Transcripts For CSPAN American Enterprise Institute Discussion On Health Savings Accounts 20170710

And cons of Health Saving account and how they might offer to Traditional Health insurance. This is about two hours. Good afternoon, everyone. The American Enterprise institute. Im tom miller, resident fellow iei aei. Lull week bit of a where things are not moving as theyve pretended to move for of months. Uple the efforts in the senate for repeal and replace ended up in and depart, before recess week. And perhaps more to come. Let me just tell you, todays forum is called unbundling the forfit for broader role Health Savings accounts. In light of the senate efforts, thinking of is an older competition that used to be held for Young Athletes ages six to 15, to show their skills. Nfl. E it was called the hunt, pass and kick competition. Thats actually being discontinued. An announcement came in may, 55, 56 years of it. But it looks like the senate is up to the task. In terms of punting, passing, in sense orthrow it aside kicking approach. And well see how much more of that competition renews when the senate is back next week, perhaps for the balance of the month as well. I had to be careful with this, because the nfl is rather namessive on it trade protection. So this is a news shot, as violating any nfl ordinances on pass, punt and kick. Besides, theyre leaving it they want to give everybody now a certificate for being out on the field, i guess, soccer, rather than these skills. Starting a different series of Health Policy events. Been caught up in the politics of whats been going on. Somethingght id try different, which is flesh out some things that people are doing in real research, as to moving the, you know, dollars around from one place to another. That haveg articles appeared in some of the policy journals. What we want to do is talk about, no matter what youre spending, we could do a better job in the health care and the health we deliver by perhaps what ispart conventionally considered the current benefits and maybe reassembling it, which Pay Attention to the people andiving those benefits might have some voice in saying what works for them. Todays version of unbundling the benefit talks about how Health Saving accounts can be used. Have other events which talk about how to perhaps reengineer and restructure care, which would combine using a different mix of services. But also, in some cases, for types of patients or individuals with highrisk a little giving them bit more of an intensive care unit type of approach. Up on probably coming september 5. Well also take a look at how to dollars that are nominally included within the perhaps benefits, retargeted and prioritized in a different way in order to get better results. Maybe look at the distinction between what is said benefits, everything the same for everybody, as opposed to what might be more where peopleefits get what they need in different amounts, in different situations, in order to think what it produces. Today, though, were looking at deal with Health Savings accounts. Now, at the end of the day, accounts, and they have a long history, and well hear from our speakers on are essentially taxadvantaged Health Benefits. You can move that around. There are other ways. Fact, some people have talked about using h. S. A. s in so many its almost like a swiss army life. Doesnt just do this. It does five or six other things. You dont have any money in your h. S. A. , its a good hypothetical tool but it little dull in terms of where it can cut. Give credit to the product, i think. Victor is the only manufacturer army nice. S thats why they have a little bit of a logo in there, unless ive missed that. Or mcgiefer. So the idea of the Health Benefit system moving around advantage dollars so they actually produce more bang for the buck, integrated in one another with Health Insurance. Now, youll hear from our speakers. There are some current proposals to change the contours of h. S. A. s, but there are also and thoughtful ways to reach beyond even tweaking here and there on the margins. Have three speakers today. Our first is going to talk about how to have a more Precision Approach to h. S. A. s. Its an early way to think about this. Introduce the three speakers separately. Roth has just been a new appointment, Teaching Health law writing at st. Johns University School of law, once known as the red men, because became unfashionable. Now theyre the red storm. Has also served as associate director of the wiring program. From columbia university, a law degree from harvard. Clerked, done Legal Research and writing work at seton hall. And has a hometown connection, graduated from George Washington university. I ran across a fascinating warren, thinking about a different way to think about health. Those thoughts in the past. Its a combination of how we can produce Better Health with a broader array of tools, including investments in some of ways toal services, improve health in order to get want as opposed to just paying people along the way who have health care bills. Is going to bee appearing in the cornell journal of law and public policy, date as they alwaysd say. But lets have lauren talk about look atent way to h. S. A. s and a number of layered getting there. Thank you for having me here, thatse i will say typically im talking only to academics, so its nice to have audience here to talk about h. S. A. s. I wrote this article immediately election,the thinking, what are some areas where theres potential bipartisan support . And h. S. A. s seemed to me to be an obvious one. The conversation is even more urgently needed right now, given whats going on. I will give a little bit of Background Information on stepping hopefully not on the toes of the other presenters. And i expanded the amount of information i was going to give, because last night i was at dinner with a friend from college, and he said know, i think i might have a h. S. A. [laughter] and after one question from me, it turned out he did not in a h. S. A. He had a flexible savings account, right . So i think for this person, who one of the smartest people i know hes a lawyer in d. C. Like him dontle really understand much about h. S. A. s, then my guess is a lot no idea andple have dont really understand how to use them, if they do have them. Theres been a lot of talk about h. S. A. s, in the media, you know, following the politicians. Health saving accounts, or h. S. A. s, are part of the movement for consumerdirected health plans. Lot of acronyms involved in the movement. Hra. Msa, maybe thats why people have trouble distinguishing between them, because they get lost a bit in the alphabet soup. So its all part of the general with that started pensions, from a defined benefit paradigm for Employee Benefits to a defined contribution paradigm. Paradigm,ined benefit your employer basically promises you a benefit, now or in the future. You will get 2,000 a month for retirement income. You know, all of your Health Care Expenses minus copayments. To a shift where the employer will place some amount of money, anyoure lucky, into account, and you will really have the control and the freedom to figure out what to do with that. What are your benefit priorities . Now, of course, the problem, as about is if theres not enough money in that account, which ill return to again throughout my presentation, then its not all that much help to you. If you dont have the money to purchase benefits and to provide for your needs, then those accounts which have a lot of potential are not that useful. So theres a big divide, a political divide, about these individual accounts. So republicans, including president bush, who enacted the h. S. A. s, tend to really love the individual accounts. Americanlong with the ethos of individuality and ownership. The idea that people can decide for themselves what their needs on those needs, that you dont have this paternalistic employer telling and providing for your benefits in the way that they think is appropriate. Democrats, on the other hand, tend to think that individual accounts shift the risk to the able toho are least bear it. Right . So democrats are focused on the fact that theres not enough the accounts, right . Maybe the accounts in theory would be a good idea if they were fully funded. But theyre not, right . So democrats see it as a way of on benefits. So talking a little bit about h. S. A. s, so the way it works is that h. S. A. s be combined with a plan. Eductible health so instead of traditional private, you know, Health Insurance that covers all of your medical care needs with an copayments, maybe some coinsurance, but covers your medical needs starting from with an hdhp, your Traditional Health insurance yourage doesnt start until reach a pretty high threshold. Before that time, either youre paying out ofr pocket or you can use your h. S. A. , if it has money in it, to cover those costs. I remember when i graduated from i spent my whole first year working with employers to put in place these h. S. A. s. At the time, people were up in arms, you know, about the and thinking, you know, this wont be good enough. People wont have enough of covered. Enses today people are lucky if they have the h. S. A. s, right, because whether they want to or not, most people have been shifted towards higher deductible Health Insurance plans and frequently they just, you know, they would love to money in. S. A. That had it. So ill talk about so the High Deductible Health plans kick in until the threshold, except for Preventative Care. But beyond that, theres this before your insurance kicks in. Ill talk about the numbers. But professor yee is going to the taxittle bit about advantages of h. S. A. s, which article, itser an incredible savings vehicle. Triple tax savings, right . So your contributions to the h. S. A. Are deductible from income. Earnings grow taxfree. And withdrawals from the account are not taxed, if theyre used for qualified medical expenses. And thats really the focus of is article ive written, what are account holders allowed and how their money on i think it should be different. Money can only be used for medical care as defined under section 213d of the Internal Revenue code. This is a definition that applied to a deduction in the tax code for excessively high Health Care Expenses. Right now the threshold is 10 which is an extraordinarily high amount before the deduction kicks in. Whole cdhp movement kicked in, this