Despite turmoil in the health care markets, there have been one unintended bright spot. ObamaCare has led to a significant increase in the use of Health Savings Accounts (HSAs). These consumer-driven health care plans actually reduce the price of health care by introducing competition for pricing — something sorely lacking in health care services today.
Despite the success, or perhaps because of it, the White House and Health and Human Services appears to be targeting HSAs ensuring that millions of Americans who are forced to use the ObamaCare Exchanges will be denied the option of choosing an HSA for their health care plan.
Health Savings Accounts are essentially a tax-free investment account whose proceeds are earmarked exclusively for medical expenses.
Your employer can contribute to your HSA, you can contribute (or anyone else for that matter) and you own the account and the money is yours even if you change jobs. Any unused money at the end of the year stays in your account to the next year, and can be used toward all health care expenses below your deductible. When your deductible is reached, your insurance policy then covers the health care costs. It can be even used for dental or vision costs for you or your family.
According to the 2014 census, enrollment in HSA accounts has soared to 17.4 million people. This is up from 10 million consumers in 2010 and according to data from America’s Health Insurance Plans (AHIP), enrollment has been growing at a rate of about 15 percent per year since 2011. This year, enrollment will exceed 20 million.
Making HSAs more popular and growing them by 10 million Americans was probably not of the “to do” list for ObamaCare.
Perhaps that is why the Department of Health and Human Services has issued a final new rule that would make it impossible for companies to offer HSA-qualified plans on the ObamaCare exchanges.
Twenty-two Senators wrote HHS demanding to know why they and the White House targeted HSAs for extinction by changing the rules.
HHS’s position is that they intended no harm, but as J. Kevin A. McKechnie of the HSA Council put it: “no harm was intended, leaving the path clear for us to point out that unintended harm is just as fatal.”
Also, some states peg all private plans to those in the Exchanges, meaning that if HSAs are not allowed in the Exchange, some states will not allow them to be sold in the private health care market.
In a letter to the Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt, 22 Senators demanded to know why the administration’s latest actions to limit health care choice. “Your agency took another step to potentially limit the utilization of HSA-eligible plans on the federally-facilitated exchanges (FFEs) by developing a ‘standard option’ for the 2017 plan year that imposes additional requirements on plans,” the senators wrote. “For a plan to meet the qualifications of one of the ‘standard options,’ it must conform to a uniform set of features related to deductibles, out-of-pocket limits, co-payments and coinsurance levels, and it must have a single provider tier.”
Currently, healthcare plans that qualify for HSAs will not meet the qualifications for the six uniform set of features under ObamaCare’s new “standard option” meaning that this type of consumer-driven option could be suppressed as individuals and families shop for health insurance coverage.
The senators noted that the plan would prevent an HSA from feasibly meeting these new requirements and asked CMS to explain what steps were taken to draft the requirements for the standardized option and to provide information on the number of individuals who are currently enrolled in HSA health plans on the federal exchanges and would lose their plan due to the “standard option.” This is yet another example of how ObamaCare has limited the ability for consumers to make their own choices when it comes to their health plans.
“Under current law, the very requirements to qualify as an HSA will in turn preclude an HSA from meeting the requirements on the new ‘standard option’ and limit consumers’ exposure to and choice of popular, consumer-driven health coverage,” the senators continued. “It is clear to see the potential disruption in consumer choice by creating the ‘standard option’ and limiting the types of plans that qualify for it to exclude HSAs.”
In addition to Senate Finance Committee Chairman Orrin Hatch, R-Utah, the letter also was signed by: Majority Leader Mitch McConnell, R-Ky., and Senators Chuck Grassley, R-Iowa, Mike Crapo, R-Idaho, Pat Roberts, R-Kan., Mike Enzi, R-Wyo., John Cornyn, R-Texas, John Thune, R-S.D., Richard Burr, R-N.C., Rob Portman, R-Ohio, Pat Toomey, R-Pa., Dan Coats, R-Ind., Dean Heller, R-Nev., Tim Scott, R-S.C., John Barrasso, R-Wyo., Jerry Moran, R-Kan., Ron Johnson, R-Minn., Marco Rubio, R-Fla., Roger Wicker, R-Miss., Kelly Ayotte, R-N.H., Jeff Flake, R-Ariz., John Boozman, R-Ark., and Steve Daines, R-Mont, Johnny Isakson R-G.A.