White House Continues Call to Expand HSAs

Despite only lukewarm support in the Senate this year, the Bush administration will continue urging passage of legislation that would expand health savings accounts, or HSAs, as a solution to meeting the needs of America's under- and uninsured patients.

The accounts, which generally are paired with high-deductible, low-premium health plans, should allow individuals to receive the same tax advantages as businesses that provide health coverage to their workers, said Allan Hubbard, the president's assistant for economic policy and director of the National Economic Council, during the May 10-11 AAFP Family Medicine Congressional Conference here. Currently, businesses can deduct the cost of HSAs they offer to their employees.

"The president wants to set up a system so if people buy a health savings account on their own, they get the same tax advantages as employee-sponsored plans," Hubbard told participants. "The president wants a health savings account tax credit for everything up to the maximum out-of-pocket purchase."

Authorized by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, HSAs have been touted as a solution for small businesses and uninsured workers who cannot afford traditional health care plans. According to supporters, HSAs are designed to reduce costs through high-deductible health insurance that sensitizes patients to the price of health services. HSAs also allow workers to set aside tax-free money in savings accounts that carry over from year to year and that follow the worker from job to job.

If fully implemented, HSA proposals currently on the table would enhance the accounts' tax advantages, increase the amount that could be set aside and/or expand incentives to employers. They also would increase quality by publicizing physician and hospital prices and quality scores, say proponents.

Opponents contend that HSAs actually could boost the number of uninsured Americans by skimming the youngest and healthiest patients from traditional plans. Older or sicker workers then would be left in plans they could not afford because of skyrocketing premiums.

Moreover, opponents voice concerns that HSAs actually could increase the nation's health costs because patients, trying to protect the money in their HSAs, would skimp on preventive care that could help them avoid complications that would require high-cost treatment. Meanwhile, physicians would try to preserve their quality measures by declining to care for seriously ill patients, say opponents.

Not true, said Hubbard. "Insurance companies should reward people for follow-through" on physicians' treatment regimens, and quality measures should avoid punishing physicians who care for high-acuity patients, he told conference participants.

"There has to be a system that evaluates the acuity of the patient and takes that into account on the outcomes" measures, said Hubbard. "The last thing you want to do is discourage doctors from caring for the patients who need them most."

The debate has bogged down legislation now before the Senate Committee on Finance. Citing the lack of a filibuster-proof majority in support of HSAs, Senate Finance Committee Chairman Charles Grassley, R-Iowa, said in March he had no plans to push for the legislation to move forward this year.