Transcripts For CSPAN2 American Enterprise Institute Discussion On Health Savings Accounts 20170706

Older competition that used to be held for Young Athletes between ages 6 for 15 to show their skills in nfl. It was called the punt, pass and kick competition. It appears that thats actually being discontinued. The announcement came in may after more than 55, 56 years of it. But it looks like the senate is up to the task in terms of punting, passing, and the more throw to the side sense or kicking approach. Well see how much more of that competition renews when the senate is back next week and perhaps for the balance of the month as well. Had to be careful with this because the nfl is rather agressive on its trade name protection so this is a news shot as opposed to violating any nfl ordinances or pass, punt and kick in fact theyre leave it behind and want to give everybody a certificate for being on the field like soccers. Were starting a today a different series of Health Policy events. Everybody has been caught up in the politics and i thought id try something different, which is flesh out people are doing in Real Research as opposed to just moving dollars around. So i want to talk about given no mart what youre spending we could do a better job in the health care and the health we deliver by perhaps taking apart what is conventionally considered the current benefits and then reassembling it in more creative pays which Pay Attention to those receiving benefits and might have some voice in saying what works for them. So todays version of unbundling the benefits talk about how health civilization Health Savings accounts could be used and well talk about service for patients hits with highcost, highrisk conditions, giving them more intensive care unit type approach in order to head off things. Thats coming up on september a 5th and take around how to move around the dollars in medicaid benefits and perhaps retarget and prioritize them in a different way in order to ideally get better results and maybe look at the distinction between what is said to be equal benefits for everything the same for everybody as opposed to what might be more equitable benefits in people what they need. Today we are looking at new ways to development with Health Savings conditions. At the end of the day Health Savings accounts they have a long history are tax advantaged Health Benefits, you can move that around. There are other ways to do it. In fact some people talked about using hsas in aso many ways its almost like a Swiss Army Knife. Of course if you dont have any money in now health civilization account its a good hypothetical tool but a little dull in terms of where it can cut. Credit to this on the product, think, that victor is the only manufacturer of the Swiss Army Knife. I took some shots on that so theres a logo in there or mac s integrated in one form with Health Insurance. Youll hear from our speakers. Some current proposals as to how to change the contures of hsas and also more creative and thoughtful ways to reach beyond even tweaking here and there on the margins. We have three speakers. The first one will talk about having a more Precision Approach to hsas, an early way to think about this and ill introduce the three speakers separately. Warren roth has just again a new appointment Teaching Health law and legal righting at st. Johns University School of law, known as the red men but that became unfastabled and now the red storm on the campuses. Warren is also served as associate director of the Wiring Program and acting assistant professor in nyu school of law,ern a ph. D in Political Science from Columbia University and a law degree from harvard, has clerked. Done Legal Research and writing work at seton hall, and as a hometown connection, i suppose, because she graduated from george was university. I ran across a fascinating article by warren, thinking bat different way to think about health. Its a combination of how we can produce Better Health with a broader apray of tools, including investments in some of the social services and ways to improve social determinants of health to got the results we want as opposed to paying people who have healthcare bills. So laurens article witness be in the cornell journal of public policy, date to be determined as they says, but lets have lauren talk about a different way to look at hsas and a number of approaches to getting it. Thank you. And thank you for having me here, because i will say that typically im talking only to academics so its nice to have a broader audience here to talk about hsas. I wrote this article immediately following the election, thinking, what are some areas where there is potential bipartisan support, and hsas seemed to be an obvious one. I think the kansas conversation is even more urgently needed given what is going on. ll give a brown on hsas, hoping not stepping on toes 0 the other presentations ump expand the amount of Background Information because i was with a friend and he says i think i might halve a Health Savings account and it turn out he did not in fact have a Health Savings account. He had a flexible savings account. So i think this person is one of the smartest people i know, lawyer in d. C. I think its people like him dont understand very much about hs as, my guess is a lot of other people have no idea and dont understand how to use them. So, theres been a lot of talk about hsas in the media, following the politicians so Health Savings conditions, or hsas, are part of the movement for Consumer Directed Health plan, cdhp, a whole lot of acronyms involved in the movement, fsa, msa, hra. Maybe thats why people have trouble distinguishing between them because they get lost in the alphabet soup. So its all part of the general shift that started with pensions, from a defined benefit paradigm for Employee Benefits to employee. With the defined benefit paradigm your employer promises you a benefit now or in future. You get 2,000 a month for retirement income. Ill pay for all of your Health Care Expenses, minus maybe some copayments to a shift where the employer will place some amount of money, if youre lucky, into an account and you have the control and freedom to figure out what to do with that. Your benefit priorityes. Now the problem, as we talk about, is if theres not enough money in the account which ill return to its not that much help. If you dont have money to provide for needs those conditions which have potential are not that useful. So theres a big divide, political divide, about these individual accounts. So republicans, including president bush, who enacted the legislation for hsas, tend to really love the individual accounts. It goes along with the american ethos of individuality and control and ownership, the idea that people can decide for themselves what their needs or and act on those needs. You dont have is in employer telling you what to too, and providing for your benefits in the way they think is appropriate. Democrats, on the other hand, tend to think that individual accounts shift the risk to the people who are least able to bear it. So democrats are focused on the fact theres not enough money in the accounts. Maybe the conditions no theory would be a good idea if they were fully funded but theyre not. Right . So democrats see it as a way of cutting back on benefits. So talking about the basics of hsas. So, the way it works is that hsas must be combined with a High Deductible Health mon ohdhp north add to our alphabet soup. Instead of traditional private Health Insurance that covers all of your medical care needs with an exception for some copayments, maybe some coinsurance, but covers your medical needs starting from day one, with an hdhp your traditional Health Insurance coverage doesnt start until you reach a pretty high threshold, and before that time either youre responsible for paying out of pocket or use your hsa, if it has money in it to cover the costs. And i remember when i graduated from law school in 2004 i spent my whole first year to work with employers and put in place the hsas and hdhp. At the time people were up and arms about the hsss a and thinking this wont be good enough, people wont have enough of their and ins covered. Today people are lucky if they have the hsas but a whether they want to or not most people have been shifted towards higher deductible halve Insurance Plans and hey just would love to have an hsa with money it in. Ill talk about the High Deductible Health plans dont kick in until the threshold except for Preventive Care. The aca requires they cover in Preventive Care but beyond that theres a whole between before your insurance kicks in where you have to pay for expenses. Ill talk about in the numbers about professor ye is going to talk about the Tax Advantages of hsas. She mentioned in her article its an incredible Savings Vehicle. Triple tax savings. Right . So, the your contributions to the hsa are deductible from income. The earning growth tax rate and withdrawals from the account are not tacked not taxed if used for qualified expenses. The focus of my article, what account holders allowed to spend their money on how i think it should be different. Money can only be used for medical care as defined next sects 213d of the Internal Revenue code. This is a definition that originally applied to a deduction in the tax code for people who have excessively high healthcare expenses. Right now the threshold is 10 of income, which is an extraordinarily high amount before the deduction kicks in, bull when the hole where dhp, consumer driven heck care plan moment kicks in. This i replies to the whole alpha debt soup. All the accounts use that definition which is out of date. And well talk about how health law scholars are focused on other thingson traditional medical care. So, what you see now, these are the 2017 numbers for hsas and hdhps. Hdhps have an annual deductible of 1300 for single or 2600 for family coverage, and theres a maximum for annual out of pocket expenses deductibles, copayments but its a high maximum. 