Tuesday, January 31, 2006
The number of beneficiaries covered by high-deductible health insurance plans tied to health savings accounts has nearly tripled over the past 10 months to more than 3 million, according to new data compiled by America's Health Insurance Plans. Created as part of 2003's Medicare Modernization Act, HSAs allow contribution of pretax funds by individuals or their employers into tax-free savings accounts that may be used to pay for qualified medical expenses. The plans must be attached to so-called "catastrophic" coverage through compatible high-deductible health plans. AHIP doesn't expect to have a breakdown of the new enrollment data by market segment whether large group, small group, or individual for at least another month. However, Karen Ignagni, the group's president and chief executive officer, expressed in a conference call her sense that much of the increase is attributable to the participation of large group plans. Because regulations for the accounts weren't promulgated by the U.S. Treasury Department until August 2004, many large employers already had made their benefit decisions for 2005 and thus didn't offer the plans last year."The bottom line is that this shows the market for HSAs is definitely becoming broader, with companies offering HSAs in more markets and to a wider array of groups," Ignagni said. Ignagni also noted she expects considerable discussion in Congress this year on whether to increase maximum allowable contribution limits for the accounts from the current caps of $2,700 for self-only coverage and $5,450 for family coverage. Other potential changes to the plans may be allowing policyholders to roll over balances from flexible spending accounts; including chronic drug coverage as part of the carve-out of health-care expenses that aren't counted toward a member's deductible; and possibly expanding tax deductions or credits for those who purchase the accounts in the individual market. "Individuals who are not offered health insurance through their jobs, or who may not be employed in a full-time way for instance, consultants and contract employees don't have the same ability to take advantage of tax subsidies the way employers do," Ignagni said. "One of the things that has been circulated over the past couple of days is that the president is considering a level playing field, and we think that would definitely increase the ability of individuals to actually purchase coverage and protect themselves."
posted by kanth
@ 12:53 PM
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