Non-profit Obamacare exchanges are a bit fat failure, premiums and deductible continue to soar while benefits diminish, and now, Health Savings Accounts may get the ax.
For health insurance consumers with high deductibles, HSAs are a lifesaver. Contributing pre-tax cash to the HSA helps offset out-of-pocket costs.
Thanks to final Affordable Care Act (Obamacare) regulations published by Health and Human Services, individuals purchasing health insurance from the exchanges will no longer be able to utilize a HSA.
Grace-Marie Turner writes at Forbes:
Now, however, the Obama administration has published final regulations that “will make it impossible to offer HSA-qualified plans in the future” in the ACA exchanges, according to HSA expert Roy Ramthun.
The Department of Health and Human Services published final regulations last month that will make it virtually impossible for plans offered in the exchanges to comply with both HSA and ACA rules.
The new rule governs the “standard benefit designs” for Bronze, Silver and Gold plans in the exchanges. According to Ramthun’s analysis, the new rules mean that 1) the specified deductibles for the plans and out-of-pocket limits to be offered in the exchanges will be outside the requirements for HSA-qualifying plans, and 2) plans will have to cover services below the deductible which are not allowed under the legal definition of HSAs.
Ramthun believes it is unlikely any HSA plans will be offered in the exchanges in 2017 as a result.
HSA benefits extend beyond having cash set aside. As Turner points out, HSA enrollees are more likely to enroll in wellness programs, obtain the care they need, and save employers and medical providers money.
In 2014, the average monthly premium for HSA-qualifying insurance was $486 for single coverage and $1,142 for families, according to America’s Health Insurance Plans. States with the highest enrollment were Texas, Illinois, Pennsylvania, Ohio and Minnesota.
The average account balance at the end of 2014 was $1,933. Average account balances increased with the age of the owner of the account. Account balances averaged $655 for owners under age 25 and $5,016 for owners ages 65 and older.
A number of studies have shown that people with HSAs received higher levels of recommended care, were more likely to engage in wellness programs, reduced total medical costs, and were more savvy healthcare consumers.
One company found that consumer-directed plans saved employers $208 per member per year and that employees in these plans spent less on healthcare, while increasing their preventative care visits. This kind of innovation gives consumers the power to transform the health sector to offer higher quality and lower costs.
Enrollees in the Obamacare exchanges often pay $500 or more a month for premiums for policies with deductibles of $3,000-$6,000. That can mean spending $12,000 a year before insurance kicks in. Most might as well be uninsured.
The longer Obamacare remains in place, the few options health insurance consumers have.
UnitedHealth, the country’s largest health insurance provider, recently announced plans to withdraw from many Obamacare exchanges, leaving some 12 million consumers who purchase insurance from the exchange with one less choice.
But as we’ve discussed at length, few options, higher costs — they’re a feature, not a bug.
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