13,000 for a family is for most people they would start rationing their healthcare far before they got to that point. Employers and employees can contribute up to the maximum aggregate limit, which is the congressional proposals work on expanding this limit but right now its 3400 per single coverage, 6750 for family and theres a catchup contribution for people who are 55 and over. So, right now, roughly 19 of employees are enrolled in an hsaqualified hdhp. Thats very careful language. Doesnt necessarily moon they have opened up an hsa or thats any money in the hsa. So, it makes it you can see from the numbers below that, 25 receive no employer contributions at all. And the average employer contribution of 1,200 for family needs to be balanced against the current average annual detickettable for a family of over 4,300. Theres a 3,000 gap between what the average employer is contributing to the hsa and the deductible where the insurance kicks in. There are as people have discussed and continue discussing there are lot of drawbacks to hsas, i dont think their insurmountable but the biggest drawback, which we mentioned before you need to have money to fun them. Sarah rosenbaum, a Health Policy professor at gw said its a nonstarter for people with low incomes. I think thats true right now in terms of the amount of money goes into hsas. Doesnt need to be true. Its another vehicle for getting money allocated for health care to people. Thats all these conditions are. So, it has Great Potential in my view. The great risk shift, which i talked about, a lot of research on this. Employees now are paying if they get switched from a traditional Health Insurance plan to an hdhp theyre paying more of their medical anded than they used to. The this is where professor yes work is coming in. Not everyone is getting switched. Some people are gaining new coverage. Employee employees are bearing more of the costs than theyve did before. And the idea is that may not be such a bad thing. Healthcare expenditures are tremendous. We want to find ways to limit them. We want people to think more carefully, are the using Unnecessary Services . Are there ways this could force people to think more carefully about their medical needs . But the problem with that is that studies have shown that consumers are not fully rational when it comes to Health Expend did tours and theres a lot of reasons for this. First of all, unlike other goods you mightship around, its hard to shop around and look for competitive prices when youre sick. Obviously if youre in a hospital, and you need emergency services, this is difficult, but even if youre just not feeling well the idea of calling five pharmacies to fine the best price on a medication is pretty unappealing to most people and you can imagine this would add burdens to the system that are not currently if there the families and insurance company, everybody had to be there answering individual questions about the prices of services. The other problem is services may not be comparable. How do you value cancer treatments at sloankettering versus the same treatment at a local hospital. How do you deal with the fact that people have a very subjective attachment to their doctors, and may we billing to pay more than may be willing to pay more than they should to see a particular doctor. A couple other reasons. Hard to know if the services are even necessary. So forgetting it may be hard to compare prices, people rely on their doctors and experts who know more about medical care than they do, to understand this if they even need these tremendous. So its a little bit hard for individuals without a medical degree to secondguess the doctors and help to remarks their own health care. The final point i want to make is that studies are showing i list a couple here that people are rationing their own healthcare and avoiding needed until treatment because they dont have enough money in their accounts. The idea is that you want people to feel the costs. With traditional Health Insurance people have no skin the game no incentive to limit services they consume, but here maybe now theres a little too much skin in the game. Right . Maybe people are choosing to spend the money on other things which is where my research comes in, and material n terms of being complicated. Like my friend, if you are not sure you have an hsa and opening the account and making sure you have enough money and then using it, getting reimbursed. Its difficult. Current legislative proposals i wont say too much here because its in such a state of flux but the beyond the most recent proposal i heard from senator cruz, the ahca and the senate bill, the last vs. I knew, were focused on doubling the contribution limits to hsa to 5,000 for single coverage and 10 house 10,000 for family coverage. This is a nice idea but if a lot of people dont have money in the condition, upping the contribution limit doesnt help that much. Focus on giving people more flexibility. Some of the things i mentioned, the most important one is reducing the tax penalty when money is not used for qualified medical care. And the reason for that it you have people avoiding putting money in savings account but a its un predictable. If people are going to have a really large penalty if they pull the money out and use it for Something Else, they may be reluctant to use these vehicles. So, now to my proposal which ill spend the rest of my presentation talking about. My proposal is for something im calling precision hsas and these are hsas funds by moyers and, employees, and also the government. They can be used for a broader array of goods and services, depending on the account holders Family Income level. And i list ill go back in detail but i list the steps and youll notice that step one is to fund the accounts because its hard to experiment and use the money for interesting things if only the wealthiest americans can afford to fund their accounts. Step two is to allow physicians or other health workers, because there are huge costs to the sim from having physicians prescribing better housing for you, lets say to prescribe a broader array of goods services. This where the catch phrase social determinant of Health Company comes in. Step three issue dont believe my proposal requires amending the definition of medical care under the tax code. Its more about having agencies and courts reinterpret this phrase, given the changing state of medical care. The changing research on the impact that the social determinants of health have on health outcomes. So, the current definition of medical care is that youre allowed to get a Tax Deduction or to use your hsa money for expenses that are, quote, for the diagnosis, 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. But the definition is the same for everyone, and its focused on traditional medical treatments instead of other thing that might improve health. Were thinking about housing and education, things that are being linked in research, thats being done to help outcomes. The u. S. Spends an enormous amount of money on health care, and i say Health Care Even though we spend more of our money on medical care and ill explain the difference. Over 17 of gdp or health care but work outcomes than countries spending less. The time has come to spend on Different Things. Ill just give a few examples of what the current definition does. The current definition of medical care includes what you might expect. Doctors visits, Hospital Services, lab services, cost of medications, transportation to and from medical treatment, and the cost of some improvements in your home made for medical reasons but fairly limited. It excludes things, quote this is the regular layings, note statute nearly beneficial to the health of an individual, such an vacation. I have a few slides that give some examples. So, this is how finely were parsing it. What is an example of something that is okay to use your hsa funds for . An air conditioners which i detachable for at the property and used only for the purpose of a sick person. What is not okay, purchasing an air condition that stops everyone else from overheating in a heat wave, including those in their 90s. This is from the regulations. A doctor suggested that a taxpayer install an elevate glory his vons that they taxpayers wife who has Heart Disease will not be required to climb stairs and the cost of having swimming pools. What is not okay, paying for Pest Control Services to prevent roaches from making the asthma of children worse. And this is another extreme one from a case. Taxpayers were allowed to deduct the cost often rolling their son as a prep school as a result of behavioral problems and they were allowed to dike duct, tuition room and booked air fare and therapy and an allowance for the child. What is not okay. You cant use the funds for ordinary education ands for the poor that are strongly correlated with improving incomes and also improved future health. One of the thing that got me started thinking about changing the definition and personalizing the definition of medical care are recent changes to medical care itself. The movement for precision medicine, which is also called personalized medicine, is focused on used an individuals genetic code to predict future illnesses. Not many presentation i fifth where Angelina Jolies name appears, this is one. That will improve the internet searches. People who are testing positive for certain genes, for example in this case to increase risk of breast and Ovarian Cancer are having prophylactic surgery. And cancer drugs, immune youre therapy. Some ways in which medical care is becoming more personalized, and it made my think, if were penalizing medical care, what havent the interpretation of the tomorrow medical care under the tack code changed and whoa she the definition with the same for ann . What if people need different private to prevent the disease and what if Different Things are affecting their bodies natural the definition because they live in different environments . So, what i think we should be spending more on, or focusing more on are the social determinans of health. Scott burris, defines the social determinant of health as the context in which people live, learn, work and play. The basic idea is those who have higher levels of income live longer. Now, the causal relationship for this is not entirely understood yet, but then again a lot of medical treatments that we pay for and believe in, in this country, have in scientific studies that prove theyre effective. Why are we not spending money on things that clearly show improvement in Population Health . And as a little extra incentive i put in there in a more Unequal Society the rich dont leave as well in an equal society. Something that is affecting Population Health overall. My proposed definition is that we spend more on health care which is any attempt to improve the health of a person, including both increasing longevity and quality of life, and i think of medical care is a something that takes place more often in a hospital or physicians office, even though thats changing a little bit now dears but Health Care Standards with a change in lifestyle. Small changes can have a big impact. Examples include a babysitter to help you recover more quickly from surgery if you cant otherwise afford one. After School Programs for thunder union so they can get exercise and not become obese, not have diabetes, fresh fruit, vegetables. And so the idea for me is that if there are things that are as important or more important than medical care, then we should