definition was expanded to apply to that whole alphabet soup. These individual accounts now are using that definition, which i think is pretty out of date. About how health law scholars are focused on other traditionald medical care. So what you see now, these are numbers for h. S. A. s and hdhps. Annualve to have an deductible of at least 1300 for single coverage or 2600 for family coverage. Theres a maximum for annual out deductibles,enses, copayments, but its a high maximum. A family, is for most people, you know they would their healthng care far before they got to that point. Employers and employees can contribute up to the maximum aggregate limit. Is, you know the work onional proposals expanding this limit. But right now its 3400 for single. And theres a catchup contribution for people 55 and over. Right now, roughly 19 of enrolled in an hdhp. Qualified very careful language. That doesnt necessarily mean they have opened up an h. S. A. That doesnt mean theres any in the h. S. A. , if they have opened it up. Makes it, you know you can see from the numbers below 25 receive no employer contributions at all. Right . The average employer for familyn of 1200 needs to be balanced against the current average annual a family of over 4300. Gapheres about a 3,000 between what the average employer is contributing to the h. S. A. , and the, you know, the deductible where the insurance really kicks in. There are, as people have discussed and continue discussing, there are a lot of drawbacks to h. S. A. s. I dont think theyre insurmountable. Know, the biggest drawback, which weve mentioned before, is that you need to have them. To fund a Health Policy professor said for peopletarter with low incomes. I think thats true right now, right, in terms of the amount of money going into h. S. A. I dont think it needs to be true. Just another vehicle for getting money allocated for to people. Right . Thats really all these accounts are. Potential, in my view. The great risk shift which i packer atut before, yale has done a lot of research on this. Paying, youw are know if they get switched from a Traditional Health hdhp,nce plan to an theyre paying more of their medical expenses than they used to. This is where professor yees work will come in. Being switched. Some people are gaining new coverage. But obviously employees are more of the cost than they did before. Is that it may not be such a bad thing. Areth care expenditures pretty tremendous. We want to find ways to limit them. We want people to think more carefully. Are they using Unnecessary Services . Couldere ways that this force people to think more carefully about their medical needs . Problem with that is that, you know, studies have are notat consumers fully ration natural when it to rational when it comes to health expenditures. Youke other goods that might do shopping around, its pretty hard to shop around and look for competitive prices when youre sick. Obviously if youre in a hospital, and you need emergency difficult. His is but even if youre just not feeling well, the idea of pharmacies to find the best price on a medication is pretty unappealing to most people. And you can imagine that this would add burdens to the system currently there, if the pharmacies and the insurance bepanies, if everyone had to there answering individual questions all day long about the prices of services. The other problem is services may not be comparable. How do you value cancer at Sloan Kettering versus the same treatments at a local hospital . Do you deal with the fact that people have a very subjective attachment to their doctors, right . And may be willing to pay more than they rationally should to see a particular doctor. You know, a couple other reasons. To know if the services are even necessary. So forgetting that it may be hard to compare prices, people relying on their doctors and on experts who know more about medical care than they do to understand if they even need these treatments. Forts a little bit hard individuals without a medical degree to secondguess the help to ration their own health care. And the final point i wanted to that studies are showing, and i list a couple people are rationing their own health care and avoiding needed medical treatment because they dont have enough money in their accounts. Is that youe idea want people to feel the costs with Traditional Health insurance. People have no skin in the game. So they have no incentive at all limit their services that they consume. But, you know, here, maybe now a little too much skin in the game, right . And maybe people are choosing to things,e money on other which is where my research comes in. And in terms of it being complicated, you know, this comes back to my friend. If youre not even sure you have learning curve involved in opening the account, and thenntributions, getting reimbursed, its all pretty difficult. Okay. Current legislative proposals, i wont say too much here, because its in such a state of flux, but beyond the most recent heard from senator the senate bill version of it that i knew about were really doubling the contribution limits to h. S. A. s, single coverage and 10,000 for family coverage. Butn, this is a nice idea, if, you know if a lot of people dont have money in the the contribution limit, which people are not reaching anyway, doesnt really help much. Giving people more flexibility, you know, some of the things i mentioned i think the most important one is really reducing the tax penalty when money is not used for qualified medical care. And the reason for that is you people avoiding putting money into these savings accounts because its unpredictable. You may hear figures like, in retirement, youll need 200,000 for your medical care, but you dont know that. If people are going to have a penalty if they pull the money out, they may be reluctant to using these vehicles. So now to my proposal, which myl spend the rest of presentation talking about. My proposal is for something im precision h. S. A. s. And these are h. S. A. s that are funded by employers, employees, but also the government. And they can be used for a andder array of goods services, depending on the account holders Family Income level. And i list, you know ill go back in detail in a minute. But i list the steps and youll that step one is to fund the accounts. Because its hard to experiment the money for interesting things if only the reallyest americans can afford to fund their accounts. Step two is to allow physicians other health workers, because there are huge costs to the system from having physicians prescribing better housing for you, lets say, to prescribe a broader array of goods and services. This is where the catchphrase healthdeterminates of comes in. Ill explain more in a minute. Three step three, i really dont believe my proposal requires amending the definition of care under the tax code. I think its more about having agencies and courts reinterpret phrase, given the changing state of medical care, the changing research on the impact social determinates of health have on Health Outcomes. Okay. So the current definition of is that youre allowed to get a Tax Deduction or to use your h. S. A. Money for expenses that are, quote, for cure, mitigation, treatment or prevention of disease or for the purpose of affecting any structure or function of the body. So its a pretty broad definition. Definition is the same focusedyone, and its on traditional medical treatments instead of other things that might improve health. Thinking about housing and education, things that are being linked in research, you know, thats being done to Health Outcomes and better Population Health. The u. S. Spends an enormous amount of money on health care, we really spend most of our money on medical care. Ill explain the difference. 17 of g. D. P. Ver on health care and yet we have worse Health Outcomes than comparable countries spending less. I think the time has come to spend on Different Things. Ill give a few examples of what current definition does. The current definition of medical care includes what you expect. Doctors visits, Hospital Services, lab services, cost of medications. Transportation to and from medical treatment. And the cost of some in your mobile home home that made for medical reasons. It excludes things that are quote and this is in the regulations, not the statue merely beneficial to the general the individual, such as vacation. I have a few slides that give examples. This is how finely were parsing it. Whats an example of something h. S. A. Okay to use your funds for . An air conditioner which is detachable from the property and only for the use of a sick person. Whats not okay . Purchasing apparently purchasing air conditioner that prevents everyone in the house from overheating during a heat wave, members in their 90s, lets say. From theis, again, regulations. A doctor suggests that a taxpayer install an elevator in so that thee taxpayers wife, who is afflicted with heart disease, will not be required to climb stairs. Also, the cost of installing swimming pools is frequently a where you can use your individual account for it. For pestt okay, paying control services to prevent roaches from, you know, making the asthma of children worse. And this is another extreme one from a case. Taxpayers were allowed to deduct is cost of enrolling their son school, a college prep school, as a result of drug and behavioral problems, and the to deductwere allowed included tuition, room and board, airfare to and from the school for therapy and an child. Ce account for the whats not okay . Well, you cant use those funds for ordinary education expenses for the poor that are strongly correlated with improving incomes and also improved future health. One of the things that got me thinking about changing the definition and personalizing medical caren of are recent changes to medical care itself. The movement for prevision medicine, which is also calledon medicine, also personalized medicine, is focused on using an individuals code to predict and tailor treatments. Presentationsany i give where Angelina Jolies appears in the slide, but this is one. That will improve the result. Search there you go. Now everyone will find our talk and be more interested. Are testingo positive for certain genes, to increased rest of breast and Ovarian Cancer or having prophylactic surgery. Are being targeted to particular genetic mutations. Ways ine just some which medical care is becoming more