HSAs and FSAs lose election attention war

Donald Trump made expanding health savings accounts a key part of his proposals for replacing the Affordable Care Act. (Photo: screen capture)
Donald Trump made expanding health savings accounts a key part of his proposals for replacing the Affordable Care Act. (Photo: screen capture)

Even before Election Day, the 2016 presidential campaign season had a clear loser: anyone who was hoping the campaign would promote health savings accounts, flexible spending arrangements and other types of personal health accounts.

Hillary Clinton said nothing in favor of health savings accounts, but she also said nothing against them.

Donald Trump made expanding the health savings account program a major component of his proposals for replacing the Affordable Care Act.

Related: Trump’s health plan includes PPACA repeal, drug re-importation

Trump talks about the health savings account expansion idea on his campaign website, and he mentioned health savings account expansion briefly during campaign events. Earlier this month, he mentioned health savings account expansion during an appearance in Valley Forge, Pennsylvania, according to a transcript posted behind a paywall on the What the Folly? website.

“Our replacement plan includes health savings accounts, a nationwide insurance market where you can purchase across state lines, and letting states manage Medicaid dollars,” Trump said, according to the transcript.

This summer, Steve Christenson, an executive vice president at Brainerd, Minnesota-based Ascensus, said he was hoping the presidential campaign would give health savings accounts and other personal health account concepts much-needed publicity. He pointed to the many recent cases in which Democrats in the U.S. House joined with Republicans to support health savings account program improvement measures.

“Everyone has seen the value of the HSA,” Christenson said.

But, over the course of the campaign season, news organizations, and members of the public, focused mainly on issues such as immigration, the relationship of the United States with Russia and Mexico, and U.S. Supreme Court nomination preferences when looking at Clinton’s and Trump’s policy positions. Trump’s health savings account expansion proposal did not seem to capture the public imagination.

A Google Trends comparison shows, for example, that search activity for Trump and immigration spiked to 68 percent of the all-time peak level, from a base level of about 5 percent, in late August and early September, and that search activity for Trump and health jumped to 33 percent of the all-time peak level, from a base rate of about 10 percent, in mid-September. But search activity for “HSA” or for “Trump HSA,” never seemed to move in sync with campaign-related search activity.

Search activity for “Trump health” was a little stronger than activity for “Trump WikiLeaks” this summer, but activity for “Trump WikiLeaks” has been about three to four times as strong as “Trump health” activity since early October.

Search activity for health savings account soared to about 100 percent of the all-time peak level during the first week of November, but that increase appears to be the result of the start of the individual major medical open enrollment period for 2017, not the result of campaign publicity.

Outreach gap

The health savings account program gives taxpayers who buy eligible health coverage with minimum deductibles a chance to put cash in a special fund without paying federal income taxes on the contribution. A taxpayer owns the account outright and can use withdrawals to pay for eligible products and services without paying income taxes on the withdrawals.

Some budget economists for both Democratic and Republican presidential administrations have suggested that specialized tax breaks often give the government and the country a relatively low level of benefits in exchange for the amount of tax revenue lost because the users of the tax breaks tend to be higher-income people who need less help in the first place.

But policymakers in both parties have argued that giving consumers more “skin in the game,” or increasing the amount consumers have to pay for health care from their own pockets, can help make consumers better health care shoppers and hold down health care spending growth. The Obama administration, for example, has fought in recent years to keep Medicare supplement insurance issuers from completely eliminating the impact of traditional Medicare program deductibles.

Christenson said one of health savings account providers’ urgent policy needs is for help with making sure that all people in the United States have access to HSA-compatible health coverage.

Christenson’s employer, Ascensus, cares about health savings accounts because it provides recordkeeping services and other support services for financial institutions’ HSA programs, along with many other personal account programs, such as individual retirement account programs and 401(k) programs.

Related: 11 best & worst 529 college savings plans of 2015: Morningstar

The health savings account program rules set minimum deductible levels for HSA-compatible health coverage, but the rules also set maximum deductible size limits.

One unintended consequence of ACA major medical coverage requirements is that, in some parts of the country, typical health coverage deductibles are too high for policies to be compatible with the health savings account program, Christenson said.

Health savings account providers also need policymakers’ help with getting permission for account owners to use HSA assets to pay for long-term care insurance, Christenson said.

Meanwhile, Christenson said, health savings account providers continue to need outreach help from agents and brokers, to make sure consumers know what health savings accounts are and how they work.

In theory, the ACA public exchanges could help with health savings account education. In Minnesota, for example, the state-based MNsure ACA exchange lets visitors search for HSA-compatible plans. But “there’s no information about the HSAs on there,” Christenson said.

The exchange is only giving consumers information about the coverage part of the arrangement, not the health savings account part, Christenson said. 

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