My plan to expand HSAs and healthcare price transparency

January 15, 2020

The start of the year is a time when millions of Americans make promises to improve their lives by changing habits or adopting new ones. Some of the most common resolutions revolve around improving our health: quitting smoking, eating healthier, or exercising more regularly.

But many Americans also consider their financial health at the start of every year by committing to saving more money or getting out of debt.

It can be hard to keep a New Year’s resolution, but my new healthcare bill may make it easier to accomplish goals related to saving money and taking better care of our health by making healthcare more affordable. The Patient Fairness Act hinges on the principles of financial equity and market transparency.

First, it would expand access to health savings accounts to everyone. HSAs allow individuals to save for health-related expenses (drugs, doctors visits, etc.) with pretax dollars, which can also be invested in the long run. These accounts, which incentivize saving by reducing taxable income, are currently only available to individuals with high-deductible health insurance plans. We must give every American access to this financial vehicle.

Further, I want to increase the amount that account holders can invest in their HSAs each year. Currently, individuals can deposit up to $3,500, and families can deposit a maximum of $7,000. My bill would more than double these limits, allowing individuals to invest $8,000 and families to deposit $16,000. The Patient Fairness Act levels the playing field between those who have employer-sponsored health insurance and those who don’t.

The Patient Fairness Act also treats HSAs like other assets, making them more attractive as financial instruments for building intergenerational wealth. By making them inheritable, I hope to let families accumulate and pass on wealth that is less likely to be misspent by younger generations.

The other major goal of the Patient Fairness Act is price transparency — to help people get the information they need to navigate our Byzantine healthcare system better. Most Americans can’t tell you how much a doctor’s visit costs. This is by design, and it insulates hospitals and health insurance companies from competition.

Unlike almost every other good or service, most Americans don’t pay for healthcare directly. Rather, they get health insurance through their employer, creating a separation between patients and doctors that distorts costs while hiding the prices that insurance companies negotiate.

Late last year, President Trump signed an executive order to make healthcare pricing more transparent, directing hospitals to list the prices of over 300 services for nonemergency procedures that are typically scheduled ahead of time. I agree with the policy, and I believe that it should be established in statute rather than left vulnerable to reversal by a future administration.

While this policy would enable patients in nonemergency situations to research prices and procedures beforehand and choose the most affordable option, there’s a bigger benefit still — it will foster competition and level the playing field for smaller insurance companies and employers.

Expanding access to HSAs and requiring hospitals to publish costs is a workable solution that every member of Congress should support. Some might ask, why worry about price transparency when there is no need for pricing at all under Medicare for All? The reality is that our costs keep going up regardless of who pays — the individual, the insurance companies, or the government — because the markets aren’t working correctly or producing the information needed to make them function.

Lastly, the expansion of HSAs gives individuals similar treatment to what companies get when they pay for healthcare with pretax dollars. Who can be against such consumer-friendly concepts as price transparency and giving Americans tax incentives to pay for healthcare? With these policies, we can take an important step to empower individuals to take charge of their healthcare without expanding the government.

So this year, I hope that Congress can do its part to help more Americans make good on their resolutions to increase their savings and take better care of their health.

This opinion piece appeared in the Washington Examiner