personalized. It made me think, if were personalizing medical care, why hasnt the interpretation of the term medical care under the tax changed at all . And why should the definition be the same for everyone . People need different treatment to prevent the disease . And what if Different Things are under thetheir bodies definition, because they live in different environments . What i think we should be spending more on, focusing more on, are the social determinates health. Lawt burrs, Health Professional definds this as the context in which people live, work, earn and play. The idea is that thoses with higher levels of income live longer. For thisl relationship is not entirely understood yet but then again, a lot of medical pay for ande believe in in this country also thatno scientific studies prove theyre effective so why are no not spending money on shows that clearly improvement in Population Health. I put inra incentive, there, in a more unequal society. Apparently the rich dont live as they do in a more equal society. Affecting the cant afford the services. Its something affecting Population Health overall. Forward a little to stick to my time. My proposed definition is to whichmore on healthcare, is any attempt to improve the health of a person, including and qualityongevity of life and i think of medical care has something that takes often in a hospital and physicians office, although thats changing a little bit but healthcare frequently starts at home with a change in lifestyle. Have a biges can impact. Examples that were thinking of toe include a babysitter help you recover more quickly from surgery if you cant otherwise afford one. Afterschool programs for children so they can get not become obese, not have diabetes, fresh fruit, vegetables. So the idea for me is that if are asre things that important or more important than medical care, we should be paying for those things or allowing people to do so so funding the accounts directly or grants to the states where the states are funding the accounts, you know, more and middle class and the working poor have access to and hgsps but its very important that government expenditures focused on improving healthcare not cater only to middle class and upper class, people who can already these to put money in accounts. To me, this could be about sort changing the default rules. People in different income spend on Different Things, right . People in the higher forl of incomes can pay these things regardless but many cant afford to. Its a way for the government to incentivize certain types of spending that will improve Population Health. There. Hink i will stop thank you very much. Lauren. Outsourcing the welfare state where the people who are supposed to benefit from it make the decisions. That for a to park moment in terms of a different think about ways to extend or restructure Tax Advantages or healthcare and health. Well now look at the possible effects and surprising results that our next speaker found with regard to the combination of these h. S. A. s and the higher deductible policies related to it as to what that effect might have in some portions of the population, whether or not it coverage more accessible to them and subsets of that. Our speaker is an assistant professor in economics at wasong to sayity i was told that fast so you couldnt tell pronouncednot i correctly. In received her ph. D. Syracuse in 2006. I came across an excellent article of hers on the subject. Her Research Fields of Health Economics and public economics of examining the and taxf healthcare reform. Also has another paper, the spillover effects of Health Insurance benefit mandates on public insurance coverage, veterans. N good afternoon, everybody. First of all, i would like to inviting me here to discuss my Previous Research feel i believe that because we have a lot of experts about this policy so i think this discussion will help me improve my future Research Presentation today will be the effect my presentation effect of be the Health Savings accounts on Group Insurance coverage so i would to thank my ph. D. Adviser, sitting here and his me tous research inspired looking into this policy. I was a student and had no idea the Research Project so he gave me a hint in looking at this policy. I find this Health Savings account very interesting because healthcareination of reform and tax reform so i would like to spend time to do research on this specific policy and to try to find some empirical evidence, whatever i would like to look. Hashanks for lauren and she already gave us specific details about this policy and can help me a lot to save time and also presents some updated information about this policy since this work is about publishing two years ago so some of the data numbers here are 2010 or something but i think you guys can observe a trend of policies suchthe as the contribution change or deductible change and i think i start from the motivation of this want to look at policy on Group Insurance coverage. According to my understanding, the we think about Healthcare Market or Health Reform, researchers and policymakers focus on two fundamental issues. The first one is whether the can improve the Health Insurance coverage so to goal, the government has already made a lot of the group as for insurance health, or e. S. I. , the already have a lot in compact subsidies to the premium and alsour health plan as far as the public Health Insurance, we also have a lot eligibility extensions and also for individual Health Insurance, also got marketplaces to expand the market. And during the process that we extend to expend the Health Insurance coverage, concerned issue were with is during the process to expand Health Insurance therage, how do we improve efficiency of healthcare spending so i think while im doing my research on health like toaccounts i would feed the policy design of health thoses account into fundamental issues so i find that although we have a lot in the premium part of health plans, we dont have any subsidies for the expenditures before medical savings account account andvings the major function for design, the Health Savings account is to the us to improve efficiency of healthcare spending because Health Savings toount establishment is just help the individuals save for the futures and also want to people to be more sensitive to their health spends since have more control for those moneys in that account so i find account is savings perfectly feeding those so i think issues researching this project will be worth to do that. As for the definition of Health Accounts, it is taxfree healthcare expenditure savings and it will allow individuals or families to contribute to this account and they are totally taxfree. Of course, it can help them to save for their future outofpocket health spends and criteria for being eligible for holding this account is they eligible highdeductible health plans. And according to my understanding, as long as the should purchase the highdeductible health plans and for Health Savings account, it is a behavior to shift the premium component tax subsidies into the outofpocket component so i think it is totally interesting tax reform using the transfer of tax subsidies and as mentioned to also said, have the triple exemptions if you the tax savings account. The first, Health Savings deposit not deduct to the personal tax income and the usedd is withdrawals are for medical expenses, they are taxfree. Thathird tax advantage is we Health Savings accounts be accumulated and used in the future so you can totally save when youre young and use the money when youre old. And also the interest earnings of this deposit are totally to otherso compared tax preferred accounts uch i. R. A. Or 401k, i think Health Savings account has more compared toes others and also i ran into the mye situation as lauren and me, my called me to ask friends like to provide health meings account and they ask can you tell me what are they and at that moment my research useful because i can help people make choice about health plans. I will quickly skip this part since this one is the old numbers. I didnt update the numbers but a trendstill observe compared to laurens presentations. Criteria for the High Deductible Health plan you for healthfy savings account. Deductible level is a little bit higher or 1,250 the same . Its gone up. Maximumnd the contribution is also you can either contribute the High Deductible Health plan 100 forble or 3, individual plan and for the family, you can contribute the deductible health plan 6,000, which is ever is lower. H. S. A. Holders between age 55 and 64 can make catchupl contributions of 700 in 2006 annually until00 it freezes at 1,000 in 2010. Also, here comes the important part. Savings account established into federal law in 2003 and the state law passes in 2011 plays a role by providing state Tax Exemptions parallel federal tax free. Before i go over empirical studies, i want to show some about the people taking up these plans. The panel a shows there is an increasing age. 0. 442004, there are million, increases to 13. 