Health Savings Account-Eligible High Deductible Health Plans

“Regardless of the outcome of the hyper-partisan health reform efforts, the rapid growth of high-deductible health plans is undeniable. The White House should move quickly to ensure that chronically ill patients in these plan arrangements are able to get the services and drugs they need, when they need them,” says Andrew MacPherson, co-director of the Smart Health Care Coalition. Read more about the coalition’s work on HSA-HDHP plans in Inside Health Policy here.


Encourage Congressional and Administrative Action to Improve Access to Care that Helps People Manage Chronic Conditions

We encourage Congressional and Administrative action on a significant issue that could greatly improve access to high value care for millions of Americans with chronic conditions.  Access to care that helps manage these conditions plays a critical role in health, quality of life, and ultimately the sustainability of national health care spending.

Modernizing the Definition of Prevention used by the IRS in Administering HSA-HDHP Plans Provides Flexibility that Can Aid Millions

Specifically, we urge modernization of the “preventive care safe harbor” used in conjunction with high deductible health plans.  High deductible health plans that can be paired with a health savings account (HSA-HDHPs) are a growing source of both employer and individual coverage.  However, current guidance limits the ability of HSA-HDHPs to use innovative benefit designs that increase access to high value services to manage chronic conditions.

Understanding the Details

As described in the enclosed background document and legal memorandum commissioned by the West Health Foundation:

  • HSA-HDHPs are restricted from covering services prior to a deductible being met, unless those services fall within a “preventive care safe harbor.” Current interpretation of the safe harbor is generally read to exclude care to manage existing chronic conditions, and thus can impede patients from accessing such care pre-deductible.
  • This narrow conception of prevention runs counter to the growing body of evidence suggesting that management of chronic conditions is an essential part of prevention and key to the provision of higher quality, cost-effective care.
  • This concern could be readily addressed through Administrative or Congressional action. The Internal Revenue Code explicitly grants the Secretary of the Treasury flexibility in defining the scope of the safe harbor.  Congress also has the ability, legislatively or through engagement with the executive branch, to encourage action.  Such action would complement the bi-partisan Congressional support shown for the development of a value-based insurance design demonstration in Medicare Advantage.  It also would complement alternative payment model development and related provider-facing initiatives that encourage physicians and other clinicians to help patients access evidence-based services.  In so doing, expansion of the safe harbor to ensure the definition of prevention includes services that help patients manage chronic conditions would promote better alignment of “demand and supply side” reform efforts.

Broad Support Exists

There is broad support for addressing this issue.  The Smarter Health Care Coalition reflects a diverse group of health care innovators and public interest organizations who work together to devise solutions to address this and other long-term challenges.  We stand ready to offer assistance in advancing these efforts, and hope to serve as a partner as these issues are further explored and ultimately addressed. Doing so would make a difference to millions of Americans and showcase what smarter health care can look like in the modern age.

***Issue Update: On Thursday, July 7, 2016, Representatives Diane Black and Earl Blumenauer introduced the Access to Better Care Act of 2016, which would allow HSA plans that are paired with high-deductible health plans to provide access to health care services and medications aimed at managing chronic conditions on a pre-deductible basis.

See below for the official bill language, sign-on letter, and press coverage.

***Issue Update:
On Wednesday, July 19, 2017, nearly a dozen member organizations of the Smarter Health Care Coalition sent a letter to the White House in support of the issuance of an Executive Order that expands the preventive care safe harbor under Section 223(c)(2)(C) of the Internal Revenue Code to include services and benefits, including medications, related to the management of chronic diseases.

The letter continues to place pressure on the White House to issue an Executive Order that includes the policy, which would ensure chronically ill patients in those plan arrangements can access needed services and drugs. In addition, it conveys to our Capitol Hill champions that we continue to engage at all levels.

See below for the letter.