ObamaCare signals big role for Health Savings Accounts
contributed by: Dan Perrin, Executive Director of the HSA Coalition
Despite getting clobbered in the fiscal cliff negotiations, Republicans have something to celebrate this year – the survival of health savings accounts, or HSAs. They had feared that President Obama would obliterate this critical cost-saving tool. Sure, the president had promised that ObamaCare would not bar HSA-qualified plans from health insurance exchanges. But we had our doubts.
Fortunately, we were wrong.
A new regulation from the Department of Health and Human Services should put Republican fears to rest. Issued in November, the Department’s proposed Actuarial Value Calculator has been tested and re-tested. Republicans and HSA experts can conclude only one thing from this mathematical tool: ObamaCare is safe for HSAs.
HSAs are accounts that allow the owners of high-deductible health insurance plans to save tax-free for medical expenses. HSA-qualified plans offer low monthly premiums, which has made them the fastest-growing type of health plan in the United States for the past four years. If initial results from private health exchanges operating in Minnesota are any indication, more than half of insurance buyers want an HSA-qualified plan.
Republicans have lauded HSAs for years, both as a way to bring choice and savings to individual consumers, and as a method for keeping overall health care expenses from spiraling out of control.
The White House and Department of Health and Human Services appear to have also concluded, rightly, that for the health exchanges to work, the option to choose low-cost, HSA-qualified health plans must be preserved.
No one has been more caught off guard by this conclusion than primed-for-battle political operatives like myself. In fact, the proposed health care regulations embodied in the Actuarial Value Calculator are so fair and reasonable that much of the Republican health care policy apparatus has been stunned into silence — perhaps accounting for how little we’ve heard about the new regulation.
Literally, with one draft rule, and indications that other draft rules will also permit HSAs, the Department has silenced a huge chorus of Republican critics of the President’s health care plan. On Capitol Hill, health care aides to Republican Senators and Congressmen are asking, “what do we say now?” You can hear the delete button being pressed on whole paragraphs of stump speeches pounding ObamaCare.
In a Washington, D.C., board meeting a few weeks ago, I heard this HHS rule being described as “the best Jedi mind trick, ever.”
Assuming the rules don’t change, the implications are enormous. Inside the beltway, it means a new era of détente has broken out in at least one corner of the health care wars. Republicans can say that one of their signature health care policies has been preserved under ObamaCare. Democrats can point out that the President kept his promise.
More important is what happens outside the beltway. Across America, current HSA owners will get to keep the plans they have. HSA-qualified plans will remain the least-expensive type of health insurance policy on the market. And Americans will have more health care choices than we thought they would.
It’s not often in Washington that we get to say “everybody wins,” but this is that rare occasion.