5 in 2012 so we can increasingmatic number of people with this plan penalty to show us there trend forncreasing firms offering this plan and for employees who are taking up these plans panel b. Increasingrve an trend for each side. And under my understanding about policy, i think h. S. A. s may expand Group Insurance coverage from employer side and employee side. For employers, i think they more likely to provide the hdhps for better consumer and cost control through h. S. A. s legislation. Especially for the small employers who havent to provide employees andheir because they face a high risk to the future composition cost but we have the Health Savings accounts, they may think the Health Savings accounts eligible High Deductible Health plans may be a good choice for those firms and also for employees, they have the incentives since the low premium of hdhps paired with the tax break of the Health Accounts may be attractive to those who have butss to Group Insurance havent taken up any of it. Toresearch question turns ,he establishment of h. S. A. Income tax subsidies expand Group Insurance coverage and my identification strategy is using the policy by state and year. I introduced the federal law and like law so i would to explore the the stateof implementation. The federal law implemented the xechingsesestax for contributions to Health Savings accounts and at the same time the State Government can federal contribution. I would like to use this in states in several think itause i laboratory excellent the effect. G to do that, i first using the the policy, that means i just using the policy to identify the effect and the second step, im doing this the state taxing to measure the actual effect of the tax subsidy level though it will be a more accurate effect and this table statehow the time of Health Savings account legislation between 2003 to is my research period. Their each state have year of Health Savings account showmentation and also i the state without any tax subsidy or the state has no state income tax. And so the question here is a simple equation, i followed the classic empirical specifications using those state policies so the y is the binary measurement so if the worker, i, is covered by Group Insurance, i will give them a one, otherwise its zero. And my key variable here will be the h. S. A. So first of all, i h. S. A. Equals to one if the state has Health Savings account, state income exemptions in one year lag, to allow reaction time, and zero otherwise. For this specification, i also control for individual characteristics, marriage, age, education level and occupations. And i also control for state and year. The data is a common source, and i limited the sample to age 55 to 64 years old workers and with no medicaid coverage. So this table i would like to show the statistics of my samples. Maybe the number is a little bit more but i may take away for this table, i want to show the comparison of the individual level characteristics for the Health Savings account states and nonHealth Savings account states and for each, i separated the sample from the whole sample, the older group, and less educated people and i didnt find dramatic differences between the groups but i controlled for every characteristic i can in my model. And this table is the first empirical evidence i would like to show you guys. I used the linear and nonlinear immediately to compare results and column one, i report all the associated marginal effects with the standard arrow. It will be easier to interpret and according to the results, i dont think the Health Savings account existence significantly changed our Group Insurance coverage for the whole sample and the reason why i think i got this small and insignificant positive coefficient is that maybe its due to a lot of unaffected population. Im thinking of a separate sample to see if theres a different cohort to be more effective. This table showed the results when i separated the age group by 10year bracket. From column one to column four, so you can observe the pattern of the effect for the Youngest Group to oldest group. As we can see, the column four will give us a positive result. My interpretation about this coefficient is when youre a worker between 55 and 64, the Health Savings account subsidies will increase the Group Insurance coverage by 2. 6 Percentage Points, at 5 significance level. So my hypothesis is that the Younger Group can be very sensitive since theyre attracted by lowpremium plans but at the same time the older group may also be sensitive since they have a better idea to save for their health, they have the opinion to do the things and also older people may have higher income so their tax incentive may be much better than the younger one. So anyway, the column four, testifies my second hypothesis for those age groups and im also trying to use the linear and i find the result is very consistent and the second cohort i would like to check is the small firms, since i have already mentioned that in my hypothesis. The small firms that doesnt provide any Insurance Plan to their employees previously may be more sensitive to those Health Savings account, High Deductible Health plans so im adding one term of the policy dummy and the indicator of small firms so so i tried to use different cutoffs to test the sensitivity of the result and i find its not significantly different. So if using 25 employees as the cutoff of small firms, i find a significant result for term. So the marginal effect is showing in the bracket, square bracket. That means when we have Health Savings account subsidies, the small firms workers will be increasing Group Insurance plans 2. 4 Percentage Points more than other employees so its consistent with my hypothesis and the third cohort i would like to check whether they are very sensitive to Health Savings account, eligible, High Deductible Health plans is less educated people. According to some previous literature, looking at the effect of not effect the plan choice of those consumerdriven health plans, they have different opinions about whether the higheducational people or loweducational people will be more likely to be affected so im trying to look at whether my conclusion is consistent with theirs. So i still adding one term with policy and the less educated indicator so im using high school here so i find that the terms give me the positive and significant coefficient so that means Health Savings accounts increasing the people with lower educational level 2,. 5 Percentage Points, more than the other workers. And after i using the policy dummy to identify the effect of Health Savings account and figuring that the dummy can only test the effects of the existence of the policy but if i want to go one step further to looking at the effect of the level of tax subsidies, you need to find a more accurate more accurate variable to identify the effect of tax subsidy level. So im trying to using the tax prize of Health Savings account contributions. The definition is a cost of a dollar of tax favored item in terms of current aftertax consumption so to understand that, i give you an example. If the tax rate is is 0. 2, that means the tax prize of this tax favored item will be 1 minus 0. 2, equal to 0. 8 dollars. So the tax price of h. S. A. Contribution can just replicate the definition to here, its the cost of a dollar of such contribution in terms of current aftertax consumption. And because Health Savings accounts will involve the federal tax rate and state tax rate, that means if i want to find the tax price of Health Savings account, i need to find the state tax rate and federal tax rate so im trying to input top marginal federal rate and state rate by year to calculate the tax price for each state and year and im using the taxing model to put every member for every state and every year. So the variation in tax laws across state and year can be assumed as exogenous to individual decisions so i think the maximum tax price of independent variable to using in my regressions. Taking minnesota in 2006, for example, i used the marginal federal income tax rate for the bracket is 32. 9, and the marginal state income tax rate Health Saving affect tax price now will be 1 two numbers so for each state and each year, i ilculate their tax price and just simply replace the previous using this tax price to redo all the analysis i just table is justhis organized all the results here taxas we can see, the price, the single variable here, us insignificant but using the interesting cohort already show they have more sensitive so we find that the can give us a conclusion that when you decrease the tax price by 10 or in other words, we increase the tax subsidies to those accounts, 10 cents, you increase inrly 2 your Group Insurance coverage so thats the way i interpret this number. We can also observe results using the term of tax price and lower level. Onal so thats most of my empirical and because of the time limits, i will skip all the robustness check after the empirical studies. If you are interested in the later process of this project, you can just go there and check the paper. Finally we come to my conclusion and policy implications. My empirical h. S. A. E, i find that the state income subsidies expands Group Insurance coverage for important subgroup of population. For example, the Older Workers for age 55 to 64 and smallfirm educatednd less workers and the magnitude of the are around two to three Percentage Points. As for the policy thinkentations, i according to some previous works Consumer Driven Health plans, they have already found some evidence that they have the to control the Health Spending increase. The positive effect, i found in the paper, can tell us, assuming much different that the Health Savings account subsidies can help particulars the coverage of hdhps and then they will increase the total number of Group Insurance coverage. Even though i cannot check directly about the channel since to observeallow me the specific choice of every worker but im still trying to find a new data set to do that project but i still think the Health Savings account subsidies paired with the High Deductible Health plans have a function to the Cost Increases and they can also promote the health through those policy settings. So lucky when im looking at the new rules of the a. C. A. Is more likely. To promote a comprehensive health plan so im trying to find the evidence that my Health Savings account eligible high beuctible plans can still effective under this setting and i find its very qualified for a. C. A. Health plans so i think under the circumstance of of a. C. A. , the existence help thens can mandatory coverage more employers facing steeply increasing healthcare costs in the future. The a. C. A. Y, i think will be replaced by something think the Health Savings accounts eligible hdhps will play more Important Role in the future Health Reform. Tom give me aate lot of new reforms rules about increasingt like the the maximum amount of and also the catchup contribution to the itsnt so i think consistent with what im finding here so i think the empirical results can be still have implementations for the future and i will still pursuing to see the future impacts of those reforms on the health andces and cost savings Health Outcomes. I think it will be very interesting field. Thank you very much. Jinqi. Health policy researchers only things, another data set and policy variation. That keeps them in business. Knewwonderful we always these worked in theory. Now you are providing evidence. Which is a total bonus. But the political obligations, i went to run back to something earlier. In terms of some of your sub cohorts. Yes, the effects on the less educated. You may want to recall the nevada caucuses. And in terms of the successful candidate at that time right there. Donald