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  • HSAs Could Bring Health Costs Down; Too Bad Obamacare Destroys Them

    Consumer-directed health plans have become increasing popular because of their ability to save consumers money. Breaking research published by Health Affairs shows that if consumer-directed health plans increased as a share of employer-sponsored plans from 12.4 percent to 50 percent, it could save $57.1 billion annually in national health expenditures. The report states, “Savings of this magnitude would account for 7 percent of all health care spending for the population with employer-sponsored insurance and 4 percent for the nonelderly population as a whole.”

    The study uses two types of consumer-directed plans to comprise the increased market share: half health reimbursement arrangements (HRAs) and half health savings accounts (HSAs). The study shows that if the ever-popular HSAs were to take up the entire 50 percent of market share, savings could reach $73.6 billion, or 9.1 percent of employee health care spending. This is because employees save more money in the high-deductible HSAs than in HRAs. HSAs are funded by both the employer and employee, while HRAs are funded solely by the employer. Thus, any money not spent in a HSA rolls over for the employee to keep, while in an HRA, it is just money the employer did not have to spend.

    HSAs prove that having more control over health care decisions goes a long way toward creating savings.

    Instead of building on this successful cost-saving model, Obamacare all but obliterates it. Many provisions of the law affect HSAs. For example, the medical loss ratio (MLR), which requires insurers to spend at least 80 percent (85 percent for group plans) of premiums on medical claims or quality improvement, weakens HSAs. Obamacare’s MLR does not take contributions to HSAs into account when determining if a plan meets the 80 percent threshold. One research report concluded, “For high-deductible and HSA plans to be viable, both from a consumer and carrier perspective under [Obamacare], an adjustment to the MLR formula for the impact of HSAs may be necessary.”

    Also, Obamacare’s “unreasonable rate increase” provision undercuts HSAs. As Heritage has explained before, “[H]igh-deductible plans require larger annual rate increases, because medical inflation has a greater impact on claim levels with higher-deductible plans. The larger rate increase might disqualify [high-deductible health plans] in general if the increase qualifies as an ‘unreasonable rate increase.’”

    Obamacare is government-directed health policy that poses a threat to successful consumer-directed health care.

    Posted in Obamacare, Ongoing Priorities [slideshow_deploy]

    7 Responses to HSAs Could Bring Health Costs Down; Too Bad Obamacare Destroys Them

    1. Bobbie says:

      Because Obama's nationalized health care shows no reasonableness, repeal. Because Obamacare discriminates favor through his unconstitutional health care policies, repeal. Because Obamacare is unconstitutionally changing the rule of law in reflection of his insurance tax payer plan, repeal. Because Obamacare constrains personal freedom in accordance to his government health care insurance with disciplinary acts, repeal. Because Obamacare infringes on personal liberties by his rendering service, repeal. Because Obamacare shows no certainty, repeal. Because all of what he promised is not going to come to be, repeal. Because the costs are unsustainable and impractical, repeal. Because everything the president has purposed and is purposing comes with the devil in the details, repeal! Because Obama and those that follow can hide all and take no accountabilities wherever government is in control, repeal. Because Obamacare can't be run on merit, repeal.

      Because the people have voiced better ideas the president takes note to effect through his rule, repeal. Because he is already making it hard to sustain private insurance, abusing his government authority by unconstitutionally imposing rules on private industries, businesses and medical clinics and hospitals, repeal. Because Obamacare requires "human compassion training" shows a direct admittance people aren't involved sincerely, as human compassion comes naturally and at no monetary measure. Because Obama snubs the will of the people and the want of the people to control their own, repeal. Please, for 30 million people who could be initiated to take full responsibility for their own, it isn't worth it! Unless there was misinformation or underlying information by the customer, it's against the law for private insurance to drop a customer. Instead of correcting any problems in the private sector, Obama is taking it over!! Stop him. This was never necessary or in favor of America(ns) as a whole.

    2. Neal Martin says:

      The part that you have left out is the fact that when consumers are in charge of their own healthcare, they often forego coverage all together. It does nothing to lower the costs of care itself. I think this is where the studies are finding much of their savings. It does nothing to improve the nation's health and may have an adverse effect. But who cares about that as long as there is more money to go around, correct?

    3. Victoria says:

      I loved the idea of the HSA with a high deductible insurance policy. My family had that arrangement until after the 'Affordable Care Act' passed. Within a year our premiums had increased 75% and it was just no longer affordable. We were faced with making a decision and opted for an HMO, which I don't really like, but is much more affordable. While on the HSA plan, I thought this was really the way to go, and was an option that should have been encouraged, especially to young families. We got into it later in life, but a young family just starting out could, with disciplined saving, be in a position to handle a health catastrophy with the money put aside for just that purpose. I guess it just made too much sense for our 'leaders' to comprehend.

    4. Dave Thomas says:

      Obamacare isn't about healtcare. It's all about concentrating as much power in the hands of the fewest possible people in Washington D. C.
      The really depressing thing about Obamacare is how many of my fellow Americans have more confidence in some stranger involved in the most intimate portions of their lives instead of embracing a completely private relationship between their doctor and themselves.
      The solution is to restore the direct relationship of patients paying doctors directly for service. Of course people say that is insane because of the expense. Of course it is not insane. It is the most sane solution because getting rid of the insurance companies and government intrusion would drop medical costs overnight.
      The proof of it all, the medical procedures that insurance companies and government aren't involved in, elective surgery, see their costs go down all the time.

    5. Bill at HSA Consumer says:

      They should eliminate the section of the law that requires a minimum deductible to be HSA eligible. Then, the insurance companies can create $0 deductible plans with 80/20% coinsurance to meet MLR and actuarial value requirements.

    6. Bobbie says:

      the whole thing has to be repealed. No reshaping of it. Government controlled Obamacare is filled with corruption and danger. It protects those on the side of it while ignorant to the protections once implemented and necessary to the patient and doctors who's work ethic is principled in favor of the patient. It's more work on the patients today than ever! Obama and the MRs. wants clinics and hospitals to provide horses for therapy for impractical foreigners focused on foreign preference at no cost to them, intolerant to anything that's available for everyone else. The Mrs. kicked the "poor" out of her hospital to avoid the necessary government payment, so the rich could fit the bill no matter how bad the service when she could've been more understanding to give her time and cut her pay to support the poor. A couple of insensitive, scary, disingenuous, overly priced people!

    7. cmj says:

      Do we know if the HSA's will be gone for next year?

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