GOP to Cover Fancy Saunas but Not Insurance Premiums
Health Savings Accounts Backed by GOP Cover Fancy Saunas but Not Insurance Premiums, MedPage Today
With the tax-free money in a health savings account (HSA), a person can pay for eyeglasses or medical exams, as well as a $1,700 baby bassinet or a $300 online parenting workshop.
Those same dollars can’t be used, though, to pay for most baby formulas, toothbrushes — or insurance premiums.
President Donald Trump and some Republicans are pitching the accounts as an alternative to expiring enhanced federal subsidies that have lowered insurance premium payments for most Americans with Affordable Care Act (ACA) coverage. But legal limits on how HSAs can and can’t be used are prompting doubts that expanding their use would benefit the predominantly low-income people who rely on ACA plans.
The Republican proposals come on the heels of a White House-led change to extend HSA eligibility to more ACA enrollees. One group that would almost certainly benefit: a slew of companies selling expensive wellness items that can be purchased with tax-free dollars from the accounts.
There is also deep skepticism, even among conservatives who support the proposals, that the federal government can pull off such a major policy shift in just a few weeks. The enhanced ACA subsidies expire at the end of the year, and Republicans are still debating among themselves whether to simply extend them.
“The plans have been designed. The premiums have been set. Many people have already enrolled and made their selections,” Douglas Holtz-Eakin, PhD, the president of the American Action Forum, a conservative think tank, warned senators on Nov. 19. “There’s very little that this Congress can do to change the outlook.”
Cassidy’s Plan
With health savings accounts, people who pay high out-of-pocket costs for health insurance are able to set aside money, without paying taxes, for medical expenses.
For decades, Republicans have promoted these accounts as a way for people to save money for major or emergent medical expenses without spending more federal tax dollars on healthcare.
The latest GOP proposals would build on a change included in Republicans’ One Big Beautiful Bill Act, which makes millions more ACA enrollees eligible for health savings accounts. Starting Jan. 1, those enrolled in Obamacare’s cheapest coverage may open and contribute to HSAs.
Republicans
Now Republicans are making the case that, in lieu of the pandemic-era enhanced ACA subsidies, patients would be better off being given money to cover some health costs — specifically through deposits to HSAs.
The White House has yet to release a formal proposal, though early reports suggested it could include HSA contributions as well as temporary, more restrictive premium subsidies.
Sen. Bill Cassidy, (MD Louisiana Republican who chairs the Senate Health, Education, Labor, and Pensions Committee) is facing a potentially tough re-election fight next year and he has proposed loading HSAs with federal dollars sent directly to some ACA enrollees.
Cassidy: “The American people want something to pass, so let’s find something to pass, “Let’s give power to the patient, not profit to the insurance company.”
He has promised a deal can be struck in time for 2026 coverage.
Democrats:
Democrats, whose support Republicans will likely need to pass any healthcare measure, have widely panned the GOP’s ideas. They are calling instead for an extension of the enhanced subsidies to control premium costs for most of the nearly 24 million Americans enrolled in the ACA marketplace, a larger pool than the 7.3 million people the Trump administration estimates soon will be eligible for HSAs.
Sen. Ron Wyden of Oregon (Top Democrat on the Senate Finance Committee): “HSAs can be a useful tool for very wealthy people. “But I don’t see it as a comprehensive health insurance opportunity.”