On July 11 and 12, the House Ways and Means Committee marked up and passed 11 bills that will expand the use and availability of Health Savings Accounts (HSAs) for all Americans and would make other changes to the Patient Protection and Affordable Care Act (ACA), or Obamacare.  The bills considered were:

• H.R. 6301, “To amend the Internal Revenue Code of 1986 to provide high deductible health plans with first dollar coverage flexibility”.
• H.R. 6317, “To amend the Internal Revenue Code of 1986 to provide that direct primary care service arrangements do not disqualify deductible health savings account contributions, and for other purposes.”
• H.R. 6305, “Bipartisan HSA Improvement Act of 2018”.
• H.R. 6312, “Personal Health Investment Today (PHIT) Act”.
• H.R. 6309, “To amend the Internal Revenue Code of 1986 to allow individuals entitled to Medicare Part A by reason of being over age 65 to contribute to health savings accounts”.
• H.R. 6199, “To amend the Internal Revenue Code of 1986 to include certain over-the-counter medical products as qualified medical expenses”.
• H.R. 6306, “To amend the Internal Revenue Code of 1986 to increase the contribution limitation for health savings accounts, and for other purposes”.
• H.R. 6313, “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018”.
• H.R. 4616, “To amend the Patient Protection and Affordable Care Act to provide for a temporary moratorium on the employer mandate and to provide for a delay in the implementation of the excise tax on high cost employer-sponsored health coverage”.
• H.R. 6314, “Health Savings Act of 2018”.
• H.R. 6311, “To amend the Internal Revenue Code of 1986 and the Patient Protection and Affordable Care Act to modify the definition of qualified health plan for purposes of the health insurance premium tax credit and to allow individuals purchasing health insurance in the individual market to purchase a lower premium copper plan”.

Votes on amendments and the bills can be found here.

Health Savings Accounts operate like Individual Retirement Accounts.  Consumers can contribute funds tax free that are set aside and can build up over time.  HSAs allow people to pay for qualified medical expenses, such as doctor visits, x-rays, and prescription drugs, tax free.

For 2018, an individual can contribute up to $3,450 annually and a family can contribute up to $6,900 annually.  The HSA always accompanies a high deductible health plan (HDHP).  Generally, the deductible must be at least $1,350 for an individual and $2,700 per family.

HSAs have become very popular and give consumers purchasing power to shop around for healthcare services.  By doing so, a patient can get the care they want at a price they are willing to pay.  HSAs bring market forces to healthcare, which help to bring down costs and improve quality.  Emergencies, and other acute episodes, such as a serious illness, would be handled by the HDHP.  According to the national trade association, America’s Health Insurance Plans, HSAs have grown from 3.2 million in 2006, when they were first introduced, to 20.2 million in 2016.

The bills considered provide improvements and expansions of HSAs.  For example, H.R. 6199 would reverse the unwise policy of not allowing patients to purchase over-the-counter medications and other medical supplies with an HSA and H.R. 6306 would increase the yearly contribution to a HSA equal to the annual deductible and out-of-pocket expenses for a HDHP.  Another bill, H.R. 6309, would allow senior citizens only enrolled in Medicare A to continue to contribute to an HSA, something they cannot do now.

Other bills did not address HSAs but, would makes changes to Obamacare, such as H.R. 4616. The bill would retroactively strike the tax penalty for not complying with the employer mandate from 2015-2018 and delay implementation of the “Cadillac tax” on generous employer-sponsored plans until 2023.

The two-day hearing on Wednesday and Thursday was a rambunctious and contentious one, with Republicans declaring the bills provide more freedom, choice, and relief from Obamacare while the Democrats argued about fiscal irresponsibility, asserting the tax credits would increase the debt and that the bills would harm Obamacare.

CAGW’s lobbying arm, the Council for Citizens Against Government Waste, along with other conservative groups, supported the bills and hope the legislative package will be voted on before the August recess.  It will then be up to the Senate to move the bills forward and to President Trump’s desk for his signature.