be paying for those things or allowing people to do so. So, funding the accounts correctly or through grants to the states where the states are funding the conditions, more and more at the middle class and working poor have access to hsas and hdhps but its very important that government tax are for people who can already afford to put money in these accounts. And to me this could be about sort of changing the default rules. Different people in different income brackets can put can spend on Different Things. Right . So maybe people in the higher levels of income would pay for these things regardless but a lot of people account afford to. Its also a way for the government to incentivize spending that would improve health. Think i will stop the. Thank you very much. Lauren. You can think of this at outsourcing the welfare state to the people who are supposed to benefit from it and they make the decisions rather than what is on the card. Now, thats well park that for just a moment in terms of different way to think about how to extend or restructure Tax Advantages for health care and Better Health. Well now look at the possible coverage effects in some surprising results that our next speaker found with regard to the combination of these hsas and the higher deductible policies. That effect might have in terms of some portions of the population as whether or not it makes college more accessible to coverage more accessible to them. The speakerandskis stand professor in economics. I was told to say that fast so you cant tell whether i pronounced it correctly university of science and technology in china and received her ph. D in economics from syracuse in 20006. I came across an excellent article of hers in the journal of health economics, december of 2015 on the subject. Peer prime fare halve economics conditioning the effect of health care and tax reform. In addition to this article, the effect of Health Savings accounts on group Health Insurance college and has another paper, the spillover effects of Health Insurance benefit a mandates on public insurance company, evidence from veterans. Okay. Good afternoon, everybody. And first of all i would like to than ai for inviting me here to discuss my research and i feel great pleasure to present my research work. I believe that pause we have a lot of experts be these policy today so i think our discussion will definitely help me to improve my future research and my presentation that i will be that the effect of okay my presentation today will be the effect of Health Savings account on group Insurance Coverage. Would like to think my ph. D oz sizer who is sitting here. Research about medical savings account inspire know looking at this specific policy. When i was a third year ph. D student, had no idea how to start a Research Project so he helped me to have a hint to look at this interesting policy. Find this health civilization account interesting because it is a combination of Health Care Human being redisform tax reform. So id like to do some research on this specific policy and to try to find some empirical evidence, whatever outcome i would like to look. So thank you to lauren. She has already gave us a lot of specific details be in policy and can help me a lot to save some time, and also she presents some updated information about the policy since this work is about publishing two years ago, some of the data numbers are 2010 or something but i think you can observe a trend of the policies such as the contribution change or deductible change and i can start from the motivation of why im looking at this effect of policy on group Insurance Coverage. According to my understanding when we think about the Healthcare Market or halve reform, lot of rae searchers and policymakers focus on two issues. The first one is whether the policy or reform can improve the Health Insurance coverage to obtain this goal the government has made a lot of evers so as for the good insurance health, esi, the government have a lot of income tax subsidies to the premium part of the health plan and also as far as public Health Insurance we have a lot eligible extension especially under the aca setup and also for individual Health Insurance we got market places to expand the market. And during the process that we would like to expand the health coverage, the second from an issue we would like to concern is about the process to extend the Health Insurance coverage, how can we improve the efficiency of healthcare spending. I would like to state the policy of design interest the fundamental issues. Find that even though we already have a lot income tax suck dis to subsidies, we dont have any subsidies for the out of pocket accident distours before medical savings account or Health Savings account and the major function for design, the Health Savings account, is to help to us improve the eefficiency of healthcare spending because Health Savings account establishment is to help the individuals save for their futures and also want to help people to be more sensitive to their health. So the hsa i think researching on this project will be very worse to do that. And as for the definition of halve Service Account its tax Free Health Care expend did tours and its it will allow individuals or families to contribute to this account and they are totally tax free. And of course, it can help them to save for their future out of pocket Health Spending and the criteria for being eligible for holding the account is they purchase eligible high tee ductable health mans, and according to my understanding, if as long as the People Choose to purchase the high detectable program its behavior to shift the into the out of pocket component. It is totally interesting tax reform using the tax subsidies and as meninged to lauren, lauren said have the triple exemptions. If you have the tax savings account. The first is that Health Savings account up to the permanent incomes income and if your withdrawals are used for the tex intention theyre free. And the third is that we want to investment in Health Savings account can be accumulated in used in the future. So if you can totally save when youre young and use the money when youre old, and also the interest earnings of this deposit irtase fox. So compared to ira orr 401 k s i things think Health Savings account have more tax i range the association with lauren and my friends call me to ask my firm like to provide the Health Savings account so can you explain what are they . Anded a that moment i feel like my research are very useful because i can tell people to make their choice about health plans. So im so glad im researching on this field. Ill very quickly skin this part, this one is the old numbers, i didnt update the numbers but you can observe a trend compared to laurens information. So i have the criteria for the High Deductible Health plan ask makes you eligible. In 2012 the deductible level is higher or lower 1,250 its gone up. Okay. And the maybes contribution is also you can either contribution the high deductible halve plan deductible of 3,100 individual program for the family you can contribute 6,250 for family plan, whichever is lower. And also, theres one specific rule for Health Savings account which i use in my empirical analysis. It that holders can make additional contributions from 700 in 2006 and rises by 100 annual until it is 2010. So i will use information to do my empirical evidence later and also, here comps the important part. Health savings account established in 2003, and the state law passes in 03 to 11th place by providing states Tax Exemptions to parallel tax treatment. So, before i ran interest the imwere tall studies i empirical study. The panel a figures show there is increasing trend of the number of people with hsa eligible High Deductible Health plan from 2004. There ir0. 44 million, increases to 13. 5 million in 2012. There is a dramatically increasing number of people who have this kind of plan, and the penalty, just to choose the to show us there is still increasing trend for firms who offering this plan and for employees who taking up this plan. So we can observe increasing trend for each side. And under my understanding about the policy i think hsas may extend the Insurance Coverage from employer side and employee side. But employers, i think they would be more likely to provide the hdhps for better Consumer Engagement and cost control through hsa legislation. Its actually for those small employers who havent provide any plan to their employees because they say its a high risk to the future contribution cost but after we have the health civilization savings Health Savings account the high lee ductable plans might be a good choice. And the employees have the incentive because the low premium of hdpp compared with the tax break of the Health Savings account may be attractive to those who have access to Group Insurance but have not taken it. My Research Questions comes to the and my identification strategy is actually using the policy variation by state and year. Introduced the federal law and state law so i would like to explore the variation of the state, hsa implex addition, actually. The federal law implemented the federal income Tax Exemption for human beingses to Health Savings accounts and at the same time the state governments can uses to mirror federal tax treatment biz offering a state Income Exemption. So would like to use this in self years bus i think it providing a excellent laboratory for learning the fact of providing hsa state income tax subsidies and the probability of workers Getting Group Insurance Coverage. So, to do that i first using the existence of the policy. That means just use the policy to identify the step and the second step is to use the tate tax price of state Health Account price to major the effect of the tax subsidy level. A more accurate effect. And this table will show us the time of state Health Savings account legislation between 2003 to 2011, which is my research period. I show each state have their Health Savings account implementation and the state without any state tax subsidies or the state have no state income tax. And so the equation here is followed every empirical specifics using to the state policies temp y is a binary, and my key variable will be the hsa. I put a dummy here so hsa equals to one if the state has halves civilization account Income Exemption in the year 2minus one. Have people have reaction time and zero otherwise and for this suspicion visitation i allow for marital status, education level, and occupation, et cetera, and also control for state the data im using here is common source. Its just a cps data, the march document from this 2004 to 2011. And i limit my special to age 55 to 64 years old workers and with no medicaid coverage. So thing table i would like to show the statistics. Maybe the number here is a little bit more but may take away for the table. Just want to show the comparison of the individual level characteristics for the Health Savings account state and nonHealth Savings account fades for each sometime of state i the Older Age Group and she mall group and the less educated people, and i didnt find any dramatic differences between those groups but anywhere i controlled for every characteristic i can in my model. And this table is the first empirical evidence id like to show you guys. So, i use the profit and the linear to compare and the common one i just report all the associated marginal. And according to the result is dont think the Health Savings account existence significantly changed our group Insurance Coverage for the whole sample, and the reason wife i think i got this small and insignificant positive coefficient is that maybe its due to a lot of unaffected population now. So im talking about just to see whether is the specific cohort who have been more sensitive to being effective. This table just show she results when i separate the age group by ten, year bracket. So from column one to column four i you can observe the pattern of the fact for the Youngest Group to the oldest group. So, think i see the column four will give up a positive and significant result. My interpretation about this coefficient is that when you are a worker between 55 to 64, the Health Savings account subsidies will increase the group Insurance Coverage by 2. 