Dive Brief:
-
The House Ways and Means Committee announced it will move forward with legislation this month that will expand health savings accounts and establish monthly tax credits to help consumers purchase health insurance.
-
This legislation would align with at least one of five principles of health reform espoused by President Donald Trump in his recent address to a joint session of Congress.
- Republican lawmakers are generally in agreement when it comes to broad components of healthcare reform, but are still unable to agree to specifics.
Dive Insight:
Forthcoming legislation from the House Ways and Means Committee will not be the first health reform plan to propose changes to HSAs. House Speaker Paul Ryan (R-WI) and Senator Rand Paul (R-KY) have both introduced legislation that would change the rules regulating HSAs.
HSAs, which are combined with high-deductible health plans, are intended to limit utilization of certain healthcare services while protecting consumers from costs associated with catastrophic events. Contributions to the actual savings account component are typically tax exempt and their contents are intended to help cover out-of-pocket costs. Legislation proposed so far would increase caps on tax-exempt contributions to HSAs.
Some evidence suggests that HSAs work as intended. One study found that patients with high-deductible health plans spend about $343 more annually than patents with traditional health plans and up to 10% less likely to use certain healthcare services. On the other hand, critics have argued that HSAs can put significant financial burden on patients who cannot make regular contributions.
If congressional Republicans are able to get healthcare reform legislation to Trump’s desk, it will likely include an expansion of HSAs and age-based tax credits. Regulatory agencies like the District of Columbia Health Benefit Exchange Authority have even begun preparing themselves for a shift in health policy. However, Republican leadership believes the window of opportunity for healthcare reform could be closing and may forge ahead with the most palatable plan of the moment, betting that other Republicans will go along with the now-or-never approach.