CAHI Issues: Health Savings Accounts
The concept of consumer-directed health care - a model that engages the consumer more directly in health care purchasing decisions - has gained significant attention in recent years, most notably in 2003 when Health Savings Accounts (HSAs) were signed into law by President Bush as part of the Medicare Modernization Act.
HSAs are essentially comprised of two parts - a high-deductible health insurance policy (HDHP) and an investment or savings account. The high-deductible policy protects the insured from the cost of a catastrophic illness, prolonged hospitalization or a particularly unhealthy year. The savings account is controlled by the insured and is intended to pay small and routine medical bills and save for future health care expenses. Funds may be contributed by both an employee and an employer, and contributions are tax deferred.
The Council for Affordable Health Insurance (CAHI) strongly believes that offering consumers choice and promoting responsibility are integral components to increasing access to affordable health care. HSAs are an affordable insurance solution for many, they give consumers more control over how they spend their health care dollars and encourage people to be value-conscious health care shoppers.
CAHI Solutions
CAHI opposes the out-of-pocket spending restrictions or mandated benefits that prohibit adoption of HSAs in some states. These barriers should be eliminated for those who take a qualified HSA policy. Legislation proposed by the Bush administration (H.R.37) would expand HSAs by making the insurance policy tax deductible, making them even more attractive as an alternative to traditional health insurance.
Legislative Resources
The Health Insurance Affordability Act of 2005 - H.R. 37 (H.R. 37 replaces H.R. 3901 which was introduced in the 108th Congress)
CAHI letter of support for H.R. 37
The Health Opportunity Patient Empowerment Act of 2006 - H.R. 6134
CAHI letter of support for H.R. 6134
Health Care Choices for Seniors Act of 2005 - H.R. 4551
CAHI letter of support for H.R. 4551
Affordability in the Individual Market Act - S. 2554
CAHI letter of support for S. 2554
HSA Accessibility and Portability Act of 2006 - H.R. 5475
CAHI letter of support for H.R. 5475
Tax Free Health Savings Act of 2006 - H.R. 5262
CAHI letter for H.R. 5262
For More Information
CAHI's HSA Info Center - FAQs, publications, IRS guidance documents, and more
"Answering Your Questions about Health Savings Accounts" - CAHI's Issues & Answers n.125
Health Savings Accounts: Off to a Fast Start in the Individual Market - AHIP Center for Policy & Research, January 2005
HSA Insider - a website designed to answer HSA questions from individuals and employers
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