People in diverse corners of healthcare are hopeful new legislation will ease growing consumer anxiety over higher medical deductibles. And it might have a chance of becoming law because the cause comes from rare bipartisan ground.
Earlier this month, U.S. Reps. Diane Black (R-Tenn.) and Earl Blumenauer (D-Ore.)—both of whom sit on the House Ways and Means Subcommittee on Health—introduced a bill that would change how the federal tax code treats high-deductible health plans that are paired with tax-exempt health savings accounts.
More specifically, the bill would allow first-dollar coverage of exams, prescription drugs and other services for people who have chronic conditions and are enrolled in a high-deductible health plan. Current Treasury Department regulations provide a safe harbor that allows certain types of preventive care to be covered for free or at a reduced cost before the deductible is met. But that exemption does not apply to “any service or benefit intended to treat an existing illness, injury or condition.”
That means a lot of people who are in high-deductible policies and have costly chronic diseases, like cardiovascular disease or diabetes, have to pay full freight to manage their conditions and are potentially exposed to unaffordable out-of-pocket costs.
“This doesn't make any sense,” said Dr. Mark Fendrick, a primary-care physician and director of the University of Michigan's Center for Value-Based Insurance Design, who supports the bill. “A lot of services I beg my patients to do—the services I'm benchmarked on—it's not easy for patients to get them. It's actually harder for them to get those services.”
Fendrick's perspective builds on a primary criticism of high-deductible plans: that instead of pushing people to become conscious healthcare price shoppers, the plans force people to avoid care altogether. Fendrick and others have called today's deductibles “blunt tools” and support value-based insurance design policies, like the pending House bill.
Still, more employers are pushing people into high-deductible plans, some of which are linked with HSAs, or tax-free contributions that can be used to pay for care. High-deductible options are also the most common plans in the Affordable Care Act's individual and small-group markets.
Roughly 19.7 million people had a high-deductible health plan paired with an HSA in 2015, a 13% increase from 17.4 million people in 2014, according to trade group America's Health Insurance Plans. Former President George W. Bush built HSAs into his broader Medicare reform bill in 2003.
The bill actually stands a chance of moving through Congress this year, despite the inactivity associated with the presidential election, because it represents one of the exceedingly few tracts of common ground legislators have found on healthcare.
“For all of the contentiousness with health policy in this country, there are actually some areas where there's some bipartisan consensus,” said Tim Jost, a law professor at Washington and Lee University. “I think value-based insurance design is something that everybody can feel good about,” Jost said. “It certainly makes sense in terms of encouraging people to get treatment for chronic diseases.”
Black and Blumenauer hold starkly different views on health policy that hew to the ongoing partisan war over issues like the ACA and Medicare. Black, a nurse by training, has called President Barack Obama's healthcare reform law an “abject failure” and said it was “built on a grand deception.” Blumenauer supported the ACA and said “it is absolutely a step in the right direction.” He also has dismissed the Republican push to dismantle the ACA as a “disappointing political stunt.”
Their equal support to make it easier for chronically ill patients to get necessary and effective care also is bringing together strange bedfellows within the industry. The American Heart Association, consumer group Families USA and pharmaceutical companies Pfizer and Merck & Co. are among groups that have endorsed the bill. Even AHIP and the Blue Cross and Blue Shield Association, which represent the largest health insurance companies in the country, have lent their support.
“Many families don't have the financial reserves to cover the full cost of a high-deductible health plan,” said Lydia Mitts, a senior policy analyst at Families USA. “We want to make sure all types of coverage are being able to do more to help people with chronic conditions.”
However, Mitts said, her organization is still “not a fan” of health savings accounts because they “do not provide adequate protection for many families.” HSAs often are more beneficial for wealthier individuals and families who have more disposable income for an HSA and therefore reap the tax advantages. Older, sicker and lower-income people have less money to set aside for an HSA.
Jost said an unknown of the bill is how much it will cost, since it will increase tax subsidies for healthcare. The Congressional Budget Office has not scored the bill yet. But there's still hope that removing financial barriers for certain types of care can lower the country's healthcare spending in the long term.
“If you can identify care that is truly necessary and remove that disincentive, that should be a good thing in terms of getting people more healthy and perhaps ultimately in cutting healthcare costs,” Jost said.
It's possible the Senate could create a companion bill by the fall because of the support it is receiving on both sides, said Andrew MacPherson, a senior policy adviser to the Smarter Health Care Coalition and a principal at lobbying firm Healthsperien.
“We've had good support in the Senate,” MacPherson said. “People understand chronic conditions are what's driving long-term cost growth.”
