Health Reform: Health Savings Accounts are a proven free-market health-reform idea. No wonder the Obama administration has been trying to kill them off. This year, it might finally succeed.
HSA plans have become increasingly popular as companies and individuals realize their benefits. Instead of paying high premiums for low deductibles, HSAs offer high-deductible, low-premium plans that let people put money aside tax-free for out-of-pocket expenses. Any money left over is theirs to keep.
Democrats have long hated HSAs, mainly because they entrust consumers to make decisions about their own health care and finances, but Republicans managed to get them authorized starting in 2005. In the past seven years, enrollment has climbed 18% a year on average. Today, there are almost 20 million enrollees who have more than $24 billion in their HSA accounts. Even the number crunchers in the Health and Human Services Department admit that these “consumer-directed” health plans are helping to hold down costs.
Conservatives worried that Democrats would use ObamaCare to kill off HSAs by writing rules for what constitutes a “qualified health plan” in such a way that HSAs — which have to comply with their own set of rules — couldn’t possibly meet.
In the first year, that didn’t happen. In fact, Merrill Matthews, a longtime HSA supporter, said the “qualified health plan” rules issued by the administration in early 2013 were “great news” and that HSA plans could end up being the favorite option in ObamaCare exchanges.
Now it appears as though the administration has succeeded in quietly killing off HSAs, at least in the individual market.
As HSA expert Roy Ramthun explained in a National Review article, the Obama administration’s new set of rules on March 8 detailing what constitutes a “qualified health plan” in an ObamaCare exchange will make it “impossible to offer HSA-qualified plans in the future.”
According to Ramthun, the rules require deductibles and out-of-pocket limits that conflict with requirements for an HSA plan. And the plans now have to cover services below the deductible that HSAs aren’t allowed to pay for.
Now, Ramthun says, “it is only a matter of time before HSA-qualified plans completely disappear.”
If Ramthun is right, then Republicans must not let this happen without a fight. HSAs are popular, they are delivering as promised (unlike ObamaCare), and they are a model of free-market health reform. The Obama administration must not be allowed to kill them off in the dark of night.