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  • Side Effects: HSAs an Endangered Species under Obamacare

    Why is there so much excessive—indeed, downright wasteful—spending in health care?  One reason is the disconnection between patients’ wallets and their health care bills.

    Most Americans get health insurance through their employers.  They neither witness nor control the flow of their dollars from employer to insurer to health care provider. Yes, those health care dollars are their compensation, just like wages. But with no visible “skin in the game,” they have little incentive to limit spending.

    Engaging patients in the cost of their own care is one way to motivate them to seek better value for the health-care dollar–good quality health care at a reasonable price.  And consumer-driven health plans, such as health savings account (HSA) plans, do just that.

    As America’s Health Insurance Plans (AHIP) explains, HSAs “give consumers incentives to manage their own health care costs by coupling a tax-favored savings account used to pay medical expenses with a high-deductible health plan (HDHP) that meets certain requirements for deductibles and out-of-pocket expense limits. Most HDHPs cover preventive care services (e.g., routine medical exams, immunizations, well-baby visits) without requiring enrollees to first meet the deductible. The funds in the HSA are owned by the individual and may be rolled over from year to year.”

    Increasing numbers of Americans are finding value in these plans. AHIP reports that 10 million Americans were enrolled in HSA/HDHP plans at the start of this year.  That’s a 25% increase over January 2009 levels and a 64% jump in the last two years.  Today, more than one of every 10 newly purchased health plans are HSA/HDHP plans.

    Unfortunately, Obamacare threatens to render HSA/HDHP plans a thing of the past.  It’s a regulatory thing. It all depends on how the Department of Health and Human Services decides to calculate the actuarial value of HDHPs.   According to Roy Ramthun of HSA Consulting, if HHS opts not to “count” contributions to HSAs as part of the actuarial value, then “HDHPs, many of which have actuarial values below 60 percent (or whatever the final standard becomes) based on the insurance coverage alone, could no longer be sold.”

    Will HSA contributions be included in these calculations?  HHS Secretary Kathleen Sebelius will be The Decider on that one.  If she rules “no,” then high-deductible health plans including HSAs will no longer be viable… and you can kiss such plans good-bye.

    Posted in Obamacare [slideshow_deploy]

    7 Responses to Side Effects: HSAs an Endangered Species under Obamacare

    1. Pingback: » Financial News Update – 06/01/10 NoisyRoom.net: The Progressive Hunter

    2. Barbara says:

      I do have to say, that at one time, I didn't worry about my health insurance because I belonged to an HMO and never got a bill…of which I am thankful for. Now that I am on my own and no longer have that safety net, I do have insurance through my present employer but am very careful what I do and how much it is going to cost me. I realize, even when I can't afford something having to do with my health, I don't expect the government or anyone else to make it easier for me or to provide those services. I am just so concerned that too many people have come to rely on the government for ALL of their needs, be it housing, healthcare, or social security. I am eligible to apply for social security later this yr, but have decided that I will not apply for that or Medicare. I know that one person making a decision not to tap into a resource that is bankrupt, doesn't make even a ripple in the grand scheme of things, but I feel that I have to anyway. I will continue to work and hopefully save some towards my retirement. I think also, that people are too much in debt because of their lifestyles (I'm guilty as well) but once out of debt, I will start saving towards my retirement, however small that might be. I just hope that the government doesn't continue to tax me to death.

    3. Billie says:

      this administration is definitely against people in control of their own individual lives. For what good is this to remove from the people when it promotes living free from government? Another step towards government control…

      must stop all steps!

    4. tim bierbach mclean says:

      good article, well written and true. met you on a midwest flight from dc to milw. it was such a pleasure to meet you. it gives me hope that we have some young smart pretty (on the right side of the issues) women still out there. keep up the good work and good luck. tim

    5. James, Florida says:

      It is difficult to jusitfy the claim subscribers should monitor the cost of their health care when most plans require that you are only allowed to go to their "approved" providers, use their "approved" pharmacies, or pay a penalty – then you only find out the true cost when the statement arrives. Perhaps a better program that included the patient in the selection of their physicians and pharmacies, and confirmation that the services billed had been received would reduce costs and quality of care.

    6. Pingback: Today in Washington - September 23, 2010 | RedState

    7. Pingback: Hsa policies | 24seventechs

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