trump loves the poorly educated. So hsa should be a winner. Do you want to . I have copyright restrictions. We know that a lot of other people to vote for him. But i think it is a correlation of the convergence. It does help the base. Our final speaker is more a ransom, who could have given you a fivehour discussion on hsa casinos just about everything area whether he is mr. Hsa or other names along the way. He has a nationally recognized on Consumer Directed Health care issues. He was there if not at the birth then at the time of the delivery. Other people do claim to be the godfather. He was at the Treasury Department with the implementation of hsa when it was enacted into law. In full form and 2003. And then he worked for president george w. Bush Health Policy advisor at the white house. He carried on network and he had the implementation of a Medicare Prescription Drug candidate. He is back doing it again with the president of an hsa consulting services. So with all kinds of useful information, it does speak about him. He has experience on capitol hill. On the committee on finance. Hes worked with administrative agencies at the health care administration. He now has under a new name but a same rap sheet. I wont hold this against him because he did go to north carolina. We will take that outside later on. He has his views on policy. Thank you. Thank you for including me today. I think it is important to keep the Historical Context of the hsa and mind. It uses the existing tax preferences for medical care. Haventowledge, we changed the definition to health care yet. It is still medical care for a reason. I am lobbying for that. People ins a lot of this audience in business. That is quite all right. Were at their heyday ben hsas really started to created back in the medical savings accounts days. I guess with your criticisms of the definition of medical care, maybe we should be calling them medical savings accounts because of that reason. But regardless, the name has been changed to Health Savings accounts. They haved argue that made a lot of positive impact on a lot of people. Not only ononed, the coverage side but also addressing some of the concerns about the uses of our health care dollars. And what they can be done with. We do have to recognize that insurance is complicated. For all the things that we nameegatively about the High Deductible Health plan because it usually sends people running to the exits, they are carelly simpler health plans to understand that many traditional plans. Know the would have to copay or coinsurance rate for every service. Under High Deductible Health plan. Subject not free it is to the deductible. So whatever your deductible is, that is how much you will pay. After that, insurance will pay the lion share. Onbe 100 , even, depending how the plan was to side. Of to a final limit on outofpocket expenses for that year, which many of us have forgotten about it as we are so focused on the deductibles and how high they are. Insurance is also use it or lose it. , most ofay a premium us kind of hope we dont have to use it because it might mean that we are really hit by a bus or some other horrible thing happening to us. As others of us think of it a gift card and we go as often as he wanted because somebody else is paying the bill. So we dont care. But insurance doesnt cover everything. And what they do cover is more medical care, i would argue, then health. And we call it Health Insurance but it really is medical care insurance. And there are many criticisms of our system of health and Health Care Financing being more of a sick care model then Health Promotion model, which is what hmos were designed to do. On to change that and focus maintaining and improving health, rather than just taking care of people when they are sick. But injuring their heyday in the mid90s. They also came with a lot of restrictions. A secondnt get opinion and you couldnt go out of network and get something covered because those kinds of restrictions were put in place partly as were response to those restrictions. Where, it if you had your own money to spend, you literally can go see any medical professional that you want and pay for it with your own dollars. So i think the real elevation that hsa has brought to the table was to give the same level of tax treatment to the outofpocket expenses as to the insurance. So our tax code, since the world has been heavily biased in favor of employerbased insurance. And also, medical care purchased through insurance. So if you dont have access to those two things. You dont get tax benefits that other people do. Givesas really come and tax benefits to those people who cannot get those tax benefits through their employment. Who dont have access to them or who may be selfemployed. The outofpocket expenses that all of us have come which insurance is not always cover everything. And employers have provided other options before hsas cable hsas came along. Known as flex savings account, all of which predated hsa is but have similar context of tracks context of tax treatment. Although i would argue that fsas and hsas are much more grounded in terms of their black of flexibility as types of services that they can cover. Having this change and tax parity for the outofpocket expenses, it is no longer necessarily in my interest to spend all of my tax preferred dollars on insurance that covers everything with little outofpocket expense because i can literally get the same tax treatment for my outofpocket expenses through the hsa. Even better, the money that i put in the hsa is not used it or lose it as my insurance is or might fsa is at typically is my hra alternative also is. Hsa can cover many things whichal , not asealth related far as the broccoli and kale caucus would like us to go at this point, but steps in those directions. Which i think is a positive thing when we look at health. Most of us do not measure our Health Care Spending waste on what it does to improve our health. And another criticism that came from the hmos was that the hmo administrator or your employer who was rationing your care, now it is you and who would you rather have ration your care . Someone you dont know or somebody that you do . With the financial choice that goes with it. We also found that a lot of the things that affect our health get better on their own without any medical care. So for all of the studies that i using lesspeople services and people didnt do this or that, ok. I understand that it is one way to measure it. But it did their health suffer as a result . That is what we need to be measuring. That is one of the things that you are trying to suggest with your paper. I hate to be looking at a broader determination of what is health and does the utilization of these Health Care Services have such an impact on their health . Hsas a part see of the Health Reform discussion. Think the doctor for looking at the impacts during the early days when the data was harder to come by. And often got a little complicated to really understand. I do think that the data is suggesting that what of the main was right ona point. Making coverage more affordable. Which would lead to increase coverage and we definitely are glad to see confirmation of that. Hopeful that the analysis of the state hsa subsidies, using your terms, both finally convinced the three holdout states california, alabama and new jersey to finally confirmed their laws to the federal tax law. I remain skeptical that they will actually do so but i can always you will. The paper isthat very useful in understanding kind of the world of hsas before the aca came along. , around the time of the aca coming into play, so we need to keep watching these trends. And if at during the aca we get to such a point where we are post aca or whatever comes next, then we continue to monitor these trends and look for, what does the data suggest . Because i think it is fascinating to look at the subpopulations of individuals and their individual coverage choices. We know that employers are driven primarily by the bottom line. And when they can save money on premium, it will do so. Thankfully, the bulk of them, it appears, are sharing the savings. , but withall of them their employees in the form of hsa contributions. One of the things that i try to work with employers on is making sure that lower paid employees who need the most help and your at the greatest risk, that the employer focuses their contribution strategy on the lower paid workers, as you suggest. Those of us who have greater tons are likely to be able fund those accounts with our own dollars. We probably dont need the hsa subsidies as much as the lower paid workers. Similarly that is another area to look into overtime, as to what is the impact of the contribution strategies. Not only on Employee Participation but also the adoption utilization of these programs. Ross paper, i generally support the notion of making hsas more flexible. And im glad that congress is now involved in so many of our tax policy decisions. They have seen fit to introduce legislation that would take steps down this road. Most notably, a bill introduced by senator orrin hatch, the chair of the finance committee paulsen, and erik member of the house ways and means committee. At this would go a long way taking some of the incremental steps, not as far as you would like us to go at this point but to allow more americans have hsas and to raise contribution limits to provide a more rough flexible use for the hsa fund. And it does get into things that are more along the help spectrum. Such as allowing individuals to use their funds, taxfree, to pay for certain physical fitness programs which i do argue needs to be on the list. Some diet and nutritional supplement. Again, things that could be helping maintain our health. And we need to look at those ideas and maybe be combining them with the broader concept of health and not just limiting that to medical care. I suspect that in the short term, the irs and those who are budget scorekeepers will tell us that this will bust our budget and lead to a dramatic increase in tax expenditures until we figure out a better way to capture the impact on our health payoffs. Ongerterm business knows that we have had it one discussions with the Congressional Budget Office about the value of Preventative Care and whether it pays off in the long run. For the shortterm cost but it does incur in the meantime. I think your paper also raises an interesting