With the election of Barack Obama as the next President of the United States and a Congressional shift in power that favors the Democratic Party, there are certainly many questions regarding how the new political environment will affect health care policy and, specifically, how it will impact the future of health savings accounts and consumer-driven health care.
The first point I would like to make is that health care reform, if and when it occurs, will almost certainly take place gradually over time and not as one broad, sweeping act. Given the economic environment (not to mention $300 billion dollars worth of corporate bailouts), the cost of immediate and drastic changes to the health care system as we know it will be prohibitive.
The second point to emphasize is that consumer-driven health care does have its place within the proposal outlined by Obama and his supporters in Congress. Consider the following excerpt from an article written by Roger Ferguson, former vice chairman of the Federal Reserve and a member of President-elect Obama's Transition Economic Advisory Board:
"Encourage health-related savings. According to the Employee Benefit Research Institute, a couple that retires today will need from $200,000 to $635,000 to pay out-of-pocket health-care costs (above Medicare). Few private-sector employers offer workers an account to save for such costs. Last year's agreement among the Big Three automakers and the United Auto Workers to establish tax-free trusts for worker health is an approach gaining favor among academic institutions. Now Congress needs to enable people with these accounts to leave any unused balance to heirs. This will encourage people to hold on to their savings until the last years of their lives, when health-care money is most needed."
Mr. Ferguson's so-called "health-related savings" and "tax-free trusts for worker health" are perfectly aligned with the fundamental concept underlying consumer-driven health care and HSAs. And lest we forget, the Medical Savings Account, predecessor of the modern-day HSA, was signed into law with the full support of Democratic Senator Ted Kennedy -- a vocal leader on health reform in the Senate.
Indeed, one of the key elements of Obama's proposed plan is that consumers should still have choice when it comes to their insurance coverage and health care decisions, and one of those choices will be the affordable consumer-driven solutions favored by millions of Americans today.
Under Obama's plan, employers will play a significant role in the health care space. Larger employers who did not previously provide health care benefits to their employees would be obligated to offer "meaningful coverage" or else contribute a percentage of their payroll to help offset the cost of providing coverage to all Americans (referred to as the "play or pay" requirement). Small employers would be given a tax credit as an incentive to offer coverage to their workers.
It is our belief that such mandates will have the effect of opening up the employer market; providing health care providers and brokers with new opportunities to work with employer groups to find affordable health care solutions. When you consider that currently, only 49 percent of small businesses provide health care coverage, it is easy to see the potential for growth in the employer market that could result from such legislation.
Under this scenario, it is also likely that employers will gravitate toward lower-cost health insurance options like the high-deductible plans that are paired with HSAs -- particularly in light of current economic conditions.
We also believe that there could be significant opportunity for the growth of HSA solutions under Obama's proposed National Health Insurance Exchange -- a health insurance "marketplace" of private plans and a new public plan that would cater to individuals and small businesses seeking affordable coverage. If consumers are able to purchase qualified high-deductible plans through the Exchange, it could bode well for tax-advantaged HSAs.
Regardless of what takes place in the months and years to follow, turning HSAs into a political football would be rather foolish for any member of Congress. As a general rule, removing consumer choice from the equation is never a sound position to take. Our elected leaders represent the people who seek choice through creative health care solutions. They also represent the more than six million people who have already exercised their right to choose consumer-driven health care plans. I suggest we start by asking each member of congress to do the simple math that proves that consumer-driven health care actually works, and that it must be considered a vital component of any viable plan aimed at solving our nation's health care crisis.
E. Craig Keohan is president of First Horizon Msaver Inc. and considered a pioneer in the consumer-driven health care community. He has more than 24 years of professional leadership experience, with a focus in health care and banking.