6 personal points, at 5 significance level. So, my hypothesis is that the Younger Group can be very sensitive. They may attract the low premium plain and the older group may be sensitive because they have a better idea to save for their health, since they have this opinion to do this thing and the older people may have higher income so theirs tax incentive may be much better than the younger one. So, anyway, the column four is my second hypothesis for the age group, and i also trying to use the linear and i find the result is very the second cohort is the small firms, things i have already mentioned in my hypothesis. The small firm that doesnt provide any Insurance Plan for their employees previously may be more sensitive to those Health Savings account relatable plans so i just simple my add one term of the policy dummy and the indicator of more firms. So i trying to use different cutoff to test my sensitive of the results and i find its not very significant different. So, if i using the 25 employees as the cutoff of small firms i find a positive and significant result for the terms. So the marginal fact shows in the bracket square bracket so that means when we have Health Savings account subsidies, the Small Company workers increase their plan 2. 4 personal plans more than other employee. So its consistent with my hypothesis, and the third cohort i would like to check whether they are very sensitive to Health Savings account is less educated people. According to some previous literature, looking at the effect of not no the effect the choice of those consumerdriven health plans, they have different opinions about whether the high educational people or low educational people will be more likely to be effective so im trying to look at whether i my conclusion is consistent with theirs so i add one of term with policy and the less educated indicators so i using high school here. I find that the terms of the positive and significant coefficient. So that means Health Savings account 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 the Health Savings account the dummy can only test the existence of the poll but if i want to look at the effect of the level of tax subsidy is need to find a more accurate, like the more accurate variable to identify the effect of tax subsidy level. So im trying to use the tax price of Health Savings account contributions, the definition of a tax rice is the kohr cost or 0dollar of texas items to help to us understand that i give you an example. The tax rate is 0. 2, that means the tax price of this tax favored item will be 1 minus 0. 2, equalifies to 0. 08. So, the tax price of hsa contributions can just replicate the definition to here is the cost of a dollar of some contribution in terms of current aftertax consumption and because Health Savings account will involve the federal tax rate and state tax rate, that means if i want tophic the price of contributioneds i need to find out what is the state tax rate and the federal tax rate. So im trying to impute the top margin of federal rate and state rate by years to calculate the tax price for each state and year and im using the taxing model of the nbr and to put every number for every state and every year. So, the variation in tax laws across state and here can be assumed as an endogenous to an end decision so the maximum price use using in my regressions. And taking data in 2006, i used a major until a federal income tax rate is 32. 9 for minnesota in 2006 and the major until a state income tax rate is 8. 01 so my Health Savings account tax price below be one number and two numbers and we can have the answer here. For each state and each year i calculate their tax price and i just simply replace the previous dummy using this tax price to redo all the analysis i just show you, and this table is just organized all the results here, and as we can see the tax price, the single variable here can still give us insignificant co efficient but when i use the term of the tax price and the interesting cohort i have already show they have more sensitive behaviors. So we fine we find that the next is 1 point 0. 185 can give us a conclusion that when you decrease the tax price by 10cents, or we increase the tax subsidies to those accountants ten cents you can have nearly two personal point increase in your coverage so thats the way i enter pratt this number and also we can also observe significant results by just using the term of tax price and lower educational levels. So thats most of my empirical results and because of the time limits i will skip all the robustness after the empirical studies if you are interesting about the late are you can check the table. So, finally we come to my conclusion and policy implications. So, according to my empirical evidence i find that the hsa state income subsidies expands Insurance Coverage. The Older Workers age 55 to 64 and the small firm worker and the less educated workers worked the magnitude of the effect are around 2 to 3 points and for the policy implementation, i think the policy the consumer plans, they have found evidence they have the ability to control the health instance crease so the positive effect is found in the paper can tell us of assuming they Health Savings account subsidies can help the can help increase the coverage of hdaps and then theyll increase the total number of group Insurance Coverage. Even though i cannot pass directly about the channels, the state limits doesnt allow me to observe the choice of workerred but i still think the health civilization Health Savings account have the function to moderate the Cost Increases and the account also promote the Health Spending cuts through the policy settings, and just to finish the project i feel like im so lucky when i looking at the new rules of the aca. The aca is more likely to promote a comprehensive health plan so im trying to find the evidence that my Health Savings account can be effective and i find its very qualified for the aca bronze or silver halve plan and the circumstances of the aca, the existence of those plans can help the recovery more achievable for the employers who facing increasing Health Care Cos in the future. But recently i think the aca will be replaced by Something Else and i think Health Savings account will play more role in the future Health Reform. Appreciate tom giving me a lot of new reforms rules about aca just like the increasing the max amount of contributions and also the having the catchup cross catchup contribution to the account. Its coined withwhat i have here. Empirical results hack if some implementation for the future reform and i will deal pursuing to see the future impact of those reforms on the Health Choices and the cost savings on even the health outcomes. So while be very interesting field. Thank you very minute. We know Health Policy researches only need two things, another dat expat variations. I want to pass over, theres oversimplifies we always new these worked in theory and now youre provide something evidence which is a total bonus. But for the political implications i want to run back to something earlier in terms of your subcohorted. The effect on lessed out indicated. To look at the political implement addition you have to can go given who is in the white house, you might want to recall the nevada caucuses or primaries in february of 2016, and comments of the successful candidate at that time, donald trump loves the poorly educated. So, hsas should be a winner on that one and if you want to because i have copyright restrictions you can find that on youtube fish verbatim. He loved a lot of others who voted for him but theres a correlation because it helps the base. Our final speaker is roy ransom who could have given you a fivehour discussion on hsas because he does know just about everything whether he is mr. Hsa oar names. Roy is a nationally recognized expert on Health Savings account and consumer direct it health care issues. He was there at the time of the delivery, both obstetrician and pediatrics to hsas. He did the hard work in terms of actually keeping things alive and moving them ton maturity. He was at the Treasury Department in their implement addition of hsa and full form in 20003 and then worked for president george w. Bush as Health Policy adviser at the white house to carry on that work and develop implement addition of the Medicare Prescription Drug ben and bet and is back doing it again, was the president of hsa Consulting Service with all kind useful information and advice on how these operate. To comment on the two presentations and the elaborate further because he has his views on policy and whats involving the onset. Go ahead. Thank you for including me today. I think its important to keep the Historical Context of hsas in mind in all of this. They kind of take on and use existing test preferences for medical care. To my knowledge we havent changed the definition to healthcare get. It is still medical care for a reason. I am lobbying for that. I understand that. And thats quite all right. Hmos were at their heyday when hsas really started to be created back in the medical savings accounts day. 