possibility for social policy, where we may want to be looking at hsa and other social benefit programs and how how the concepts of the accounts could be combined in ways where food subsidies and housing subsidies and Health Care Subsidies could be combined in ways that are much more flexible to be used. Right now they are based depended on what department created them and the rules that go with them. Congress sometimes has rules to go with that as well. And maybe they could be used in a more holistic and her. The challenge that we have with those things is that at the end of the day, is there if the bracelet that we end up falling off of, completely . Because we dont know where to set the end . And should anybody be enforcing, at the end, what some of the rules and limitations would be . I remember my days at the Treasury Department when hsas were being created. When we tried to do the same andg with Preventative Care believe me, we were lobbied by pretty much everyone, saying that everything they did was preventive. And if it wasnt, it would become it. Exactly. So not everything can be prevented and not everything can be prevented. We do sometimes go back and forth a little bit about whether or not we actually trust americans to spend their own and a recentiately example of that were some conservative republicans who dont want hsa funds to be allowed to pay for elective abortions. Spectrum,sides of the there are views on what should be allowed to spend their money on. Whether it is your favorite vegetables or a yoga class or what have you. I am in favor of things that promote health. Where need to understand our limitations are. And to we really want the irs, somebody who is not trained in Health Policy, to be making those decisions at the taxpayer level. Absent that, we may have to accept some limitations on the subsidies, as a tradeoff for the flexibility. So we can let me stop engage in broader discussion. Thank you. You did mention the dreaded magic word at the end tradeoffs. These accounts would work perfectly if they were 100 funded for everything. Because we may be trusted to spend our own money that some people dont trust you to spend someone elses money. So lets talk a little bit about those radiations and tradeoffs. One thing that was implicitly in their. If you are spending the funds in the hsa on other things that dont fall into the category of insurance, you then are going to have a tradeoff in terms of filling that gap before you reach what the full 100 coverage Insurance Plans. And whether that would tend to create larger out of rocket requirements larger outofpocket requirements, we may be better off by doing it but there will be a gap. There is less gas in the tank and your mileage may vary. So work through that. Because if the money is not infinite, it means a choice. Hopefully it is a choice to do something that pays off better. This is right. Because i talk too much and he is letting me finish what i left out at the end. Absolutely, that is true. If people can spend hsa funds on Different Things there are two things that come with that. They may be left without money to pay for traditional medical expenses because one of the things is that you are bearing risk. Housing may be important today but tomorrow and get hit by a a lot of it is, first of all, not to harp on the point. But if we are talking about the fact that there is not enough funding in those account anyway, then they are facing those choices anyway. Step one is to put money in the account. And then would we do if there is money they can spend on things that might be left over . And i think this may be where we get to the point of where we have different thats where there may be different pools depending on income levels for insurance is. Just because all types of insurance are generally covered to cover catastrophic events whereas we rely on that in this country for basic events. We are now shifting the cost to individuals. So i think there are ways to make sure that even if there is andp, we can lower did a have different deductibles based on income classes. There are different ways that we can do this. Requiring the government to bring down some of those costs. The other issue is that if individuals have impacts on the providers so if people get to the deductible sooner, because there spending both on traditional medicare and other things with the hsa then that will mean that they are using the expenses and it will go up because more people get to that deductible and require services in the Insurance Plan. And theres no way we will allow that to be acceptable. It will require a subsidy to insurance companies. And i dont view this as a bad thing. It is like a tradeoff needs to be made. I just think were making them in the wrong direction. In particular because of certain income levels. We dont bat an eye sometimes on people use insurance for things that really have no value. Or low value. And some would even encourage us to not get some of those services. It could be interesting to gauge that in this conversation. Let me phrase that differently. We have used the Swiss Army Knife analogy before. You have at like least and you do have more, mortar to a college through the hsa account based flexibility as opposed to the onesizefitsall insurance. And talking at times about the effects about distributional beefits, about what will needed and if there is a tax code, it could work the exact opposite and that means the benefits are regressive. It is simple math. So you have the distribution arm over here. And i want to be able to move this stuff. At accasionally we do look different time horizon. It is hard to save money for this future and be able to use it on what you want right now. And how to create an opportunity for not a single answer . That in fact there are different settings what we want to do all of those things that we cant do a hundred percent of them at the same time. And the problem is, they are trying to get a benefit to each group, just to get these past. Ssed. Tax expenditures than the people reaping the most rewarder people who are in the higher bracket. You get more of a benefit and you get to deduct this money from your income. Know, that is why hsas have become such a savings vehicle, for people in the upper class groups. People are seeing increasingly high account balances. Know, theou legislation that is aimed at increasing contribution levels is only going to accelerate that trend. So you do have this huge gap when people at the lowend have the money and these accounts and i would not be increasing the country should limits, to be on a to be honest. Because they think those people have high account balances. I forget that the figure was. 19 billion for what the. Urrent proposals are on how much that would cost. I think we need to focus on using these accounts to redistribute money. Is why, to some extent, hsa still have a bad rap on the left. But as we are not talking enough about distributions. It sounds like we need you everything at once. That doesnt seem to be working that well. And will jump in on the contribution limits. They are designed to achieve parity at the outofpocket limits on these plans. And i would argue that this is that we need i will spend the expenses out of pocket. What i prefer to do them on a taxadvantaged base . I can do that after the year is over between now and april 15. So i dont have to worry about protecting. Many of you need to start thinking about the future because every study i show is that Health Care Expenses in typically does not cover longterm care. Stuck a little bit about data. They had an image of a piggy bank on the cover. We all know about childhood savings. Some people keep it in there and we want to do many things. Pay for our insurance premiums. That we of the money have accumulated in a bank. Verily in terms of and there are averages and medians and there are subsets in terms of how much can really be part of that ugly, without being spent along the way. Lets say you are a diligent person. How much can you acutely over a longer amount of time without suddenly something happening . The idea is that at age 55yearold, how much have you actually got in the hsa . And will be room and what we know about saving ahead . Most people think of hsas as the human as the new and improved fsas. Means e f part still not savings. Average contributions are going up every year but very slightly. We are still at about an average of 2400 a year. Nowhere close to her the maximum czar. Obviously there are great distributions within that and that end up with a a balance at the end of the year because they dont understand. I had the same experience and i have an hsa and that they tell me it is use it or lose it and then no, it is not. That happens. So there are people on the other end of the spectrum who are looking at this simply as a supplement to their retirement savings. You get every walk of life in here. Hsas grow and become more mainstream, people get more walks of life in here than we could have before. So there will be a new group of people who have to understand what the hsas are and what the potential is for them and how it can help them meet their particular needs. We are moving this by now because you worked on the medicare drug benefit as well. The doughnut hole is going to be somewhere. Do we let people move it around to where it matters to them more practically . The drugont end, and and we temporarily put it in the middle although that has changed over time. Limitedd do the more benefits, to say, give people what they need right away and dont worry i dont have assets so i dont care about the catastrophic expense. Is the default basically to say that there are a lot of places but you will come up short somewhere . Or do you think that we can pretend that everyone is fully insulated from risk . I am airing on the side of immediate needs. I think that if people believe that these funds are better spent elsewhere then that is where they should be spent. Also. I think that there is this fundamental misunderstanding of what we really need to be spending on to improve health. The pain for gym memberships and things like that and that is Something Else that could be helpful. But i think People Living in dilapidated housing conditions, it is very hard for them to the tiny percentage chance that a bus could hit them. There is technically a bus heading them every single day of the week. So i think it is the immediate need. I