DC insurance exchange regulators look to future with health savings accounts vote
Members of the District of Columbia Health Benefit Exchange Authority (HBX) board recently voted to require that bronze-level health plans sold through DC Health Link for the 2019 coverage year and beyond are compatible with health savings accounts (HSA), LifeHealthPro reported.
For health plans to be HSA-compliant, they must comply with Internal Revenue Service (IRS) requirements for deductibles and annual out-of-pocket spending limits.
- Members of Congress and some of their employees are required to purchase health coverage through the ACA exchanges and many of these get their coverage through DC Health Link, a locally-run exchange with about 24,000 users.
The vote by the regulatory HBX board indicates they believe payers will still be selling health plans on exchanges when enrollment for 2019 begins. However, it also indicates they are taking GOP talk of health reform, which include a greater role for HSAs, seriously.
Several Republican lawmakers and President Donald Trump have suggested that future healthcare reform relies in part on expansion of health savings accounts. For instance, health reform plans introduced by House Speaker Paul Ryan (R-WI) and Sen. Rand Paul (R-KY) would both change the rules that regulate HSAs.
HSAs pair high-deductible health plans (HDHP) with tax-preferred savings accounts. In 2017, IRS rules for HSAs say that the HDHP component must have a deductible of at least $1,300 and limit annual out-of-pocket spending of $6,550. Families with HSAs can contribute up to $6,750 per year to the savings account component and these contributions do not count toward taxable income.
The idea behind HSAs is that they would encourage consumers to utilize certain healthcare services less to avoid the upfront costs. In theory, this could slow rising healthcare costs, but also protect consumers from personal costs associated with catastrophic events. Despite enthusiasm for expansion of HSAs among Republican lawmakers, critics argue that they wouldn’t help many low-income consumers all that much, as Michael Hiltzik wrote recently for The Los Angeles Times.
There is still a high degree of uncertainty surrounding ongoing health reform efforts. However, it is conceivable that future legislation would maintain insurance exchanges and push consumers to adopt HSAs.