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, and i would argue that theyve made a lot of positive impact on a lot of people as mentioned not only on the coverage side but also dressing some of the concerns about the uses of our healthcare dollars and what they can be done with. We have to recognize that insurance is complicated. And for all the things that we say negatively about that name High Deductible Health plan because i do since people running to the exits, they are actually simpler health plans to understand than many traditional plans where you have to know the copay or coinsurance rate for every service under High Deductible Health plan, if its not Preventive Care which is freedom it subject to the deductible. And so what of your deductible is, thats how much you are going to pay. After that the injured is going to pay the lions share maybe 100 even debate on how the plan is designed up to a final limit on outofpocket expenses for that year which many of us have forgotten about because were so focused on the deductibles and how high they are. Insurance is also use it or lose it. When you pay your premium, most of us kind of hope that we dont have to use it because that might mean we are really hit by a bus or some other horrible thing happening to us. And others of us think of it as a gift card and would just go as often as they want because somebody else is paying the bill, so we dont care. But insurance doesnt cover everything and what to do cover is more medical care i would argue then health. And we called Health Insurance but it really is medical Care Insurance and their spending many criticisms of our whole system of healthcare financing being more of a sick care model than really a Health Promotion model which is what hmos were designed to do, is trying to change that and focus to maintaining and improving Health Rather than just taking care of people when they were sick. But during her heyday in the mid90s, they also came with a lot of restrictions. You couldnt get a Second Opinion or you could go out of network and get something covered because those kinds of restrictions were put in place. Hsas were partly a response to those restrictions where, if you have your own money to spend, you literally can go seeking a medical professional that you want and pay for it with your own dollars. I think the real innovation that hsas 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 world war ii days has been heavily biased in favor of employerbased insurance, and also medical care purchase to insurance. So if you dont have access to those two things you dont get tax benefits that other people do. And hsas really come and give those tax benefits to people who cannot get those tax benefits to their employment, dont have access to them or may be selfemployed, and also then the outofpocket expenses that all of us have, which insurance does not always cover everything, and employers have provided other options before hsas came along known as flexible spending accounts, Health Reimbursement arrangements at a later date which all predated hsas and a similar concepts and tax treatment for these types of services, although i would argue as essays are much more ground in to 13 d in terms of the lack of flexibility and types of services that they can cover. So with this change and having tax parity for the outofpocket expenses its no longer necessarily in my interest to spent all of my taxpayer for 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 use it or lose it, as my insurance is come as my fsa is, as typically be hra alternative also is. And so the hsa can cover many more quoteunquote nonmedical things that are healthrelated, not as far as the caucus would like us to go at this point, but steps in those directions which i think is a positive thing when were looking at health. Most of us do not measure our healthcare spending based on what it does to improve our health. And another criticism they came from the hmos was it is the hmo administrators or your employer who is rationing your care. Now it is you, and who would you rather have ration your care . Somebody you dont know or somebody that you do with the financial choice that goes with it. We also found that a lot of things that have flipped us and affect our health actually give a other own without medical care. So for all the studies that i read about people use less services, people didnt go get this, people didnt go get that. I understand that. Thats one way to measure this but did their health suffer as a result . Pasolini to be measuring, and i think thats one of the things youre trying to suggest with your paper is a we need be looking at a broader determination of what is health and doesnt the utilization of all these Healthcare Services have such an impact on their health . Im happy to see hsas be part of a Health Reform discussion, and i thank dr. Ye looking at what those impacts were during those early days when data was a little bit harder to come by, and often got a little complicated to really understand. I do think that the data is suggesting that one of the main tenets that hsas was right on point. That is, making college more affordable which would lead to increased coverage making coverage we are glad to see confirmation of that. I also remain hopeful that the analysis of the state hsa subsidies using your terms will finally convince the three holdout states, california, alabama in new jersey, to finally conform their laws to the federal tax law. I remain skeptical that they will actually do so but i can always remain hopeful. I also think that the paper is very useful in understanding kind of the world of hsas before the aca came along. Your research somewhat conveniently stops about the time of the aca comes into play. We need to keep watching these trends, looking at during the aca and if we get to such a point where we are post aca or whatever comes next, that we continue to monitor these trends and look at 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 employers are driven primarily by the bottom line. When they can save money on premium they will do so. Thankfully the bulk of them it appears our sharing those savings, maybe not all of them come with their employees in the form of hsa contributions. One of the things i tried to work with employers on is making sure that the lower paid employees who need the most help at the greatest risk with their deductibles that the employer focuses their contribution strategy on the lower paid workers as you suggest. Those of us who have greater means are likely to be able to fund those accounts with our own dollars, probably dont need the hsa subsidies as much as the lower paid workers so maybe thats another area to look into overtime as to what is the impact of these employer contribution strategies, not only on Employee Participation but also their adoption and utilization of these programs. I generally support the notion of making hsas more flexible and im glad that congress who is now involved in s some of our tax policy decisions has seen fit to introduce some legislation that would go take some steps down this road. Most notably a bill introduced by senator orrin hatch, the chair of the Senate Finance committee, from utah, and congressman eric paulsen who is a member of the house ways and means committee. And this bill would really go a long way i think to taking some of those and committal steps at least maybe not as far as you would like us to go at this point but not only to allow more americans to hsas but to raise those contribution limits and provide a more flexible use for the hsa funds. And he gets into things that are more along the Health Spectrum such as allowing individuals to use their funds taxfree to pay for certain exercise equipment and physical fitness programs, which i would argue also needs to be on our list. Some diet and nutritional supplements, again, things that could be helping us maintain our health. And so we need to look at those ideas and may be be combined them with a broader concept of health and not just limiting it to medical care. I suspect that in the short term the irs and those who are budget scorekeepers will tell us that this robust our budget and will lead to a dramatic increase in tax expenditures until we figure out a better way to capture the impact on our health and the longerterm payoffs, goodness knows weve got lots of discussion at the Congressional Budget Office can also about the value of Preventive Care, and doesnt pay off in the long run for the shortterm costs that it occurs in the meantime. I think your paper also raises interesting possibilities for social policy where we might want to be looking at hsas and other social benefit programs and how those concepts of the account could be combined in ways where food subsidies, housing subsidies can healthcare subsidies could be combined in ways that are much more flexible to be used. Right now they are very siloed based on which department created the program and the rules that go with it. Congress tends to have something to do that with well, maybe they could be used in a much more holistic manner. The challenge that we have though with those things are at the end of the day, is there a slippery slope that we end up falling off of completely because we dont know where to set the ends, and should anyone be enforcing if you will at the end what some of those rules or limitations might be, i do remember my days at the Treasury Department when hsas were being paraded where we are trying to d same thing for defining Preventive Care which would not be subject to the deductible. And believe me we were lobbied by pretty much everyone saying that everything they did was prevent it. It prevented something and if that wasnt it would become it. Absolutely. Not everything can be preventive, not everything can be prevented either. And we sometimes go back and forth a little bit about whether or not we will actually trust americans to spend their own money appropriately and a recent example of that is some conservative republicans who dont want hsa funds to be used to pay for elective abortions. So on all sides of the spectrum there are views on what people should be allowed to spend their money on, whether its your favorite vegetables or yoga classes or what have you. I am in favor of things that promote health, but we need to understand where there are limitations, and do we really want the irs, somebody who is not trained in Health Policy, to be making those decisions affect taxpayer level. Absent that we may have to accept some limitations on these subsidies as a tradeoff for that flexibility. With that let me stop so that we can engage in broader discussion. Thank you, roy. You certainly did mention that dreaded word at the income of tradeoffs. These accounts would work perfectly if there are 100 funded for everything, because we may be trusted to spend our own money but some people dont trust you