Friday, May 17, 2013

HSA's still on life support

At the risk of mangling metaphors, the water's still murky and the jury's still out on the fate of Health Savings Accounts [ed: "mangled?!" How 'bout strangled?]. I've contended for a while (most recently here) that, due to the "cost-sharing reduction" requirements which essentially outlaw true High Deductible Health Plans, HSA's are DOA.

In fairness, Bob disagrees (agreeably, of course); he's "becoming more convinced there is a viable market for major med (and ancillary lines) outside the exchange. Yes, the products will still need to provide EHB's and adhere to MLR ... but they will also have more flexibility."

But we're both speaking in generalities here; that is, about the marketplace as a whole. LifeHealthPro's Allison Bell has an interesting article today on a specific segment of the market: those who may be eligible for tax subsidies:

"Low-income people will still be able to use health savings accounts (HSAs) after Jan. 1, 2014 ... For low-income people who want to use HSAs, the problem is that getting help with paying deductibles could make it impossible for a "qualified health plan" ... An individual who would not be eligible for the tax advantages of an HSA because the plan variation to which he or she would be assigned does not qualify as a [high-deductible health plan] may purchase the plan without cost-sharing reductions," officials said"

Well how nice for them. But what about those of us in the middle class, who aren't going to be eligible for subsidies? I asked Allison if this proclamation applied to us, as well, and she kindly replied:

"I think the guidance here is just about low/moderate income people who are getting cost-sharing subsidies that would make having an HSA and getting exchange coverage mathematically impossible. I think regular folks could still have an HSA and a non-subsidized, non-cost-sharing-subsidized plan, because the deductible could still be high enough that the plan would be compatible with the HSA rules."

Can't fault her for honest reporting, but I'm still unconvinced. After all, the whole "skin in the game" nature of HSA plans is in direct - and stark - contrast to plans that have to include all manner of pre-defined benefits payable at 100% (such as birth control convenience items).

If the story is accurate (and I have no reason to doubt that it is), then folks who haven't traditionally been prospects for HSA-type plans will suddenly become the only ones who actually qualify for them. But the very characteristics which made them less than ideal prospects (eg "what's my co-pay?") haven't changed, and won't change in the "new" environment.

'Tis a shame, really.
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