Affordable health care continuesto be an important concern of Americans.  Many Democratsare advocating “Medicare for All” as a solution, although thedetails of a Medicare for All system are still being developed andit's unclear whether a proposal can be developed that all Democratswould support.  Republicans can try to score politicalpoints by criticizing the Medicare for All concept, but they needto develop their own proposal.  Republicans cannot justrely on advocating for the repeal of Obamacare; that approachdidn't work in 2018 and it will not work leading into the 2020elections.  Over the last few months, the TrumpAdministration has provided some indication of its position onhealth care reform.  Consumer directed health plans likehealth savings accounts (HSAs), flexiblespending arrangements (FSAs) and health reimbursement arrangements(HRAs), appear to be an important component in the TrumpAdministration's health care reform plans.

The Trump Administration's fiscal year 2020 budget request,entitled “A Budget for a Better America,” shows the continuedsupport of health savings accounts by the Administration inproviding over $40 billion in increased spending by expandingaccess to HSAs.  The budget proposes that all plans withan actuarial value of up to 70 percent may be integrated with HSAs.This would enable consumers to utilize the benefits of HSAs with alarger number of innovative plan designs.  In addition,the budget proposal would give Medicare beneficiaries with highdeductible health plans the option to make tax deductiblecontributions to an HSA.

The budget proposal also states that the Administration islooking at ways of reforming the health care system (away from theAffordable Care Act enacted during the Obama Administration) and itmentions the Graham-Cassidy-Heller-Johnson bill (GCHJ bill)proposed in September 2017 as a template for reform.  TheGCHJ bill contained a number of provisions to expand HSAs andreverse some of the provisions in the ACA that adversely impactedconsumer directed health accounts, so by supporting the GCHJ bill,the Trump Administration is supporting those additionalchanges.

The Trump Administration's support for consumer directed healthplan in its budget request follows a report in December 2018 by theU.S. Departments of the Treasury, Health and Human Services, andLabor entitled “Reforming America's Healthcare System ThroughChoice and Competition,” which supported the use of consumerdirected health plans as a means of reforming America's health caresystem.

The report also outlines several legislative changes that couldbe made to increase the use of HSAs that include:

• Allowing innovative insurance products (such as those thatprovide payment for generic drugs below the deductible or fixed feepayments for primary care) to be coupled with HSAs;
• Allowing individuals enrolled in a health insurance plan with a70 percent actuarial value or below to contribute to an HSA;
• Raise the contribution limits to HSAs; and,
• Developing price and quality transparency initiatives to ensureconsumers make well -informed healthcare decisions.

The budget proposal and the recommendations of the Treasury,Labor and Health and Human Service Departments would requirelegislative action to become effective.  With the House ofRepresentatives controlled by Democrats, it is unlikely that therecommendations of the Trump Administration will be advanced in theHouse.  However, the Trump Administration is alsoadvancing consumer directed health plans through the regulatoryprocess.

The Administration has made regulatory changes that allow moreflexibility under the ACA rules, such as the changes expandingaccess to association health plans for employers and manyself-employed individuals, extending the duration and renewabilityof short-term limited duration Insurance.  TheAdministration has also proposed new regulations to allow employersto offer HRAs to employees for purchasing individualmarket coverage and for employers to be able to offer “stand-aloneHRAs” to their employees and these regulations may be finalizedlater this year.  In addition, the Treasury Department andInternal Revenue Service are exploring whether they can issueguidance which would allow HSA-compatible high deductible healthplans to pay costs for treatment of certain chronic illnesses andother types of treatments as preventive care.  The factthat the lawyers at Treasury and IRS are looking at these issuesshows the commitment of the Trump Administration to advancingconsumer directed health plans.

By looking at the proposals advanced by the Administration andthe regulatory efforts by the Administration, it is clear that theTrump Administration is fully supportive of consumer directedhealth plans.  As a result, employers and their workersshould feel comfortable offering and participating in theseplans.

Bill Sweetnam is Legislative andTechnical Director at ECFC, a leading non-profit organization dedicated tomaintaining and expanding employee benefit programs on atax-advantaged basis.