Tag: "HSA"

A Brief History of Health Savings Accounts

Devon Herrick, a senior fellow at the National Center for Policy Analysis (NCPA), writes:

  • Idoctor_with_piggy_bankn January 1984, the NCPA published a plan to use individually-owned “medical IRAs” to solve the long-term problem of Medicare.
  • Two months later, NCPA President John Goodman and Richard Rahn, then chief economist for the U.S. Chamber of Commerce, outlined this plan in a Wall Street Journal article.
  • That same year Singapore introduced a mandatory “Medisave” program.

Goodman and Senior Fellow Gerald Musgrave wrote a seminal study documenting opportunities in the United States to select high-deductible health insurance and place the premium savings in a personal health account to pay for small medical expenses.

In 1990, the NCPA organized a taskforce of researchers from 40 think tanks, universities and research organizations, including the American Enterprise Institute, the Cato Institute and the Hoover Institution. The report advocated self-insurance for small medical bills through Medical Savings Accounts (MSAs).

Capitol Hill responded quickly. In 1992, 12 different bills designed to create Medical Savings Accounts received the bipartisan support of 150 congressional cosponsors, including both conservatives and liberals. (More)

Hits and Misses

HSA piggy bank 300Contrary to industry concerns, HSA-qualified plans are widely available, attractively priced, but may be hard to identify on ACA exchanges.

The economy performs better under Democrats, but not because of anything Democrats actually do.

A defense of narrow networks. (A weak defense in my opinion.)

Could ObamaCare Be a Boon for Health Savings Accounts?

Based on data available for about 85 percent of exchange plans, about 77 percent have deductibles of more than $1,250 and qualify under Internal Revenue Service rules for a health savings account. For a 27-year-old purchasing coverage, the median HSA-eligible plan costs about $238 a month and typically comes with a deductible of about $3,600. The median plan without a high deductible, however, costs almost 30 percent more ($310) for a 27-year-old, though it has a significantly lower deductible (about $600). (More)

Major Breakthrough; Timid Step Forward

This is something the Bush Administration never was willing to even consider

The Obama administration loosened rules governing health-care savings accounts known as flexible-spending arrangements, or FSAs, allowing consumers to roll over as much as $500 in unused funds each year. (WSJ)

health-savings-account-bankThis means the accounts will partially function just like Health Saving Accounts. Employers potentially will be able to put up to $500 in an account for every employee and let that integrate with an overall health plan with none of the restrictions that hamper HSAs.

This is 35 million people, in addition to the 30 or so million that already have an HSA or HRA.

But why only $500? Why not the full amount? $2,500 is the new allowable contribution.

What Large Employers Are Doing

They’re sending their employees to private exchanges, armed with HSAs and HRAs:

Employers are raising deductibles, giving workers health savings accounts that look like 401(k) plans, mimicking the health law’s online insurance marketplaces and nudging patients to compare prices and shop around for treatments. Together the moves could eventually affect far more consumers than the law’s Medicaid expansion or health exchanges aimed at the uninsured and scheduled to open Oct. 1. (Kaiser Health News)

See Walgreen and others.

15.5 Million People Have a Health Savings Account


Source: AHIP.

What Works Better: Bureaucracy or Markets?

Aaron Carroll and Austin Frakt relate the problem:

Over the past decade, the number of reimbursed eyelid-lift procedures has tripled. The cost to taxpayers has quadrupled, to $80 million from $20 million.

Medicare traditionally avoids coverage for cosmetic procedures such as Botox or breast augmentation (except after medically necessary breast removal). So why cover eyelid lifts? It’s possible that more of the elderly are suffering real vision problems in need of corrective surgery.

But is it likely that a disproportionate number of these patients live in one state? More than half of the 20 highest-billing physicians were in Florida, where one doctor submitted for 2,200 eyelid lifts in 2008 alone.

Their solution: better Medicare oversight.

My solution: Get Medicare completely out of the business of eyelid lifts. Let patients pay for all such procedures from their Health Savings Accounts.

Liberating Health Savings Accounts

Senators Orrin Hatch (R-UT) and Marco Rubio (R-FL) have introduced legislation to eliminate many of the restrictions currently placed on HSAs and FSAs. For instance, the bill would allow HSA accounts to be used to pay health insurance premiums. The bill allows eligible spouses 55 and older to make HSA catch-up contributions to the same HSA account and it allows Medicare beneficiaries to contribute to HSAs after age 65. Also, Medicare beneficiaries in an MSA plan will be able to contribute their own tax-deductible money to their MSAs.

Ramthun on HSAs for the Military, and Other Links

Roy Ramthun asks: why can’t the military and their families have Health Savings Accounts?

P4P in Australia: Physician behavior didn’t change.

Can you cure yourself by just thinking?

Britain doesn’t prove the Keynesians are right; it proves they are wrong.

Headlines I Wish I Hadn’t Seen

Tax-exempt hospitals spend an average of 7.5% of their operating expenses on community benefits.

First the “doc fix”; now a hospital fix.

Will regulations make HSA plans unattractive under ObamaCare?