The Trump administration is encouraging the expansion of Health Savings Accounts as a way to help consumers have more power in healthcare markets and reduce the cost of insurance.
Senior administration officials announced the proposal among more than 50 other recommendations it put forward in a report titled “Reforming America’s Healthcare System Through Choice and Competition.” The recommendations include actions the administration could take, while others would require an act of Congress.
“We want maximum consumer choice of insurance products,” an official on the call said when presenting a handful of the provisions in the report.
Health Savings Accounts, or HSAs, can be filled with workers’ pre-tax earnings up to a limit. As with tax-deferred Individual Retirement Accounts or IRAs, the funds placed in HSAs can be invested long-term, but they also remain completely tax-free as long as they are used to pay medical expenses.
Under federal law, HSAs must be paired with health insurance plans that have high deductibles, but a quirk in Obamacare’s language has made it illegal to use them with catastrophic insurance plans.
Officials recommended allowing more health insurance plans to offer HSAs, allowing people to use HSAs toward the payment of their premiums, allowing people in Medicare to have them, and allowing people to contribute a greater amount of money to the plans. Under the current requirements HSAs are limited to $3,450 for an individual and $6,900 for a family.
The Trump administration argues in the report that expanding HSAs will encourage patients to shop around for lower-cost healthcare. It notes that certain parts of healthcare require emergencies, but said that changes can be made to portions of the medical system that include more routine procedures, tests, and appointments.
The report, assembled by 10 different agencies and offices, centered on four areas of state and federal rules that it said “inhibit adequate choice and competition.” Some of the other requests included giving certain types of medical providers, such as physician assistants and nurse practitioners, more leeway in the types of services they can offer, and allowing more doctors to use telehealth. It also recommends that more practices set up payment arrangements that encourage them to deliver better care at a lower price.
Authors of the report place blame for the issues the healthcare system faces in reduced choice, competition, and high prices on government regulations, saying they have “encouraged excessive third-party payment, created counterproductive barriers to entry, incentivized opaque pricing practices, skewed innovation activity, and placed restrictions on the reimbursement policies of government programs.”
The report goes on to detail health industry mergers and the way that hospitals are buying up private doctor practices. It recommends letting patients directly pay medical providers other than doctors and dentists for the care they provide. The process for getting insurers licensed in more states should be sped up, the administration said, and doctors should be allowed to be licensed to practice in other states through telehealth.
The report is the result of an executive order Trump issued more than a year ago, which also spurred agencies to develop changes in the health insurance marketplaces. After the order was issued, the Trump administration re-extended the length of time people could be signed up for short-term plans, and created rules around association health plans that allow workers to band together for the purpose of obtaining medical coverage.
The short-term plans are already on sale in most states, and while they are cheaper than Obamacare for certain customers, they don’t cover the same range of care. For instance, someone who previously had cancer can be turned away from coverage, and a patient with diabetes wouldn’t be able to have insulin covered.
The Trump administration reiterated its desire for Congress to overhaul Obamacare, a change that isn’t likely until at least through 2020 because Democrats will control the House starting in 2019. It calls for Congress to repeal the employer mandate that obligates companies with 50 or more full-time workers provide coverage to their employees. A second part of Obamacare that blocked doctor-owned hospitals from expanding should also be repealed, officials said.
