On June 28, the House Ways and Means Committee held a hearing on health savings accounts (HSAs). HSAs are tax-preferred savings accounts for health care expenses that are usually coupled with high deductible health plans (HDHPs) and were created as part of the Medicare Modernization Act of 2003 (P.L. 108-173). Gary Lauer, chief executive officer of eHealthInsurance, testified that a 2005 study conducted by his company revealed that 42 percent of HSA purchasers are at least 40 years old, 45 percent of purchasers have incomes below $50,000, and 41 percent of purchasers were uninsured prior to purchase. The average monthly cost of an individual plan was $114; a family plan cost $261 per month.
Karen Ignagni, president and chief executive officer of American’s Health Insurance Plans, testified that more than 3 million Americans are covered by an HSA-compatible plan and that “this innovative approach to health care financing is helping a substantial number of previously uninsured consumers purchase coverage, accumulate savings for their future medical needs, and access preventive health care services.” Ms. Ignagni said that with their “strong focus on wellness, HSAs also include an opportunity for consumers to take an active role in deciding when and how much to contribute to their accounts and how to invest the dollars in their accounts. The funds that individuals withdraw from their HSAs to pay out-of-pocket health care costs are not subject to taxation. At the end of the year, any unspent funds in an HSA remain in the account and can be used to pay medical expenses in later years. This approach to health care financing creates incentives for consumers to make decisions about their health care while at the same time allowing them to accumulate assets to meet their future needs.”
Dr. Sara R. Collins, assistant vice president at the Commonwealth Fund, stated that “a recent study conducted by the Commonwealth Fund found that “one-third of those in HDHPs with and without [health savings] accounts had delayed or avoided getting health care when they were sick because of cost, nearly twice the rate of those in more comprehensive plans. Nearly half of adults in HDHP/HSAs with incomes of less than $50,000 reported delaying or avoiding care; this was nearly twice the rate of people in the same income group in more comprehensive plans.” Dr. Collins concluded her testimony saying, “Rather than insisting on minimum deductibles of $2,100 per family, our nation’s health policy should be geared toward setting maximum limits on family cost-sharing…Guaranteeing affordability of care for all Americans will help ensure that patients receive appropriate preventive care, detect serious conditions in early stages, and control chronic conditions that would otherwise undermine health and functioning and lead to higher costs later in life.”
Also testifying were Jeff Cava, executive vice president of human resources and administration, Wendy’s International; Harold Jackson, president, Buffalo Supply, Inc.; Larry Lutey, vice president of human resources, Lutheran Social Services of Illinois; and Jean Therrien, executive director, Neighborhood Family Practice of Cleveland.
