Diagnostics & Imaging Week Washington Editor

WASHINGTON – The House Ways and Means Committee took a closer look last week at the impact of health savings accounts (HSAs) on healthcare in the U.S., that look highlighting the partisan divisions seen on just one of many topics on Capitol Hill these days.

While witnesses who oppose these accounts offered little in the way of hope for HSAs, proponents argue that they are roughly comparable to traditional health insurance counterparts and suggested that Congress loosen some of the restrictions on HSAs embodied in the Medicare Modernization Act of 2003.

Speaking for committee chair Bill Thomas, (R-California), who was detained by the District's flood-hampered traffic, Rep. Nancy Johnson (R-Connecticut) said that HSAs "have a couple of great strengths, including that they allow the individual "to tailor their healthcare choice to their family's needs," a benefit that she said the importance of which is "not to be underestimated."

Representing the minority, Rep. Pete Stark (D-California) blasted HSAs, saying, "I think it is time that we had a reality check," and described HSAs as "weapons of mass destruction." He argued that HSAs favor companies with younger workers with higher incomes than typical, and that the HSA program is the Bush administration's way of "throwing extra dollars at the very rich."

Jeffrey Cava, executive vice president of human resources for fast-food provider Wendy's International (Dublin, Ohio), testified that the company's implementation of a high-deductible HSA did not require that enrollees actually contribute to their accounts, but that the company did so. He said that another incentive for employee enrollment was portability, especially for employees "in a business with high turnover," such as the fast-food space.

Wendy's communication strategy, he said, was essential to the program roll-out, including a multi-lingual information call center and web-based enrollment "with modeling tools and a comprehensive written guide." Cava described the communication effort as "an enormous project."

Wendy's plan is said to cover 60% of deductibles and 100% of preventive care, and in the first year of availability, three of four had received an annual physical exam, up from only half the previous year. While eligible employee participation was at 84%, only roughly one in four of Wendy's U.S. employees are eligible for employer-based coverage.

His recommendations to the committee were to encourage an increase in the limits of out-of-pocket expenses beyond the deductible, allow the roll-over of funds from flexible-spending accounts into HSA accounts, and allow a "carve-out of prescription drugs from deductibles."

Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP; Washington), lauded the committee for writing the Medicare Modernization Act to require "that preventive care services . . . be covered by HSA-compatible health plans" outside of deductibles. She said that the association's research showed that more than 3 million Americans are enrolled in HSAs and that an April report by the Government Accountability Office showed that "approximately 50% to 60% of people with HSAs have established accounts."

Ignagni also reported that the AHIP survey showed that half of enrollees were 40 or older, and that "premiums for HSA-compatible plans are approximately 20% to 30% lower than average premiums in the employer market." She added that a study by Blue Cross Blue Shield Association indicated that the health status of those in high-deductible HSA plans is roughly equal to that of those with other types of coverage.

Ignagni recommended that Congress act to "allow employers to assist employees or their family members who suffer from chronic conditions by permitting increased contributions" and allow plans to "cover certain prescription drugs used to treat chronic conditions without the patient first being required to satisfy the minimum annual deductible."

AHIP also would like to see separate deductibles for family members that would fall below the level set for the family as a whole, the net effect of which would be to "make it easier for each family member to meet their healthcare expenses."

Sarah Collins, PhD, assistant vice president of the Commonwealth Fund (New York), argued that "asking families to pay more out of pocket . . . will create more prudent consumers of healthcare," drive down costs, and improve the quality of care is a "comforting idea"; but she insisted that "nearly all the evidence gathered to date about HSAs and HDHPs [high-deductible health plans] points to the contrary."

Collins said that "Americans already pay far more out of pocket for their healthcare than citizens in any other industrialized country" and that "most healthcare costs are incurred by very sick patients, often under emergency conditions," when shopping for best providers is not possible.

She advocated "expanding group insurance coverage" and eliminating Medicare's two-year waiting period for disability coverage. Collins also recommended that the federal government "place limits on family premium and out-of-pocket costs as a percentage of income."

After the panel's testimony, Thomas said that "its not that we're not spending enough on healthcare in this country – it's the distribution."

Rep. Jim McDermott (D-Washington) asked whether healthcare costs as a percentage of payroll were not in the range of 10%, and several panel members indicated that it was at or substantially below that figure, including one who responded that the figure is about 4%-6%.

McDermott asked "if we could get universal coverage for about 10%, why wouldn't business go for it?" And he blasted HSAs as "a band-aid at best," and that he advocated nationalized healthcare.

Panel member Larry Lutey, vice president of human resources for Lutheran Social Services of Illinois (Des Plaines, Illinois), a non-profit social services agency, responded that universal coverage "does not address an investment in wanting to be well."

During the Q&A, Stark reiterated the claim that very few enrollees in high-deductible plans actually had contributed to their savings accounts based on data provided by the Treasury Department.

However, Ignagni said that more recent data are available from several sources, and Thomas blasted the Treasury data, adding that if the Treasury was "in the real world, they'd have been out of business a long time ago."

In his remarks, Rep. J.D. Hayworth (R-Arizona) noted that "this program is a process that has just started" and urged opponents to be mindful of the fact that "HSA fine-tuning is an ongoing process."

And he assured: "Very seldom do we pass an initiative … without revisitation."

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