford to put more money into its employees' HSAs, Doeden said, everyone's out-of-pocket expenses ultimately went down despite the high deductible.

"There's a little bit extra effort for employees having to keep track of their medical activity, but I think that's a benefit in the long run because they are more aware of what's going on and more attentive to their savings," he said. "If they are careful about watching their medical activities, they actually have money at the end of the year... money they can use at a future time. We're all pretty happy with it."

At their core, health savings accounts, signed into law by President Bush in 2003, offer consumers tax benefits and even retirement savings while ensuring a catastrophic medical event is covered.

Tax-free contributions not used for medical care accumulate in the investment accounts -- and in some plans can be invested -- until the workers retire, at which time they can withdraw the money for any reason and pay regular income tax.

For Wichita resident Ron Cole, 68, a self-employed accountant, Medicare was not enough, but traditional insurance plans were too expensive. HSAs answered his needs, he said.

The Wichita Independent Business Association began offering HSAs to its members in June as a way to stem dwindling membership and provide an alternative to increasingly expensive fully insured plans.

Some 60 percent of WIBA's 1,300 members in the Sedgwick County area join the association for access to health benefits, president Cliff Sones said.

Over the past year, however, WIBA began losing members -- about 100 of them -- mostly because they couldn't afford the insurance, he said. Ninety-five percent of WIBA's members have fewer than eight employees.

"We were seeing a loss of membership due to the escalating cost of health insurance premiums, and we tried to find a product that would help those members with: one, the cost; and two, hopefully, put the decision process back in their own hands," Sones said.

About 15 percent of all Fiserv Health Kansas' new accounts today are high-deductible health plans with HSAs, said Jim Petrich, president of the benefits consulting firm that sells and administers HSAs.

"We're seeing a gradual growth in high-deductible health plans; more and more people are definitely interested in seeing quotes," he said. "A year ago we might have given out 50 high-deductible health quotes. Now every employer we quote either wants it as a total plan replacement or an option."

Insurance experts say it also is too early to tell whether HSAs will actually drive down the cost of health care by putting medical care decisions back in the consumer's hands.

For the past several decades, employees have become insulated from the cost of medical services, she said. Meanwhile, managed care has contributed to the increased usage of health care services by creating an expectation that everything should be free to the individual, Praeger said.

"As a country, we can't sustain this growth in health care costs," Praeger said. "We have to find ways to bring it under control. Getting the individual more actively involved is a start. They (HSAs) are not a panacea, but they're a step in the right direction."

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