NCPA - National Center for Policy Analysis


March 5, 2010

While Congress has been debating health reform, employers have been creating new consumer-driven health care plans.  In fact, CDHC plans are the only type of health insurance that has been shown to reliably change patient and doctor behavior in ways that lower costs and improve the quality of care, says Ronald E. Bachman, FSA, MAAA, is President and CEO of Healthcare Visions, Inc. and a senior fellow with the National Center for Policy Analysis. 

More than half of employers now offer consumer-driven options, including Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs).  In 2010, nearly 18 million people will be enrolled, says Bachman. 

Federal legislation can stop progress in its tracks, however. For example, the health care bill passed by the Senate (December 23, 2009) does not directly outlaw HSA-eligible plans, but it restricts HSA options in insidious ways that will delay, deny, defeat and ultimately kill them, says Bachman:  

  • HSA health plans are insurance plans that allow an individual and/or his employer to deposit funds into a special savings account.
  • The funds are not subject to the income tax if withdrawals are used to pay out-of-pocket medical expenses.
  • Right now, HSA plans are the only form of health insurance under which an individual's out-of-pocket exposure is limited by law.
  • Currently, the limits are $5,950 for individuals and $11,900 for families.
  • A plan could have lower deductibles and require patient copays up the total limit, or it could have deductibles as high as $5,950/$11,900 so long as the plan pays all costs above those amounts.  


  • The Senate bill limits the deductible for small group plans to $2,000 for singles and $4,000 for families -- roughly one-third the level allowed under current HSA law -- with copays above the deductible.
  • Many people would choose a $5,950 deductible over a $2,000 deductible and place the premium savings in an HSA, but this is a choice the Senate bill would deny them.  

Source: Ronald E. Bachman, "Congress Declares War on Health Savings Accounts," March 5, 2010. 

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