Lydia Mitts Explains the Trouble With HDHPs Paired With HSAs

Lower-income consumers can encounter a lot of difficulties if they end up in a high-deductible plan paired with a health savings account, explained Lydia Mitts, senior policy analyst at Families USA.

Transcript (modified)

What concerns do you have about health savings accounts (HSA) and high-deductible health plans for lower-income consumers?

Lower-income consumers don’t have a lot of disposable income. They rarely have savings that they can afford to set aside for healthcare costs. And the way an HSA high-deductible health plan is designed, there is a blunt, high deductible of at least $1300 per person, and it can go much higher than that. This can be paired with a health savings account, where you can put money into the account in order to save for relative expenses related to that deductible. And nothing is covered before that deductible is met, minus primary preventive care.

Well, lower-income consumers can’t afford to put money aside, and they might struggle with just paying the monthly premium to keep coverage. They really need upfront help covering their costs right away. So it exposes them to a lot of risk; it doesn’t offer a lot of nuance, and, in general, even for consumers who aren’t in a situation where they’re delaying care due to cost, but have some unforeseen medical emergency and need a lot of care, being in a HSA high-deductible health plan is going to expose lower-income consumers to burdensome or unaffordable medical bills resulting in medical debt.

And so I think we don’t see them as a health coverage option that truly meets the needs of lower-income consumers, but when consumers are in those plans we want to make sure that they’re better designed and can facilitate access to some of those high-value services that we discussed at the VBID Summit, like chronic condition management services. So if you’re talking about lower- or middle-wage workers, if an HSA high-deductible health plan is the only health plan their employer is offering them, well we want to make sure that that coverage is at least meeting their needs a little bit better than it is right now.

And in the situation where someone is purchasing coverage on their own, and that’s the only thing that they can afford from a premium standpoint, that’s a really hard place for them to be in. I think there are other policies that we need to resolve so that they can afford more generous coverage which will better meet their needs; but in the short term we need to be making sure that these plans have flexibility to provide upfront coverage for more care.