HHS Attacks HSAsSubmitted by GuyFawkes on Wed, 07/18/2012 - 22:43
Health Savings Accounts (HSAs) are a free market alternative to both government-run and crony-capitialist world of health insurance. They empower individuals to pick and choose their own health care options -- including natural remedies -- without approval of a bureaucrat. Perhaps most threatening to advocates of a public health care system, HSAs foster competition thus driving down the cost of health care services.
That's why it should come as little surprise that the Department of Health and Human Services (HHS) is pushing a scheme that would destroy much of the HSA market and would force five million Americans to find a different kind of insurance policy.
Truth be told, there are actually two schemes. The first changes the "Minimum Loss Ratio" Requirement.
Currently, the Minimum Loss Ratio requirement mandates that at least 80% of premiums collected by the health plan from small employers (under 50 employees) and 85% of premiums collected from large employers (50 or more employees) be spent on medical claims.
Because higher deductible health plans tend to have fewer claims (since the consumer rather than the insurer pays for the medical expenses under the deductible), and the insurance companies still have to pay fixed administrative costs regardless of the deductible, there may be pressure to sell health plans which have lower deductibles, and higher premiums that are not HSA-qualified. This will limit availability of HSA-qualified health plans for individuals and small employers and make HSA plans for individuals and small businesses ineligible for ObamaCare's health care exchanges.
The second change deals with the Actuarial Value requirement that sets the percentages of benefits covered by different levels of health plans and the corresponding levels of individual responsibility. For example, a “Bronze” plan must cover 60% of essential health benefits while 40% will be covered by the individual in the form of deductibles, co-pays and co-insurance.
The Actuarial Value calculations currently proposed by HHS do not give full value to HSA contributions, and may limit the availability of HSA-qualified health plans to individuals and small businesses since the higher deductible means less initial medical claims will be paid by the health plan. Again, this change makes many HSA plans ineligible for the exchanges.
The time to save the individual and small business HSA market is now. Congress needs to push HHS to do the right thing and live up to President Obama's commitment to never force anyone to change their policies if they don't want to.