On June 28, the House Ways and Means Committee held a hearing on health savings accounts / high deductible health plans (HDHPs). Karen Ignani, AHIP’s President, gave interesting testimony on consumer acceptance of HSA/HDHPs. A recent GAO report on first year FEHBP experience with HSA/HDHPs concluded that “FEHBP HDHP enrollees were younger and earned higher federal salaries than other FEHBP enrollees.” Ms Ignani reported about
Two other studies – one by the Employee Benefit Research Institute (EBRI), another by the Blue Cross Blue Shield Association (BCBSA) – have demonstrated that the health status of individuals with HSAs is comparable to the health status of those with other types of coverage. The EBRI study found that 86 percent of individuals with HDHPs and 87 percent of individuals with non-HDHP coverage reported their own health status as very good or good. The BCBSA study yielded similar results, with 77 percent of individuals in both categories – those with HDHP coverage and those with non-HDHP coverage – describing their health status as very good or good. The EBRI study also found that the income distribution is fairly similar for persons with HDHP coverage and with other types of coverage. According to EBRI, 31 percent of HDHP enrollees and 27 percent of non-HDHP enrollees have annual household incomes below $50,000. Similarly, Assurant Health found that 29 percent of enrollees in its HDHPs have annual household incomes below $50,000. Other data from Assurant indicate that 43 percent of HDHP applicants did not have prior health coverage and, additionally, that 69 percent of HDHP purchasers are families with children and 62 percent are over the age of 40.
In connection with this hearing, the Joint Committee on Taxation staff issued an illuminating report on the tax benefits of various health benefit arrangements that are available to federal employees and other citizens.