HSAs Under Attack
Three separate provisions in the statute, and regulations implementing the law, will reduce access to HSA plans:
- ObamaCare’s essential health benefits package contains new restrictions on deductibles and cost-sharing, which will prevent at least some current HSA plans from being offered.
- ObamaCare’s medical loss ratio regulations also impose new restrictions that studies show will hit HSA plans particularly hard, and could force individuals to change their current form of coverage.
- The ObamaCare statute does not specify that cash contributions made to an HSA will be counted towards the new federal actuarial value standards. And a February bulletin released by HHS in advance of upcoming rulemaking indicates that under the Administration’s approach, not all contributions into an HSA will count towards the new minimum federal standards – meaning some HSA policies will not be considered “government-approved.”
More from Chris Jacobs on ObamaCare’s negative effect on health coverage.
Obama doesn’t like individual empowerment? No surprise here.
I don’t mean to sound like I’m accusing them of being conspiratorial, but it could be that their long-term goal is to completely remove HSA’s.
I wonder whether: 1) the HHS regulations inadvertently constrain HSAs because well-meaning people didn’t think through all the ramifications of their regulations; 2) the HHS regulations intentionally inhibit HSAs because proponents of the regulations dislike the incentives HSAs promote.
The most egregious portion of the regulations is the one that does not include contributions to an HSA in the calculations of actuarial value. What’s the difference whether I buy “pre-paid” medical care by purchasing a comprehensive health plan; or if I buy a high-deductible plan and deposit an amount equal to my deductible into an HSA to cover my deductible?
The answer to my rhetorical question is (most likely) that opponents of HSAs dislike that healthy consumers pay lower premiums for high-deductible plans, and put funds into an HSA. Under this scenario, unused funds cannot be used to offset higher-cost enrollees in worse health.
I hope that they fix #1. I have a high deductible plan.
Buster:
It is my understanding that a portion of the HSA funds will be included in Actuarial Value, that portion which the insured is expected to use that year.
I agree that many people dislike the idea of healthy people paying lower premiums for high deductible plans.
This is short-sighted thinking for it is the low claimants that make the system work for the high claimants.
Under my plan, as it stands now with Milliman, people do have individual reserves to be used primarily for their medical expenses.
Unlike an HSA, these reserves are owned by the insurer.
However, the person gets credit for covering his deductible up to his reserve amount.
And, as far as pure catastrophic coverage goes, everyone pays for that, healthy and unhealthy alike.
Don Levit
Don, can you send me a contact email for yourself, so that I can learn more about your prepaid plan?
I have some actuarial background and have also sold health insurance. I will know what you are talking about.
Bob.hertz@frontiernet.net