Consumer Directed Health (CDH) programs demanded attention across Congress this week as experts testified to the House Ways and Means Committee and the Joint Economic Committee on the ways that Health Savings Accounts (HSAs) and other CDH accounts can make health care for Americans more accessible and affordable.
Membership on both committees and from both parties widely agreed that HSAs and other CDH accounts are important tools to save and spend on medical expenses.
The conversations focused on how CDH accounts and High Deductible Health Plans (HDHPs) can help to increase consumerism in healthcare and create downward pressure on sky-high prescription drug, hospital, procedure and provider pricing.
Lowering Costs and Expanding Access to Health Care through Consumer-Directed Health Plans
In the House Ways and Means Committee, a hearing was held to discuss “Lowering Costs and Expanding Access to Health Care through Consumer-Directed Health Plans” on Wednesday, June 6.
Experts including Roy Ramthun, President of HSA Consulting Services, LLC, and Matt Eyles, President and CEO of America’s Health Insurance Plans (AHIP), gave testimony on the growth and benefits of HDHPs paired with CDH accounts.
You can also catch Roy Ramthun weighing in on the future of HSAs in our Legislative Landscape webinar, now available on demand.
Greater adoption of HSAs and other CDH programs by middle-income Americans in recent years was a focus of the testimony.
The testimony pushed back on the notion that HSAs are only for the wealthy and showed that middle-income Americans are using these triple tax-advantaged accounts to plan for current and future medical expenses.
CDH accounts were also discussed as an important tool to help consumers manage increasing deductibles. Both employers and consumers in the individual marketplaces are flocking to insurance plans with high deductibles in order to achieve affordable premiums.
In fact, the average deductible in all insurance plans sold is now higher than the minimum deductible requirement for HSA-qualified HDHPs. CDH accounts, and HSAs in particular, offer employers and individuals an effective way to set aside funds to cover their responsibility under the insurance plan.
The Potential for Health Care Savings Accounts to Engage Patients and Bend the Health Care Cost Curve
The Joint Economic Committee discussed “The Potential for Health Care Savings Accounts to Engage Patients and Bend the Health Care Cost Curve” on Thursday, June 7. The Joint Economic Committee includes members of the House and Senate and makes suggestions to improve the economy of the United States.
Testimony was offered on the ways that HDHPs help put Americans’ “skin in the game” when making healthcare decisions. Experts including Kevin McKechnie of the HSA Council and Tracy Watts of Mercer and the American Benefits Counsel discussed the latest data on adoption of these programs, usage of accounts, and the effect of these programs on healthcare expenditures.
Dr. Scott Atlas of the Hoover Institution discussed the evidence-based probability that consumers using their own dollars to pay for healthcare will force greater transparency in pricing and quality data. By encouraging greater transparency on pricing and quality, HDHPs and CDH programs have the potential to lower prices and increase quality measures throughout the healthcare market.
While the testimony focused on the long-term effects of greater adoption of CDH programs, testimony was also offered on the short-term benefits of an HDHP paired with an HSA.
Specifically, the importance of CDH programs in helping employers to manage costs and increase employee satisfaction. Additionally, the testimony looked at data emerging from the Healthy Indiana program to show the effectiveness of HSAs at all income levels.
While both hearings espoused the many benefits of HSAs and other CDH accounts, the testimony and questioning also highlighted several proposed amendments to the tax code that would make CDH accounts even more beneficial to Americans.
The suggested improvements include:
- Allowing recipients of Medicare, Tricare, Indian Health Services, and Veterans Health Care to contribute to HSAs;
- Increasing the maximum contribution level of an HSA to the statutory maximum out of pocket expenditure of the underlying HDHP;
- Expanding pre-deductible coverage under an HDHP to include services and medications to manage chronic illnesses;
- Giving employers the opportunity to offer on-site health clinics, telehealth and second opinion services to employees along with an HDHP; and,
- Allowing contributions to an HSA when a spouse is participating in an FSA.
The hearings in Congress this week show that our elected officials are still interested in improving HSAs and other CDH programs.