Now Is the Time for Personalized Health-Care Reform
NATIONAL REVIEW — As health-care costs soar, working-class families take the biggest hit. Let’s fix that with greater access to health savings accounts.
Another open-enrollment period, another year in which health care will become more expensive. Call it adding insult to injury: Not only are Americans paying more these days for gas and groceries — in 2024, they’ll experience the pain of the biggest surge in health-care costs in more than a decade, with prices expected to jump an average of 6.5 percent.
This increase will inevitably be shouldered by families through higher monthly premiums, elevated deductibles, and involuntary out-of-pocket expenses.
Because of inflationary government subsidies, health-insurance premiums have nearly doubled since 2011 and deductibles have tripled. These rising costs hurt lower-income families the most. For them, paying more for health insurance often means passing on other goods and services they need.
Fortunately, relief is on the horizon. We have introduced the ACCESS Act, a transformative proposal that would empower approximately 5 million lower-income Americans to regain control of their health-care finances. This legislation would create a new “HSA option” allowing individuals enrolled in subsidized health-care plans to redirect a portion of their subsidies under the Affordable Care Act — commonly known as cost-sharing reductions (CSRs) — into a tax-advantaged health savings account (HSA). Instead of these funds being controlled by insurance companies, our proposal places control of the money in the hands of patients. Participation is completely voluntary, allowing Americans satisfied with their current arrangement to remain where they are.
Americans. There are now an estimated 35 million accounts with a staggering $116 billion in total assets available for people to use for medical expenses.
Account holders can use tax-advantaged HSA funds to pay for out-of-pocket medical expenses for themselves, their spouses, and their dependents. According to the National Bureau of Economic Research, these consumer-directed health plans reduce health-care costs and act as a vital check against surprise billing.
Unfortunately, roughly 90 percent of Americans are effectively blocked from opening an HSA. Current government rules only allow Americans to have an HSA if they are enrolled in a “high-deductible health plan” that meets prescriptive federal criteria.
Broadening access to HSAs is essential to any health-care reform centered on giving Americans personalized options. With health-care costs soaring, the time to act is now. Almost nine in ten voters say that any American should be able to open a HSA. That’s why we are taking this step to eliminate a key barrier between lower-income patients and the ability to meet their families’ medical needs.
Far from being “only for the healthy and wealthy,” HSAs are ideal for lower-income and middle-class families and people with chronic medical conditions. For these Americans, using a tax-free HSA effectively provides a 10 to 40 percent discount on every out-of-pocket medical purchase they make.
HSAs can cover co-pays and deductibles. And because HSAs can be used for any qualified medical or dental expense, they enable people with chronic conditions to obtain items and services their insurance may not cover, such as certain prescription drugs.
Of course, for lower-income folks, funding an HSA can be a challenge. The ACCESS Act would help them access the same quality care as wealthier Americans by shifting some existing subsidies to them and away from insurance middlemen. And the bill would also make federal insurance subsidies more efficient, saving taxpayers an estimated $30 billion, according to the nonpartisan Congressional Budget Office.
When people exercise control over their health care, it translates to lower costs and expanded coverage. Research shows HSAs foster cost savings and promote “increased price consciousness among patients.” This encourages health-care providers to be transparent about prices, creating competition that leads to lower prices and higher quality.
The ACCESS Act is a potential game-changer for millions of American families and takes the right approach to transforming our nation’s health-care system for the better. That’s why groups like Americans for Prosperity support the bill. While the reform applies only to individuals enrolled in ACA exchange plans, its benefits can extend beyond an individual’s open-enrollment period. As HSAs never expire, people can carry these funds with them, even after transitioning from an exchange plan. This will ensure that health-care dollars are put to the best possible use.
Lower-income Americans shouldn’t be trapped in a one-size-fits-all program. They deserve the power to select the health care that best suits their needs, and the ACCESS Act takes a big step toward giving it to them.