to spend someone elses money, which is the publicprivate. Lets talk a little bit about those tradeoffs. One thing implicitly was in there, if you are spending the funds in the hsa for other things that dont fall under the category of traditional insurance, you would then going to have a tradeoff in terms of filling that gap before you reach wonderful one of coverage insurance land. And given by that which integrate larger outofpocket requirements before you get into that insurance, we might be better off by diverting it but it will be a gap. Theres less gaps in the take and your mileage may vary. So work through that. Because if the money is not infinite it means a choice come hopefully a choice to something that pays off better. This is tom be nice to me because i talk too much and let me finish what i left out at the end which is great. Absolutely thats true. If people and spent hsa funds on other things come there two things that come with it. They may be left without money to pay for traditional medical expenses, because one of the things is your bearing the risk. Maybe you think housing is more important today, but the more you get hit by that bus. So i think a lot of it is, first of all, obviously again not to harp on the point but if were talking about the fact that currently there is none the funding in anyway, they are facing this choice anyway. So if step was to put money into the account, then the question is what we do but the fact they can spend on other things come there might not be money left over . I think this may be we get to the point of having some different, where there may be some different pools depending on income levels for insurance. Just because insurance, all types of insurance besides Health Insurance are typically used to cover this catastrophic expenses whereas in this country we rely on a for pretty basic care is welcome although we are shifting the cost down to individuals. I think there are ways to make sure that even if there is a gap, we can lower deductibles and have different deductibles depending on income classes. There are tw different ways we n do this, requiring the government to bring down some of those cost. The other issue is just that individuals, the impact on the providers of these picks up if people get to deductible sooner because theyre spending both on traditional medical care and on other things with the hsas, then this would mean theyre using the expenses for these Insurance Companies will of course go up because more people get to that deductible and require Services Provided to the Insurance Plan. I think theres no way around this, if were going to get people more money and dont get to that deductible sooner its going to require some kind of subsidies to the Insurance Companies. I dont view this as a bad thing. Like thomas think that tradeoffs need to be made. I just think weve been making them in the wrong direction in particular price certain income levels. I think we need to refocus on, think beyond just traditional medical care. If i can just add, we dont bat an eye sometimes the people caughquite a user interest the s that really have no value or low value and some would even encourage us to not get some of those services, but then we argue over whether people should be allowed to spend their own money on other things. It is kind of interesting to engage in a conversation. I was given a Swiss Army Knife analogy before, and maybe there were not six assemblies in it, but in terms of the proadvocacy arguments, it seems like youve got at least, a gem or if you want, three distinct potential things you try to accomplish through more hsa account base flexibility as opposed to this one size fits not insurance wrapper. Lauren is talking at times about the distribution of benefits, which is maybe we can resort this my circles to people who need it and will have to be more reversing because the tax code works he got opposite, progressive tax construction means the benefits are regressive come just the way it is wired comes to domestic have a distribution arm and then the middle is flexibility i want to be able to move this stuff out of want to come and occasionally we hear you will have a different time horizon, save it. Its hard to both save us money for the future and being able to use it on what you want right now. So its another straddle and i just, how do we create an opportunity for not a single answer . That, in fact, theyre different settings enter the places, and we want to do all those things but we cant do 100 of each one of them at the same time. And the problem is also that everybody come there trying to give a benefit to each group just to get these things past. So like you said traditionally if reducing tax expenditures, then the people who are giving him weeping the most work for them by the people in higher brackets. If you have a higher marginal tax rate Energy Market benefit when you get to deduct this money from your income. That is i think why the hsas have become such a Savings Vehicle for people in the upper middle class, the upper class groups. People were seeing increasingly high account balances, whereas, the legislation that is in that increasing contribution level is only going to accelerate that trend. You have this huge gap the people at the lower end have no one in their accounts and then a lot of people using it to save for healthcare, medical care expenses 20 years down the line. And i think thats part of where the tradeoffs need to be made. I would not be increasing the contribution limits to be honest because too many other benefits oand then are going to people wo already have high account balances. So i think if are going to take those dollars, and i forget what the figure was, 19 billion, whatever the figure is for what the current proposals to expand the contribution limits, how much that would cost, i think we need to focus on using these accounts to redistribute money. I think thats why to some extent hsas still have a bad rap on the left is because were not talk enough about distribution. Sounds like we just need to do everything at once. That doesnt seem to be working so well. I forgot to just jump in on the contribution limits. They are designed to achieve parity at the outofpocket limit under these Health Insurance plans. And i would argue that really is the protection that the thickest of us need. Im going to spend those expenses outofpocket. What i prefer to do a taxadvantaged basis . Absolutely. The nice thing of the hsa is i can do that after a year is over between now and april 15. I dont have to worry about predicting, sure there will be some people take advantage of it just because theyre thinking about the future. Many of the start, need to start thinking about the future because every study i show says that our Health Care Expenses in retirement are going to be a lot more than most of us are thinking of. Thats after what medicare is covering and typically doesnt cover longterm care. Lets talk a little data for a second. Roy probably has as much and on this is anybody. They had the image of a piggy bank on the cover which, that says something about how people view on that. We all know, some people keep it in of the people dont keep it in. We want to do many things, a Car Insurance premiums, with all this money we have accumulated in the bank. Where are we in terms of, and there are averages and there are medians, and then there are subsets, engines of how much can really be part of effectively without being spent along the way to let say you are a diligent person, careful what you healthcare. How much can you a few million over a longer period of time without suddenly something happens and you need to get out there. The idea at age 65 how much of you asking what we know right now about how much gets saved looking ahead as opposed to needs to be spent anyway . Unfortunately most people think of hsas just like a new and improved fsa where its money and money out. And so the s part of hsas domaingovernment spending to tht savings. Thats something the industry has been working on trying to get people understand there is a strong savings component for this account. The data, the average contributions are going up every year but very slightly and we are still only at about an average of 2400 a year. Which is nowhere close to where the maximums are. Obviously theres great distributions within that, and just some that end up with zero balances at the end of every year because they dont understand. I have had the same experiences others have had. Yes, i havent hsa and they tell me that it is use it or lose it and no, its not. So that happens. There are other people on the other end of the spectrum are looking at this and as a supplement to the retirement savings. If you get any walk of life in here, and i think as hsas grow and become more mainstream we are going to get more walks of life in there that weve had before. So the group of people who have to understand what hsas are, what the potential are for them and how can help to meet their particular needs. I just think, were moving by analogy because you worked on medicare drug benefits as well. The donut hole is going to be somewhere. Do we let people move it around to where it matters to the more practically . In other words, you can have at the front and come and the drug benefit we temporally put it in the middle of that. Thats been naked overtime or you can do the more limited benefits benefit people lobby on that one come to say give people what they need right away and dont worry about come out of having assets so really dont care about that catastrophic expense. Is the default to basically say theres a lot of places which are going to have to come up short somewhere or do we think that we can pretend that it but it is fully having some risk without a prefunded benefit . I mean, you know, i am erring on the side a focus on immediate needs. I think that if people believe that these funds are better spent elsewhere, the nas where they should be spent. Also i think theres this fundamental misunderstanding of what we really need to be spending on to improve health. And, yes, i know, i think paying for gym memberships and things like that, and that Something Else that could be helpful, but i think People Living in dilapidated housing conditions, its very hard for them to focus on that tiny percentage chance that a bus could hit them, when there is technically a bus hitting them every single day of the week. I think thats the immediate needs. I really like the idea of integrating some of the other, the funding to other agencies and sort of having and more overarching approach. Obviously with putting things, im putting things into hsas that traditionally are going to other places. I think its also hard because you dont always, if we were to customize