Health savings accounts have plenty of potential in addressing both health care funding and retirement saving challenges, but they could be doing more, according to a medical trade organization.
“When HSAs were enacted, it was hoped that they would transform the medical marketplace and substantially lower prices because consumers would be spending their own money instead of a big insurance company’s money,” Association of American Physicians and Surgeons executive director Jane M. Orient, M.D., said in a statement, “But from the outset, they were hampered by regulations.”
For example, people cannot use their HSA funds to pay their membership fees for what are known as Direct Primary Care practices, she argued. DPCs charge patients recurring fees, similar to retainers, that cover primary care services.
Moreover, if they are members of a DPC practice, they may not even contribute to their HSA.
Congress is considering a law, H.R. 365, that would allow the use of HSAs for this purpose.
Unfortunately, a “few small changes” were made on the way to the House Committee on Ways and Means, which have greatly damaged it, states AAPS.
Under the new language, DPC practices would have to comply with several federal requirements in order to become HSA-eligible. One provision limits the care provided, “which is not conducive to facilitating free markets or advances in medical care.”
Another would prohibit DPC arrangements priced over a certain threshold from being HSA-eligible.
In a letter to Chairman Kevin Brady, R-Texas, and members of the House Committee on Ways and Means, AAPS writes: “HSAs are supposed to increase patient choice, not constrain it. Tax law should not be used to hand out advantages to special interests.”
Particularly concerning are proposals that would discourage patients from seeking higher quality care from independent physicians or facilities instead of care at “retail clinics,” which are generally staffed by nonphysicians.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
