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February 27, 2019 11:55 AM

Azar touts funding HSAs with Obamacare subsidies

Susannah Luthi
Robert King
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    HHS Secretary Alex Azar

    The Trump administration is considering action two fronts that could loosen up the reins on health savings accounts.

    HHS Secretary Alex Azar on Wednesday pushed the idea of funneling Affordable Care Act subsidies into HSAs for people in the individual market to pay for premiums and other out-of-pocket health spending. At the same time, the administration is exploring a proposal that would allow high-deductible plans with HSAs to cover preventive services such as providing free insulin.

    Speaking to an enthusiastic crowd at the National Association of Health Underwriters in Washington, D.C., Azar said he was talking to governors about the idea of opening HSAs up to subsidies.

    "This is just one possible way to help use insurance design to drive value by empowering patients as consumers of healthcare," Azar said to applause. "Plans with HSAs, especially funded HSAs, can protect Americans from the risk of catastrophic healthcare costs while encouraging them to be price-conscious consumers."

    The concept follows recent guidance on 1332 state innovation waivers that gives states much greater leeway in how they use the federal advance premium tax credits that subsidize ACA exchange plans for people on the low-end of the income scale.

    Azar met with governors over the past weekend during the winter meeting of the National Governors Association.

    States haven't yet proposed any ideas how they would apply ACA tax credits beyond individual market premiums. Trump administration released the 1332 guidance in October.

    In touting the policy, Azar linked it to his broader efforts on price transparency.

    "When an HSA is funded in part by an employer, an individual is protected from the risk of paying large out-of-pocket health costs, but still has ownership and control over much of their health spending," he said.

    During a separate event Wednesday, White House healthcare advisor Brian Blase said the administration is weighing a proposal that would redefine preventive services.

    "We should figure out a way that insulin for diabetics is considered a preventive service that people should use their HSA for," Blase said during an event sponsored by Roll Call.

    Blase didn't say when the proposal would be released. However, the Trump administration previously has explored the idea of expanding preventive services. High-deductible health plans linked to an HSA are increasingly being used by employers to rein in costs.

    The White House did explore a draft executive order in 2017 to allow patients enrolled in a high-deductible plan to access care for chronic conditions before meeting their deductible.

    The consultant Mercer predicted that it expects 72% of large employers this year will offer a health plan with an HSA.

    Congress has also looked into expanding HSAs, a favorite area of reform for Republicans. Several bills to repeal the Affordable Care Act in 2017 included provisions to expand HSAs.

    The House Ways & Means Committee's health subcommittee held a hearing last year on how to expand the use of HSAs, including lifting contribution limits or expanding the services an HSA can pay for.

    But now Democrats are in charge of the House and are pursuing more progressive policies, including the roll out on Wednesday of "Medicare for All." A bill on that proposal, which has been previously introduced in other iterations, enjoys the support of more than 100 co-sponsors.

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