President Obama may claim that “if you like your current health care plan you can keep it” but his Department of Health and Human Services (HHS) hasn’t gotten the message. In fact, should new proposed regulations for Health Savings Accounts (HSAs) remain in place, over five million Americans will lose their current plan.
Proponents of government-run health care view Health Savings Accounts as the bane of their existence. They provide a health care based on individual responsibility with market-based accountability that drives down the price of health care services.
Nearly 14 million Americans enjoy HSAs and they are growing at an exponential rate. That appears to be a problem for HHS and the regime.
HHS has proposed new regulations that would force over five million Americans who have individual HSA policies to lose them. It’s not hard to make the case that Kathleen Sibelius and her army of bureaucrats are specifically targeting HSAs because they demonstrate that government is not the solution to our health care insurance ills.
It’s complicated but newly proposed regulations called “Medical Loss Ratio” now discriminates against HSA-qualified health plans by not allowing medical costs incurred by the patient below the deductible to be accounted for in the MLR formula. Given that 94% of those with an HSA will spend less than $5,000 in medical expenses annually, roughly only 6% of those with an HSA will be counted in the MLR formula.
These regulations threaten the ability to sell individual HSA policies and will kill the personal HSA market should the regulation not be changed or withdrawn. It’s hard to argue that the government doesn’t understand the true impact of the regulation. The real question is will five million Americans with individual HHS policies allow the government to limit their health care choices and deny them the opportunity to keep the plan they favor — despite President Obama’s promise.
The cleanest, simplest, most straightforward fix for this problem is to count patients expenditures below the deductible in the MLR formula for HSA-qualified health plans.