like the idea of integrating some of the other funding through other agencies and having a more overarching approach. Because obviously we are putting things i am putting things into hsa that are traditionally going other places. And i think it is hard. Because you dont always you know, if we were to customize things that you make for great data. So that we could have studies but what is working best to improve the Health Savings. As the problem is that now all anyone wants to talk about are the dollars going out the door. And my next project i am working on is a study dealing with policies that might save costs in the premedicare population. Because it is rare that you can say to people that if you do this in the 10 years leading up to medicare, you will save x amount of dollars, why wouldnt to save that . But it is hard to do when you have a long time horizon and people have different needs. I do think we need to think more creatively than we have been thinking. Thomas miller i want to ask you more about your research. I tried to go through every footnote but sometimes you do miss something along the way. Questionsf threshold came to mind although i know you are trying to show the incremental effects of the way that state tax policy gives variation. You dont only have the whole big states, but you have incomeo dont have state taxed. Read trying to account for what was going on in those states over the years . Do they have a different pattern because they were not enhanced with different packages . Or did yourk out ok throw them out of the pile . At is a very good question. Is to notsituation let them in the sample. The catastrophe to see what happened. But there are only a few states that didnt apply the state savings accounts. So if you throughout the states with no tax income, i am afraid of the variation issue. And to help me to do more checks, i am trying to control every state levels characteristics, especially for the Health Insurance plan. So i controlled for the state level per year, their premium level for the individual and if the state has no income tax, they have something related to the premium. So i controlled for that sort of thing but i kept states like coretta states like florida and california in my example. Are good. Ler games but the question is, compared to what . And that is where the issue is is there a threshold level of texas advantage that encompasses most of what you want to do . And there is an incremental event beyond that . Really want to look at the other data out there to check to see whether people do change their choice. Because that is the key mechanism, in this paper. So i am trying to use other data sets but that is coming from large firms. Im trying to use federal employee records but i think the federal government is a very special company so to say. Y. Learned more about that. But my sense is that this paper only finds the effect of one for. So if i look at federal employees, i dont the guy will find something there. So if there are more comprehensive data sets that encompass all types of firms, i think that would be interesting to look at. And they are also interesting to patterns inthe people. I noticed that the Health Income account can cover dental and vision care. Or but for some traditional, you need to buy actual dental coverage. Sorry dentists, it is true. Jinqi ye so expenditures for ealth Preventive Care, just like the Affordable Care act. You may have seen some proposals saying that we need to think in the peers that such you never got anything. But given that you have a chronic condition, how can you prevent it from getting worse . And it is an interesting redefinition, which is true. But it slides further down the scale and eventually, there is not a full tank of gas. Question is, who should be making those decisions . Somebody affected by it. People always have the idea that anyone other than the individual shouldnt be making these decisions but i have a million caveats. So we went so we dont want them to spend on having an abortion. There are a million things that they add to that. So we dont want the government doing it. Only going to have physicians know, what is really important, as far as health care and what people should be spending the money on . You can see the slippery slope there and help people get into issues with different people, from one to the next. Forindices the money Different Things. Which realistically, it is not pragmatic. So you have to have someone in the government making decisions. If we believe people at different income levels wont spend on certain things unless it is what tax event money then i understand the slippery slope argument but you do have to cut off somewhere. Dont make those decisions then you never have any funding at all for anything beyond Hospital Services and doctors visits. Thomas miller we are going to the audience questions in just another minute or two and i want to go back to roy. He has actually had to deal with the people at the irs. Roy ramthun they are nice people. Thomas miller once they leave the job, im sure they are nice people. The extreme version of this is the aflac commercial. But eventually, people say, what is the money going for . So we backed off on that with paperwork nuisance and maybe once upon a time or sunday in the future, they may ask you to say, do you have evidence for this . The generally speaking there isnt a lot of backup as to how people use the account. So if we expand the parameters further, do we think people should say, they get a certain amount of money and i hope they do good with it as we are not tracking it carefully and lets cut out the nonsense . Or the other argument is, are you safeguarding the taxpayers money . It is a real challenge. People who have celiac disease probably are going to be much more successful at getting glutenfree diets and the things that they have to eat in order to maintain their health before somebody like me, who has a shellfish allergy and im looking for a subsidy for state. Probably not going to happen. It might happen in the case of others. I think this does become the conundrum that we do have to decide. We go . Can because i dont think the irs even wants to be put in the position of having to make those decisions, taxpayer by taxpayer. So can we provide clear enough guidance for people and expect them to follow it with good faith efforts . Not violate trust . But do verify as needed through random audits which is the current process of doing it . Think that is probably going to be a reasonable approach. We could go as far as the atfessor has suggested harvard, looking at the swiss system, where we measure Peoples Health when they join the insurance and five years later, we measure it again and see if it is the same or better or worse. And then decide whether or not we need to assess them, accordingly. So maybe there is an objective way we can measure everyones health and what you do to keep it there or make it better is ok with us. If it is getting worse then somebody to pay at the end of the process and we will quibble about the details in between. Im not sure what the right answer is. But look. We do have to look at the broader context of health, well beyond medical care. Ross has a good case in that account. Thomas miller we have an attentive audience. We have microphones if anyone has any questions or disguised editorials in the form of a a minutebut limited to or so. Identify yourself and please let me know but otherwise you have to listen to my questions and you dont want to do that. There are surprisingly few hsa qualified plans in that market. First off, and like to get worry ransoms thoughts i would like thoughts. Thuns how might that work in the individual market . Roy ramthun so i see the question of why arent there accounts ined hsa the market . Dont the was the priority as the aca was being rolled out. Plans would have to meet not and ine bronze or silver some cases gold requirements under the aca but also the hsa qualified as well. And over time, as it has gotten more challenging, partially because of the regulatory requirements as to what types of coverage this had supplants have to offer but for example, in 2017, the requirements began to thingsd to covering below the deductible that were not Preventative Care. And hsa qualified plan cannot do that. It is prohibited under the law. And thankfully there was enough kicking and screaming that there has been a specifically identified hsa qualified bronze plan that can be offered for 2018 but it is hard to distinguish these policies from other plans in those categories that also have high deductibles. Which onesally tell make you eligible for an hsa versus not. So as to why people would choose one or the other . I dont know. I think there is a lot of confusion in the marketplace. Understand thee value that an hsa brings to the table, along with the High Deductible Health care plan, they may not decide to choose that. Lauren roth i should confess whenat my preference the Obama Administration did away and said, we will not let employers give employees the tax subsidized money that they would have used to purchase Health Insurance and let them go off and through age are raised by plans on the exchanges, i thought that was a big mistake. The exchangesght would not be robust enough to survive. And without propping up, they are having trouble now. So, wesioned that want to allow as many people as possible who dont have access to the tax subsidized funds to use them. For what the people who are lucky enough to have the funds are able to use them for. So i had envisioned that a lot of this would be used to find converging exchanges where you would be able to purchase a plan and allocate between expenses between the Health Care Plan and the hsa money having a flash fun to apply to other things. So i think it is still possible to have those contributions and to find the plan on the individual markets, hopefully, that will let you to use the money for other things. For research, im choosing whether a look at Group Insurance or individual market. Is ad that the account peer investment. Evil in the individual market, they should have a lot of plans. Is that not true in your case . So there are not that many qualified plans in the individual market . Is that what you find . So what kind of plans in the individual market is they offer . Very low premiums . Or a load adoptable . [indiscernible] they dont appear to be many qualified they