things and also make for some great data so that we can have studies about whats working best and prove the Health Savings, right . Because the problem is that now anyone was to take over the dollars going out the door. My next project im working on is actually a study do with some policies that might save costs in the premedicare population because its a rare you can say to people if you do this, in the ten years leading up to medical you say x number of dollars can why would you spend on that . Unfortunately it is harder to do when people come get such a long time horizons, people have different needs. I think we do need to start thinking a little more creatively than we had been thinking. I want to ask you more about your research. I tried to go through every footnote and any manifestation so if you miss something along the way. A couple of threshold questions to mind although i think youre trying to show the incremental effects of the way in which state tax policy give natural variation. Youve got not just the holdout states that roy was talking about but some states and some big ones, im thinking florida and texas which dont have an income tax. Were you able separately to say was going on in the states over the years . Did have a different growth pattern . Because they were not enhanced by additional state Tax Advantages. Did that all work out okay to basically chosen out of the file if i understand what you did this . I think thats a very good question. So i think that ideal situation to, just maybe dont let the in and to redo the task to see what happened. But i think theres only a few states that didnt imply the state savings account. If i throw out all the states with no tax income im a bit afraid the variation issue. And to help me to do more, im trying to control every statelevel characteristics, especially for the Health Insurance plans, and my robust check i control for the state level per year. Their premium level for individual and single i think become they have no income tax they should have something related to the premium, premium is also like tax exempt appears uncomfortable for that type of thing but still keep [inaudible] you are getting about 2. 5 which games are good. Compared to what you do instead. That raises the issue of is there a threshold level of tax event which accomplishes most of what you want to do . Then theres an incremental effect beyond that and what the variation is on the google the we do love the poorly educated, i want to make that i really want to come look at the other data set to check whether people to change their choice because thats the key mechanism in this paper. Im trying to use the other data thats coming from right from large firms, like im trying to using some employee records but that government is a very special company today. I cannot find any significant effects, but that is 30 the result. My sense is that this paper only if im looking at federal employees, i dont think i can find something there. So if there are any more comprehensive data sets, thats including all capital firms can i think that would be very interesting looking at. Also very interesting to looking at from patterns of people. I noticed covers like dental and vision care. For traditional healthcare you need to buy actual dental coverage. Which is usually dollar for dollar trading. Sorry, dentist, its true. Also very interesting looking at the patterns of the expenditures for health. Preventive care is covered by housing account money . I yes, Preventive Care, just like the Affordable Care act makes it all free for everybody, mythical. Preventive, and you may seem some proposals, the value base, basically you need think nudges prevention in the pure sense of he never got anything, but given that you may have a chronic condition, how can you prevent it from getting worse, and thats an interesting redefinition of which is prevention which is to put a slight further down the scale and eventually there is not a full tank of gas. The question is who should become i think its your point, who should be making those decisions, somewhat at a distance are some who is affected by . Its interesting because people always, bristle at the idea that anyone other than to e budget should making these decisions but then i have 1 million caveats but we dont want to spend on having abortion. There are a million things want to add to that. The question is if we dont want the government doing it, are we going to have physicians deciding, you know, whats really important as Horse Health Care what people should be spend this money on, you can see a slippery slope and you can set you get into all sorts of issues with different people from one to the next being able to use this money for Different Things, which released a gracious not pragmatic, right . You have to have someone in the government making a decision within balance. If we believe people at every income levels will not spend for certain things unless its what Tax Advantages money, then i understand the slippery slope argument but we do have to cut off somewhere and if you dont make those decisions, then you just never had any funding at all for anything beyond Hospital Services and doctors visits. Wwere going to go to audiene questions and just another minute or two come at a what to go back to roy because roy has had to do with people at the irs. They are difficult. Thats right. Im sure theyre very nice people but its a different world. The extreme version of this is the old aflac commercial with yogi berra, give them cash which is just as good as mine but eventually people say whats that money going for . We are substantiation will be back off on that and all this nuisance paperwork and maybe once upon a time or something future they might ask you to say do you have any evidence for this . Generally speaking theres not a lot of backup for a people use the account. If we expand the parameters further, should we just say we think these people should get a certain amount of money . I hope they do some good with it because we are not talking a very carefully and lets cut out the nonsense. Or whats the other argument, which is your safeguarding the taxpayers money because you need to waste it on other programs. Is a real challenge. Those who have so the activities are probably going to be much more successful at getting glutenfree diet at the things that they have to eat celiac disease to maintain a healthy for somebody like me who just as it selfish allergy and im looking for subsidies for state. Probably not going to happen in my case where it might in the case of others. I think this does become the conundrum that we have to decide where, how far can we go . Because i dont think the iris even wants to be put in a position of having to make those decisions taxpayer by taxpayer. So can we provide clear enough guidance for people expected to follow it with good faith efforts to not violate and sort of trust but verify as needed the random audits, which is our current process of doing it. I do think thats probably going to be a reasonable approach. We could go as far as the professor suggested at harvard looking at the swiss system where we measured Peoples Health when they join their insurance, and five years later we measure it again and see if its the same, better or worse and then decide whether or not we need to assess them accordingly. Maybe theres some objective ways we can measure of u. S. Health. What you do to keep it there or make it better is okay with us. If it gets worse, then this going to be somebody get that at the end of the process and we wont quibble about the details in between. Im not sure what the right answer is, but we do have to look at the broader context of health will be on medical care and dr. Roth has good point in that regard. Youve been a very patient audience and mostly attended by think it with the microphones in evidence, if anyone has questions or disguised editorials in the form, a swing in your voice at the very income limit it to a minute or so and identify yourself. Otherwise you have to listen to my questions. You dont really want to do that. Thanks. Steve davis with double. We recently produce bayfront hsas in the individual market and without the were surprisingly few hsa qualified plans in that market. For some like to get roys thoughts on why they are so scarce, and then for dr. Roth in the scenario discussed by the government, the employer and the employee would contribute, how might the work in the individual market . So as to the question of why arent there more hsa qualified policies in the individual market, i dont think it was a priority as the aca was being rolled out their plans would have to meet not only the bronze or silver, some cases gold requirements under the aca but also the hsa be qualified as so. And over time as it is got more challenging part of the consumer the regulatory requirements as to what types of coverage those plans have to offer. For example, for a 2017, the requirement began to be added of covering things below the deductible that were not Preventive Care. Qualified policy can jus just do that come is prohibited under the law. Thankfully the was enough kicking and screaming that theres 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. And you cant really tell which ones make you eligible for an hsas versus not. So as to why people would choose one over the other, i dont know. I think theres a lot of confusion in the marketplace, and until people understand the value that it hsa brings to the table, along with High Deductible Health plan, they may not decide to choose that. I should confess first that my preference, when the Obama Administration did away and say were not going to let employers give employees the tax subsidized money that they wouldve used to purchase Health Insurance and let them go off and through hras by plans on exchanges i thought that was a big mistake because i thought the exchanges would not be robust enough to survive. And i think without propping up there having trouble now. I had envisioned, so we want to allow as many people as possible who dont have access to these tax subsidized funds to use them for the sorts of things that people who have those funds are lucky enough to use them for. I had envisioned that really a lot of it would be that his government contributions, all of this would be used to find converging exchanges where you would be able to purchase the plan and allocate between expenses of Health Care Plan and the hsa money having that slush fund to plight of the things that i think it is the possible to have those contributions, and to find the plans on individual markets hopefully that will allow you to use the money for other things. I have very interesting search come to the on when lookg at Group Insurance