• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Side Effects: Like Your HSA? Enjoy it While You Can

    All presidential assurances to the contrary, you can’t keep what no longer exists—not even health coverage you like.

    Millions of people like Health Savings Accounts (HSAs) paired with high-deductible insurance plans.  The approach is so popular, in fact, that it’s the fastest growing type of coverage in the country.  But this coverage may not be able to survive Obamacare.

    Consider the case of nHealth, a relatively new insurance provider based in Richmond, Va.  nHealth recently announced it will close its doors due to the combination of stringent new regulations and future uncertainty—both the product of the new health care law.

    Named one of “Greater Richmond Companies to Watch” in 2008, nHealth specialized in high-deductible plan, combined with HSAs.

    When paired with high-deductible coverage plans, HSAs provide consumer-managed health care.  The combination gives patients greater flexibility in deciding what health treatments to pursue, at the same creating incentives to reduce overall health spending.  The popularity of these plans has soared since their inception in 2005, when approximately 1 million Americans enrolled.  Today, that number has climbed to about 10 million.

    nHealth’s exit means less choice and competition in the insurance market.  And many other insurers are expected to follow suit due to new regulations created by Obamacare, especially its federally-imposed medical loss ratio.

    On January 1, 2011, insurers will be required to maintain an 80 percent medical loss ratio (MLR) in the individual market.  This means that 80 percent of revenue from premiums must be spent on medical claims, not on administrative costs or profits.  The National Association of Insurance Commissioners recently held a teleconference on the MLR’s impact, as several insurers begin to consider exiting the individual market in certain states where meeting the new MLR requirement would be not be viable. Decision time is now, as insurers must give policyholders six months notice before terminating a contract.

    According to Dowling and Partners, an insurance research firm, major players such as Aetna, Assurant, Mega Life, and United Health are likely to bail out of the individual market in at least some states.  As a result, 1 to 2 million Americans could lose their current coverage.  So much for promises.

    Posted in Obamacare [slideshow_deploy]

    11 Responses to Side Effects: Like Your HSA? Enjoy it While You Can

    1. Billie says:

      obamacare is not competition, it's not reform, it's take-over. it has to stop, period. It isn't right as it benefits only the government select, which eliminates those the government obligates to cover the costs and give up their own.

      If we can do it for ourselves we should. If the government enabled the free markets we could. Get the government out!

    2. Pingback: Health savings account » Side Effects: Like Your HSA? Enjoy it While You Can – Heritage.org (blog)

    3. Pingback: Natural menopause solutions | Online Health Information about menopause, childrens health, mens health and other health issues

    4. Rob Guilbert, Pres. says:

      Please check the link to Dowling and Associates, as would really be interested in seeing their report you reference, but it's not on the link…

    5. Trece de Lemos says:

      Following the example of PIGS and BRICS, I propose the designation FUKC for the other developed countries which inspired Obama's Universal Health-grab legislation: FRANCE, UNITED KINGDOM, CANADA.

    6. Seething Republican, says:

      The reason they are going after these plans is because they work.

    7. Susan of Lakeville, says:

      Health Flexible Spending Arrangements (Health FSAs), Health Spending Accounts (HSAs) and Archer MSAs: over-the- counter medications no longer qualify for reimbursement, unless the medication is for insulin or is a prescribed drug (regardless of whether the medicine or drug is available without a prescription).

      Health Care Reform is bad for Insurance Providers?

      Insurance companies get their money by denying care, by saying no to as many people in need as they can get away with, while maximizing their premiums they get from healthy people. This is actually the opposite of the way most markets work. Typically, companies that provide more of their product tend to make more money. In the health insurance industry, companies that provide less "product" make more money. In a normal market, greater competition helps consumers, but with health insurance, competition is for profits, not for delivering care. Greater competition for profits equals a competition to deliver less care, which actually harms consumers. Health insurance is an anti-market phenomenon.

    8. Sonny N C says:

      Biggest fraud and whoever thought of the plan of O knew it would wreck instead of helping anyone but the White house and company. They care less about the people, the plan needs to be vetoed, and when things are running , leave it alone. We need the real America back, with people leading the country who cares about it!!

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

    10. Pingback: The Micro Effect » Blog Archive » Washington DC — Today’s Major Events - Alternative News – Alternative Thinkers

    11. Pingback: Thanks Obama care - Page 5 - HawkeyeNation Forum

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.