Bills Would Cover More Services below the Deductible on HSA-qualified Plans

The 117th Congress has yet to act on a handful of Health Savings Account bills. The hour is growing late.

Members of Congress have left Washington, DC, through the Nov. 8 mid-term elections to campaign for their own re-election or to help fellow party members win seats in the House of Representatives or Senate. They'll reconvene sometime later this year, perhaps after Thanksgiving, for a lame-duck session that may, depending on whether one or both chambers of Congress flip from Democrat to Republican control, be largely ceremonial or legislatively meaningful.

Congress must pass a final federal budget (the fiscal year began Oct. 1) before the end of December. Depending on the political dynamic and composition of the incoming 118th Congress, we may see a tax or healthcare bill. Proposals to strengthen Health Savings Accounts or correct technical issues would be germane to any such bills.

As a blueprint, in 2016, after Republicans consolidated control of both chambers of Congress and the presidency, the two major parties passed the 21st Century Cures Act, a far-reaching medical bill that included funding for cancer research and was considered a retirement gift to Vice president Joe Biden, who was expected to return to his Delaware home into retirement.

If our elected representatives choose an active lame-duck session, they won't lack for ideas - and legislative language already written - to strengthen Health Savings Accounts. A number of bills have been introduced in the 117th Congress already. Most are short, and any could be slipped into a spending, tax, health, or grab-bag bill and become law. Below are the bills related to Health Savings Accounts that have been introduced this session.

Common Themes

As you read, notice that each proposed piece of legislation reflects one or two common themes:

1. The cost of care is expensive and may affect families' ability to pay for necessary care.
2. A deductible is a rather blunt instrument. When all services except select preventive care must be applied to the deductible, insurers and employers can't distinguish between high-value and low-value care.

These are valid concerns. We can improve health by allowing coverage for certain high-value services below the deductible so that patients face no or small financial barriers to care - particularly services that keep chronic conditions in check and patients out of the hospital.

Chronic-Care Treatment as Preventive Care

A Senate bill would define certain treatment for chronic conditions as preventive care if the cost is small and the treatment is proven to be effective in managing a chronic condition or preventing the occurrence of a secondary condition related to the chronic disease. Defining such treatment as preventive would allow insurers and employers to cover the services below the deductible (low or no patient cost-sharing) on an HSA-qualified plan. The idea is that by reducing financial barriers to care, more patients will become compliant and manage their conditions rather than require expensive treatment of acute symptoms.

Impact: Proponents of this concept believe that the benefits of this bill (avoiding expensive medical intervention by reducing the probability of acute phases) outweigh the costs (less patient cost-sharing and thus slightly higher premiums as the cost of treatment is spread across all plan enrollees).

No cost-Sharing for Certain Chronic Conditions

This bill goes one step farther, mandating that accepted treatments for heart disease, osteoporosis, diabetes, hypertension, depression, bleeding disorders, and other diseases be covered in full.

Impact: This bill would raise premiums because these conditions are among the most prevalent among Americans. Eliminating patient cost-sharing spreads the full cost of treatment across the entire population of enrollees. The extent of the financial impact depends on how effectively the absence of patient financial barriers prevents acute episodes.

Full Coverage for Primary and Behavioral-Health Care

Bills introduce in both the House and Senate mandate that insurers and employers cover in full all services delivered by primary-care doctors and behavioral-health providers. This is a broad approach to eliminating patient financial barriers. The idea is simple: This is the most cost-effective and medically effective care and often saves dollars of acute care by investing pennies in low-cost clinical intervention.

Impact: This bill would reduce cost-sharing on a high volume of office visits. Services that normally would be applied to the deductible - with patients' paying $60 to $200 for each visit - would be covered in full. That cost would be spread across all enrollees. The savings in acute care not needed would have to be substantial not to increase premiums.

Full Coverage for Pediatric Care

A bill filed in the House would require group medical plans to cover all pediatric outpatient care in full, including care delivered by a primary-care physician, a specialist, or a behavioral-health provider. As the statute is written, it may be even more broad ("any item or service furnished to an individual under the age of 18 as an outpatient by a health care provider acting within the scope of such provider’s license") and include imaging and outpatient (day) surgery.

Impact: Although children on average don't incur high claims, this bill would increase premiums by covering in full, at a minimum, all office visits for children under age 18. The transfer of financial responsibility from patients and their families to employers and employees may be modest or substantial, depending on final definitions.

Full Coverage for Limited Pediatric Services

This proposed legislation would provide full coverage for three pediatric office visits and three pediatric behavioral-health visits. This concept of a limited amount of office visits covered in full has been popular since the introduction of HSA-qualified plans and rising office visit copays in other coverage. The idea is to erect all financial barriers to care for basic services that a family should access to diagnose an ear infection, a sprained ankle, or a behavioral-health condition. President Biden has included a similar measure in his proposed 2023 federal budget.

Impact: This idea has found an audience for years because families don't have to worry about the financial cost of an occasional unexpected trip to receive basic care for a child. The scope of the bill is limited to a handful of visits only, so the effect on premiums should be minimal.

The Bottom Line

The laws that define how services are covered on an HSA-qualified plan don't allow for sufficient flexibility to reduce barriers to high-value care These bills represent various attempts to increase insurers' and employers' flexibility to improve patient health and reduce the long-term cost of care. Some are broader than others, and most are prescriptive (requiring, rather than permitting, insurers and employers to cover services in full). In that sense, they don't provide true flexibility to insurers and companies to craft their benefits packages to address their identified cost-drivers. And it's questionable whether the long-term savings in fewer acute episodes will make up for the higher premiums that the proposals may generate.

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