are not advertised as such. I had a hard time finding them when i was looking for them. I could often tell by the name. And it is a lot more effort was put into the silver costsharing eligible plans to provide those individuals with the subsidies in addition to the premium subsidies and i actually have done some modeling as to what individuals might be able to receive in lieu of a cost chairing subsidy in the form of an hsa contribution. And would produce the same actuarial value that the cost cheering productions would produce. In some cases it could be several thousand dollars. So one does have to wonder, why not give the individual at least the choice of choosing their costsharing subsidies in one form or the other. Thomas miller cutting out the middleman. Right there, and other question . Hello. Im from the Health Resources and services committee. You mentioned msas. One thing i thought interesting about the senate bill is that it mentioned in multiple places the archer msa is and if you could qualify how you think that comes into play . Of, given the states flexibility when it comes to essential Health Benefits. We talk a lot about how hsas are under the aca, they cover Preventive Care at no cost but when you start tampering with ehbs, what is your opinion on how that will affect outcomes . I will start on the archer msas. They were the precursor to hsas as we know them, they started in 1997 after an amendment in 1996 in the hippo law. Archer msas can be created as of december 31, 2007. There are still archer msas out there. We try to get them all converted , the advantages are clearly better under the hsa but some do exist and you will find them and so some of the references in the bill are still artifacts of the legacy of the archer msas. On the ehbs, the essential Health Benefit requirements, you do have a choice as to what the rely on the state to define them or whether you have a uniform federal standard. They dont care which one you choose. But whichever preventive benefits are required to be provided below the deductible would essentially be exempt from the application of the deductible under either scenario. I from an hsa perspective, dont necessarily care who defines this and how it is defined. The be consistent across board and dont have a separate standard for an hsa qualified plans from other plans. Thomas miller another question . Going once . Go. Thank you. With the Panel Comment on hsas connection to fees for service . You have to come up with a receipt for some of the services. In order to get money out of the hsa. Do you consider that to be a barrier to further reform . I, personally, have been growing in my concern about that fee for service linkage. Hsa being tied to a receipt, as you say. I do think that medical care is evil thing and we are seeing much more bundling of services and packaging of services. Which sounds like insurance but in a lot of cases it is not. It is just a package of services that may a diabetic needs a whole bunch of different fee for service things but it is bought and sold in a package with one price so we dont always know how much of each of those pieces you actually get. Under that price. And i am concerned that the irs, at this point, is not clear on how it would handle those types of situations. Feeforservice is an easy thing to gauge. You have a service. There is a receipt. We know what you got and how much you paid for it and therefore how much comes out of your hsa, taxfree. When i start putting other pieces together, im less certain about what you actually bought. And what did you actually get . And should the tax code turn a blind eye to that, so to speak and say, it is all good or the worst case in my opinion is saying none of it is good because it has all been bundled and we dont know whether you orually got any medical Care Health Care or what have you. Or not. So i think this is a future issue that we have to grapple with. And i think we have a good idea at this point as to how that would come out. Thomas miller glenn . A related question, and informational question. First beingre promoted, the idea was that he would go to the doctor because you were paying money out of your own pocket and you could negotiate a low price. That probably work if a few people that it probably not if whole lot of people did it. Im pretty sure blue cross can do it better job at negotiating prices than i can. So under the current hsas, which you actually go to your doctor and get a receipt and you submit it for reimbursement . Or do you get the negotiated prices through your insurer . I would prefer the latter option and i think most people would. Is ramthun fortunately, it the latter option in most cases. If you go to the Network Provider under insurance, you generally do get the negotiated rate. And it is really up to that Doctors Office as to how to collect the payment from you. Tot of the ones ive gone wait and submitted all to insurance and then build me. They could be collecting what used to look like a copay so at least they get some money out of me while im standing there in front of them, because i have seen some studies suggesting that people are not paying their bills. The pay ands to chase method. So if you are in network, you do get the benefit of the negotiated rate as opposed to the full bill of charges. So it is a huge benefit on to say in network, but regardless of whether you stay in network or not, you could use your hsa funds taxfree to pay in outofnetwork doctor just like in network dr. Also the amount would be different. A secondary concern is when theare out of network, that insurance may pay the contracted rate and you may pay the entire amount out of pocket. And when you get into public programs, you do have disputes as to whether that is legal or not. I saw another hand back there . Roy ramthun it is all still medical care. Thomas miller thats right. Thank you for an excellent panel. I serve here in washington. The Smart Health Care coalition is made up of a variety of urbanizations, the u. S. Chamber of commerce and pharma lifesize companies and consumers, i might add. We are focused exclusively on the issue that tom brought up, related to the issue of a valuebased design. My question for anybody who wants to comment is Bipartisan Legislation on the hill that is looking at expanding the current preventative safe harbor to include services and drugs related to ones current condition so it is a limiting factor. There is over i have definitions as toy the cdc and others what a chronic illness is. So there is a limiting factor to it. What if the panel could comment on just expanding that to allow healthcare plans to offer services on it or deductible basis . Unfortunately, i dont know as much about the issue as it would like. But i think this goes again into the fact that with a lot of my proposals, if you expand the definition of Preventative Care, obviously you are increasing costs of policy. Is, is thatquestion we want to put the funds . Is there another way to help these people i dont what your experience has been with this roy ramthun actually have a lot of experience with this issue. Generally i am in favor of giving plans a fox ability to be also do that. I know there are plenty of employers out there who are resistant to the specific hsa plan designs because they are concerned about individual employees who wont take their Blood Pressure medications and their insulin for diabetes etc. And they were very that without sort of compliance with those types of treatment options, that they will, in fact, face a significantly higher cost on the road. So i do think it makes sense to give health plans the opportunity to do that. It will cost a little bit more ecothere is greater coverage. Thelable under the plan but hope is that in the long term, it will pay off in terms of controlling costs down the road. So generally have been supportive of that approach. Lauren roth i want to add one , said he is ensuring that these services are designed to increase adherence but cost doesnt increase adherence all that much. Which is why, the next project im working on is looking at going even further than your proposal. Paying designing tax incentives to give a negative cost. Know, studies are showing that to get the cost savings from improving adherence, you have to go beyond adding them to the Preventative Care definition. Followup . Miss. Uld do that to with the current safe harbor or you could create a new safe harbor which is the access to be better care act, which is in the with the delays and means would do. They created a new safe harbor the freeld create deductibility for their services. And the idea is that Steve Parente who hopefully will be confirmed and a tremendous a lot of research on this issue and they have shown that it would only impact premiums by 2 3 . So there are a lot of ways to do it but there are a lot of places who are going to the market, as you say and a lot of the folks you have chronic conditions and it creates a barrier to them for getting care and ultimately they land up costing more to erode. Thomas miller we are nearing our time of closure and departure. Health care is Pretty Simple to solve, i think, as long as you have infinite resources. I am reminded of a different comedy routine by steve martin about or decades ago where he used to say steve, how do i become a millionaire . And he said it was a multi step process where first, you get a million dollars. But i think todays panel is saying to you is there are not perfect answers but the more there is flexibility and we can try to focus more on what this produces, rather than what goes begin to align and integrate, because it is and usually one person or one sick individual or one person paying it is a mixture. If theyre pulling in the same we make itwith more efficiency for what were spending. Our that, please thank panel for opening our eyes to other ways for thinking of this. Thank you, very much. [applause] ,nnouncer tonight on cspan how police might have better access to social media data. Is followed by theresa may telling members of the house of commons about her recent visit to germany for the g 20 summit. Care, singlepayer health and how it might work in the u. S. Announcer cspans washington journal life every day with news and policy issues that impact you. Tuesday morning, Bloomberg News and real clear politics join us and discuss the week ahead in washington. 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