Supporters of Health Savings Accounts (HSAs) are concerned about the impact of a proposed Health and Human Services (HHS) regulation arguing the rule could stifle, if not destroy, a portion of the HSA market.
Health Savings Accounts combines a high-deductible health insurance policy with a savings account that allows consumers to pay for the deductible from money in the account. The popularity of these plans have exploded over recent years with almost 13 million Americans turning to HSAs for their insurance needs. About five million of these plans are funded by individuals or small businesses and these are the plans affected by the proposed rulemaking.
Known as the "Medical Loss Ratio" rule, HHS is proposing to disqualify small business and individual HSAs from the health care exchanges created under Obamacare. Such an action would disqualify them under law forcing policy holders to lose their accounts. Such an action would undermine the president's pledge to allow American to keep their current policies if they want to once Obamacare is implemented.
Kevin McKechnie of the HSA Council in Washington argues rule will negatively impact the HSA market and cites a recent study as evidence. “HSAs were widely anticipated to be the low-cost bronze plans for consumers under the Patient Protection and Affordable Care Act,” said McKechnie. “The medical loss ratio requirements make this very difficult and the requirements with respect to HSAs need to be adjusted, as we have repeatedly advised Health and Human Services. We urge the U.S. Senate and the White House to prevail upon HHS to revise this rule to prevent politically difficult, unintended consequences.”