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The Star Tribune newspaper posted an article on Nov 29, written by Kevin Freking of the Associated Press, stating that:

...the Medicare drug benefit has cost nearly $13 billon less than expected this year, a rare federal program coming in under budget.

President Bush credits competition among the private insurance companies as being a factor. The Center for Medicare and Medicaid Services agrees with that and adds lower member enrollment and drug prices rising less than expected, all contribute to this savings. As a result we have seen the private insurance companies who sponsor these drug plans actually lower or maintain their premium rates; good news when all we previously had was confusion.

We're seeing some similar trends with HSA medical plan renewal premiums. The insurance companies are seeing lower loss ratios and some are even reducing premiums as a result. The consumer engagement theory appears to be working and companies like Blue Cross Blue Shield are seeing that utilization is less than expected, thus they are passing the savings on. HSA's don't work for every group but utilization can be affected by these programs and yield positive results. Less is good and this holds true in insurance as well as other facets of life.

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