Consumer-Driven Health Plans Help "Bend the Cost Curve"
How do we reduce unnecessary or wasteful health care spending so that we can increase health care access and reduce the cost of health care? This is a policy question that has vexed policymakers for many years. But new research suggests that market innovations such as health savings accounts paired with high-deductible insurance coverage may hold part of the answer.
HHS Creates a New Out-of-Pocket Limit for Health Plans
In case you missed this development—which was buried in the preamble of a 129-page Federal Register notice dealing mainly with rules for the individual and small group markets, HHS has created a new out-of-pocket limit for group health plans that provide family coverage. HHS says that the limit for self-only coverage applies to each individual who has family coverage. This new individual limit is in addition to the existing limit for family coverage, which applies to the aggregate costs of the covered individuals.
Employer contributions to health savings accounts are decreasing and, according to a recent study, that trend could in part be related to the Affordable Care Act. The study by United Benefit Advisors suggests that when HSA products were new, employers could take insurance premium savings and fully fund the deductible. Today, premium reductions are much smaller. As premiums increase, employers naturally opt to put their contributions toward premiums first and, as a result, slowly reduce their HSA funding to the point where it could entirely become the employee’s responsibility in some cases.
Are Employer Savings on Health Care Being Reinvested in Retirement Plans?
Recent data from the Nationwide Retirement Institute revealed that 64 percent of small-business owners said their employees consider health care benefits less attractive in light of the Affordable Care Act, and 43 percent of these employers are stepping up their contribution to retirement plans to counterbalance this and retain staff. 44 percent said there's now a greater need to offer employee benefits compared to the days before the ACA.
This Is One of the Easiest Ways to Reduce Taxes — and More Americans Are Finally Catching On
Americans are growing much better at preparing for health expenses. The amount stashed in health savings accounts and health reimbursement accounts reached $22.1 billion in 2014, almost quadruple the $5.7 billion saved in the accounts in 2008, according to data from the Employee Benefit Research Institute. The number of accounts more than doubled to 10.6 million in 2014 from 4.2 million in 2008.