Sunday, November 23rd, 2014

Bob-O-Meter

Promote health savings accounts

"We will publish a list of all insurers who offer health savings accounts." 


Updates

List of HSA insurers was never created

Gov. Bob McDonnell promised to promote health savings accounts, which are used by those insured to pay for medical expenses, during his 2009 campaign.

Then, he said he would "publish a list of all insurers who offer health savings accounts."

In 2012, we found that this effort was Stalled while the governor waited for the Supreme Court to rule on the constitutionality of the Affordable Care Act, which was passed in 2010 and resulted in major changes to the health care system. And the federal bureaucracy had yet to decide whether HSAs would be viable under the health care reform law.

Paul Fronstin, director of the health research and education program at Employee Benefit Research Institute, said the federal government will permit HSAs.

"And actually, HSAs are likely to get nice bump as a result of the ACA," he said.

Large employers have said they are likely to move to HSAs in their health care plans, Fronstin said. Small employers will typically allow employees to pick plans on a health care exchange based on a certain level of coverage and consumer cost, denoted by different metals -- bronze, silver, gold and platinum. Employees will choose the plan they like from that tier and the plan may include an HSA component. Generally, in an exchange, HSAs would be coupled with a high-deductible health plan.

Under the Affordable Care Act, all plans must put a certain portion toward health care cost, which create some difficulties for HSAs. And all plans must have a baseline of coverage.

State officials are not sure any of the plans in the health care exchange for Virginia include an HSA.

"The uncertainty around the exchange leaves some unknowns about the value of high-deductible plans and whether they are allowable under the exchange," Secretary of Health and Human Resources Bill Hazel said. "We don't know if there will be any or not, so we can't promote them."

Certainly, following through on this promise was fraught with difficulties due to the implementation of the health care reform law. But McDonnell still receives a Promise Broken.

Sources:

Bob McDonnell, "McDonnell, Bolling and Cuccinelli Focus on Health Care," Sept. 10, 2009.

PolitiFact Virginia, "List of HSA insurers put on hold," April 20, 2012.

The Seattle Times, "A user's guide: 20 things to know about the Affordable Care Act," Sept. 21, 2013.

Forbes, "Health Savings Accounts Will Survive ObamaCare -- At Least For Now," March 27, 2013.

Interview with Paul Fronstin, director of the health research and education program at Employee Benefit Research Institute, Nov. 13, 2013.

Interview with Bill Hazel, secretary of Health and Human Resources, Nov. 13, 2013.

List of HSA insurers put on hold

Bob McDonnell highlighted the value of health savings accounts while campaigning for governor in 2009.

McDonnell said that as the state's chief executive, he would take steps to ensure more Virginians know about how to take part in HSAs -- savings accounts that are used to make payments for qualified medical expenses.

Started in 2003, the plans are linked to high-deductible insurance plans that provide a fall-back in the event of a catastrophic medical issue.

"We will publish a list of all insurers who offer health savings accounts,” McDonnell's campaign promised in a Sept.10, 2009, policy paper.

Accomplishing that goal is still a work in progress, said Taylor Thornley, a spokeswoman for the governor. She said the promise was stymied by passage of President Barack Obama's federal health care reform law, which was signed into law in March 2010 -- two months after McDonnell became governor.

Thornley said the state is awaiting final rules from the federal government on whether HSAs will be viable under the health care overhaul.

The issue may become moot if the law is thrown out by the Supreme Court, which recently heard arguments on the constitutionality of Obama's plan.

"Until we know whether the court upholds or strikes down federal health reform, it would be premature and imprudent to publish the list,” Taylor said in an e-mail. "If the court strikes down the law, we will very quickly publish the list because HSAs remain valuable tools.”

The White House has said HSAs will still be allowed in state exchanges created by Obama's health care reforms. In fact, the law even makes minor changes on how HSAs can be used. For example, the act increases the penalty for HSA withdrawals for costs that are not qualified medical expenses and it mandates that accounts can't be used for over-the-counter medication without a prescription.

But Roy Ramthun, a senior health care advisor to former President George W. Bush, says HSAs purchased by small employers and individuals could be endangered by other requirements in the health care act. Ramthun, who is now president of a consulting firm specializing in HSAs, laid out his argument in a March 25 article for the right-leaning Manhattan Institute.

He wrote that high-deductible plans for small businesses and individuals will have trouble meeting a mandate that their plans contribute at least 80 percent of premiums towards medical claims. The remainder would go to administrative costs and profits.

Ramthun wrote it's much more difficult for plans with high deductibles to meet that threshold when they are designed to pay only 60 or 70 percent of the cost of coverage.

The 80 percent requirement only pertains to policies sold by insurance companies. Ramthun said HSAs offered by larger employers generally will not be affected by the new rules because big companies are largely self-insured.

So the bottom line is that McDonnell has not published a list of insurers offering HSAs. The governor is waiting for the Supreme Court to decide whether Obama's health care reforms are constitutional before he acts. A spokeswoman said he's also seeking assurance that HSAs will still be viable under the new law.

While McDonnell waits, we rate his promise Stalled.

Sources:

McDonnell for Governor, "McDonnell, Bolling and Cuccinelli focus on health care,” Sept. 10, 2009.

Interview with Taylor Thornley, spokeswoman for Gov. Bob McDonnell, March 27, 2012.

E-mail from Taylor Thornley, April 10, 2012.

Interview with Matt Cobb, Virginia's deputy secretary of health and human resources, March 27, 2012.

Interview with Roy Ramthun, former senior health care adviser to George W. Bush, April 12, 2012.

Medical Progress Today.com, "Do health savings accounts have a bullseye on their back?” March 25, 2012.

The Plain Dealer, "Health care fact check: health savings accounts,” Mach 31, 2010.

Secretary of Health and Human Services Secretary Kathleen Sebelius op-ed in the Washington Post, "How the Affordable Care Act empowers states,” Feb. 10, 2011.

HSA Consulting Services, LLC, "MLR regulation creates challenges for future affordable coverage,” December 2011.

Interview with Paul Fronstin, director of health research programs at the Employment Benefits Research Institute, April 11, 2012.

Interview with Devon Herrick, senior fellow and health economist at the National Center for Policy Analysis, April 11, 2012.

Heritage Foundation, "More Americans using HSAs -- under threat from Obamacare,” June 22, 2011.

Kiplinger, "What health reform means for FSAs and HSAs,” March 31, 2010.

Department of Treasury, "Resource Center,” accessed April 10, 2012.

American Bankers Association, "Milliman study highlights the impact of medical loss ratio rules on HSAs,” Feb. 13, 2012.

Kaiser Family Foundation, "What the actuarial values in the Affordable Care Act mean,” April 2011.

HSA Consulting Services, "About Us,” accessed April 19, 2012.