America is facing a health care affordability crisis that threatens the financial security and well-being of millions. Over the past two decades, healthcare costs have surged by 188 percent, while wages have grown by only 84 percent. This widening gap is forcing families to make painful trade-offs – choosing between necessary medical care and basic needs like housing, education, or food. By 2032, the American family could be spending nearly 40 percent of their income on health insurance premiums alone.
This is unacceptable. The Senate has the opportunity to make a real change, one that will improve access and affordability of healthcare for 20 million Americans. By including the House-passed Health Savings Account (HSA) expansion policies in the reconciliation bill, lawmakers can take meaningful steps to address this affordability crisis.
Health Savings Accounts (HSAs) are one of the most pro-consumer, pro-patient tools available today. An HSA is owned by the patient, allowing Americans to save their hard-earned tax dollars, is a vehicle for growing their savings, and gives the owner the freedom of portability because it is not tied to a specific job. Most importantly, they empower the owner to make the best choices for their care. It is no surprise that HSAs are extremely popular, with over 35.5 million HSAs, covering nearly 72 million people.
While HSAs promote consumer-driven healthcare, they also encourage more modest healthcare spending, helping lower exorbitant costs in the American healthcare sector. One study found that HSA enrollees spent up to 7 percent less than non-HSA enrollees on total healthcare expenses and up to 9 percent less at the pharmacy. Another plus for enrollees, HSA plans often have the lowest monthly premiums and competitive deductibles when compared to employer and government-run plans, like Obamacare.
Despite all the positives associated with HSAs, they are underutilized due to outdated rules and arbitrary restrictions put in place over 20 years ago. Currently, HSAs are only used in conjunction with low-premium, high-deductible health insurance plans (HDHPs); the House-passed reconciliation bill expands access to new groups, broadens and clarifies the types of care covered, and increases contribution limits for working families.
If the Senate does the right thing and includes HSAs in reconciliation, millions of their constituents would have access to these accounts, including seniors who would be allowed to continue contributing to an HSA after enrolling in Medicare. At a time in their life when many are on fixed incomes, having more flexibility and reducing pressure on the Medicare system is a win for all.
While the House bill addresses the fact that many Affordable Care Act (ACA) plans have high deductibles but are not paired with HSAs by deeming catastrophic and bronze marketplace plans HSA-eligible, CAHC encourages the Senate to go further. Lawmakers should include silver plans, which often have deductibles twice as high as those paired with HSAs.
Additionally, outdated IRS rules prohibiting patients from using HSAs to pay for direct primary care services must be updated. The House bill removes this barrier, allowing up to $150 per month in HSA funds to be used for these cost-effective, access-enhancing arrangements. HSA owners should also be allowed to use their HSA at employer-sponsored on-site clinics. This will increase access to primary care and reduce unnecessary visits to more expensive care settings, like hospitals.
By including these reforms in reconciliation, the Senate would give 20 million more Americans control over their health – a perfect complement to President Trump’s ‘Make America Healthy Again’ initiative.
We urge the Senate to seize this moment – don’t waste this opportunity of a lifetime to make an immediate impact on the health and financial stability of our country.