Tuesday November 22, 2016

Think there’s a better answer for America’s health care?

The Healthcare Choice Coalition is bringing together business owners, agents/brokers, and others who believe in protecting the freedom of citizens to choose and direct their own health care.

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Primary Health Care Issues

The Healthcare Choice Coalition focuses on the health policy issues that most closely relate to consumer-directed health care, including Health Savings Accounts, Health Reimbursement Arrangements, and high deductible health plans (HDHPs).

Health Care Reform

HCC prefers a market-based, consumer-centered health care system and believes that consumers will drive reform in the market place if given the chance. We believe the current health reform law is heavy-handed and will not control rising health care costs because it does not address the underlying reasons for rising costs. While the reform law does not eliminate consumer-driven health care options in an obvious way, we remain watchful for regulations and other policy decisions that could be detrimental to the growth of the consumer-driven market. Specific reform-related issues are described below and deserve special mention.

Minimum Medical Loss Ratio

The health reform law requires insurance companies to meet a minimum “medical loss ratio” standard, or MLR, that dictates how much of private insurance premium dollars insurance companies must expend on medical goods and services. HCC believes the current regulations could make it more challenging for insurance carriers to offer high deductible health plans in the future and are seeking an exemption from these regulations.

Essential Benefits

Under the health reform law, the federal government will soon dictate the medical coverage details an insurance policy must contain. Although this practice of government-mandated benefits typically drives up costs while reducing consumers’ range of coverage options, these requirements should not adversely affect consumer-driven health plans if applied equally to all plans. HCC believes that the essential benefits package should be affordable and not lead to the elimination of consumer-driven plans from the market. In addition, the IRS should define “preventive services” the same for HSA-qualified high deductible plans the same as HHS defines “preventive services” for all plans under the reform law.

Actuarial Value

The health reform law will require all plans to provide a minimum “actuarial value” that specifies the minimum share of total covered expenses under a given health insurance plan. Plans will be required to cover at least 60 percent (Bronze plans) of the cost of covered benefits, and may cover higher amounts – 70 percent (Silver), 80 percent (Gold), and 90 percent (Platinum). Plans that cover a higher percentage of benefit costs will likely have higher premiums, so it is important that Bronze plans be available to consumers. Although no regulations have been issued to define “actuarial value,” they will determine whether consumer-driven plans with HSAs and HRAs will be permitted in the future. HCC believes that HSA and HRA contributions should be counted towards a plan’s actuarial value and encourages the Secretary of Health and Human Services to allow it.

Direct Medical Practice Fees

Currently, patients are not able to use funds from their HSA, HRA, or FSA tax-free to pay for fees paid to their physician on a monthly or annual basis instead of on a “fee-for-service” basis. These types of physician practices are known as “direct medical practices” and are sometimes called “concierge medical practices.” Since the fee(s) paid do not have a direct relationship to the type, level, amount, or date of care provided, the IRS does not consider these fees “qualified medical expenses.” Thus, funds cannot be used tax-free from any of the health care accounts to pay these expenses. HCC believes the tax code should be changed to include these fees as “qualified medical expenses.”

Market Trends

Changes in the health care market will impact future health policy directions, especially as the market adjusts to implementation of the health reform law. HCC will continue to monitors changes in the consumer-driven health care market and report them here.

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