on individual market, i find individual market, the Health Account is kind of pure advantage, people in individual market, they should have a lot of plans so is that not true in your case . So there is not so many qualified plans in individual market for the Health Savings account . Is that what you find . What kind of plans in the individual market that offer . Like very low premium . Hyperemia below deductible . [inaudible] i couldnt often tell by the name and i think a lot was put in the silver costsharing eligible plans to provide those individuals with the subsidies in addition to the premium subsidies and ive done some modeling as to what individuals might be able to receive in the of a costsharing subsidy in the form of an hsa contribution that would produce the same actuarial value the costsharing reductions would produce. In some cases it could be several thousand dollars. One has to wonder why not give the individual at least the choice of choosing their costsharing subsidy in one form or the other. Cutout the middlemen. Right there, i believe you had a question. Im from the Health Resources and Services Administration and i have a twopart question. You had mentioned msas. One thing i find strange about the senate bill is a mention in multiple places larger msas, and if you could just clarify how you think that comes into play. And also sort of giving states flexible when it comes to Central Health benefit. We talk a lot about how hsas currently under the aca Preventive Care cover still cost even if you have when you start tampering with those, whats your opinion on how its going to affect Population Health outcomes . Ill start on the msas. They were the precursor to hsas as we know them, started 1997 after enactment in 1996 in the hipaa law. No new larger msas can be created as a december 31, 2007. There are still archer msas out there. We try to get all converted over to hsas. The advantages clearly better under the hsa but some still exist and you will find them, and self some of these references in the bill are still artifacts of the legacy of the larger msas. On the other, essential Health Benefit requirements, you do have a choice of whether you rely on the states defined in or have a uniform federal standard. Hsas really 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. So from an hsa perspective idleness early care who defined it and how it is defined, just be consistent across the board and dont have a separate stand for hsa qualified plans from other plans. Another question . Going once and yes. With the Panel Comment would the panel, on hsas connection to feeforservice . You have to come up with a receipt for some of the service 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 of that feeforservice linkage, and hsa being tied to a receipt as you say. I do think that medical care is evolving and were seeing much more bundling of services, packaging of services, which sounds like insurance but in a lot of cases is not. Its just a package of services that may be a diabetic needs a whole bunch of different feeforservice things but is bought and sold in the package with one price. We dont always know how much of each of those pieces you actually get under that price, and im concerned that the irs at this point is not clear on how it would handle those types of situations. Feeforservice is a very easy thing to gauge. You have a service, there is a receipt, we know what you got, how much you paid for it and, therefore, how much comes out of your hsa taxfree. When i start putting of the 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 him and say its all good, or the worst case in my opinion, none of it is good because its all been bundled and we dont know whether you actually got any medical care or health care or what have you, or not. I think this is a future issue we will have to grapple with. I dont think we have a good idea at this point how it would come out. I have a related question which i think its just an informational question, but when msas were first being promoted the idea which go to the doctor and because youre paying money out of your own pocket you could negotiate a really low price. That probably worth if a few people did appear probably didnt work o at a whole lot of people did it. Pretty sure blue cross can do a better job of negotiating prices that i can. So under current hsas, do you actually go to doctor to get a receipt and you submit it for reimbursement, or do you get negotiated prices for your insurer . I would prefer the latter option and i think probably most people would hear. For chile it is the latter option in most cases. If youre going to it in network provide under your insurance, you generally what get the negotiated rate, and it showed up to the Doctors Office how to collect the payment from you. Most of the ones ive gone to wait and submit it all to insurance and then tell me. They could be collecting what looks like what was a copay so they get some money out of me why im standing there in front of them, because ive seen studies suggesting people not paying their bills when it comes to the pay and chase method. So if youre in network you do get the benefit of the negotiated rate as opposed to the full bill charges. So that is a huge benefit to stay in network. Regardless of whether used in network or not you could use your hsa funds taxfree to pay it outofnetwork doctor just like in network doctor, although the amount would be different. A secondary concern which is more than just hsa is when your outofnetwork, that insurance may pay at the contracted rate and you may pay the entire amount outofpocket. When you get into Public Programs youve got some dispute as to whether that is fully legal or not. There is another hand back there. Its all still medical care. Thats right. Thanks very much for an excellent panel. I Service Director for the smart Healthcare Coalition eastern washington. Smarter Healthcare Coalition is made up of a variety of organizations, u. S. Chamber of commerce, pharma, lifesize companies and consumers i might add. So consumer groups Like National coalition on Healthcare Providers and other spirit where focus exclusively on issue tom brought up related to valuebased insurance design. My question for roy or anybody wants to comment is legislation, bipartisan, on the hill that is look at expanding the current preventive safe harbor to include services and drugs related to ones chronic condition. Its a limiting factor, just chronic conditions and theres a whole variety of definitions used by cdc, cms and others for what a chronic illness is. There is a limiting factor to it that if the panel could, i just expand it to include, to allow health plans to offer the service on a predestructible basis deductible. Unfortunate i dont know muh about the issue as i would like but i think this goes again to the fact that like a lot of my proposals it expand the definition of Preventive Care, obviously you are increasing the cost of the policies. So then the question is is that what you want to put the funds . Is there another way to help these people . I dont know what your experience has been with the. Actually i have a lot of experience with this issue. Generally im in favor of giving plans the flexibility to be able to do that. I know there are plenty of employers out there who are resistant to the specific hsa plans designs because they are concerned about individual employees who wont take your Blood Pressure medications, their insulin for their diabetes, et cetera, and they worry that without sort of compliance with those types of Treatment Options that they will, in fact, face significantly higher costs down the road. I do think that it makes sense to give health plans the opportunity to do that. It will cost as a bit more because theres greater coverage available under the plan, but the hope is that in the long term that will pay off in terms of controlling costs down the road. I have generally been supported of the approach. I just want to add one thing. Studies are actually showing that making the services that are designed to increase adherence cost free dont actually improve adherence all that much, which is why the next project im working on is to get going even further than your proposal and really paying decided tax incentives to give a negative cost. Because studies are showing to get the cost savings from approving it hears you actually have to go beyond just adding them to the Preventive Care definition. One followup. Just respond to the last point. You can do to waste ca it expand the current safe harbor or create a new safe harbor which is what the access to better track in the house diane black republican from tennessee and Earl Blumenauer from oregon a democrat both on ways and means would do. They create a new safe harbor that doesnt remove come it allows for costsharing. It would create that preflexibly for the services. The idea that steve and dr. Mark from universe of mission have done after ms. A lot of research on this issue date shown we dont impact preemies between two and 3 . I think the core issue is this is a growing component of the market, as you said, and a lot of these folks have chronic conditions and crates a barrier for then getting care. As well as just saying alternately they may end up in the emergency room cost for down the road. Thank you. You are very welcome. We are nearing our time of closure and departure. Healthcare is for simple dissolve, i think a massage of infinite resources. Im reminded of a different, routine by steve martin about three or four decades ago, uses a stick of how to become a millionaire . He said its a multi step at first get 1 million per the rest is more simple after that are were not in the world and the fact we are limited. What i think todays panel is saying to you is there are not perfect answers but the more that there is some flexibility and we can try to focus more on what this produces brother then what goes into it and begin to online and did a great because its usually not just one person or once an individual are some who think the bills, modesty, mixture rather, that if they are all pulling in the same direction with the same thing that we might get better aligned, least get more for what were spending the but with that epitaph please thank our panel for opening our eyes to some other way to think about this, and thank you very much. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] coming up later today Mollie Hemingway on her book trump versus a media. That is a shade of the story and certainly handson and a lot to do but the truth is even the iphone is a part as it was developed at apple would never what happened without scores of people working on the clock. Brian merchant on the creation and development of the iphone in his book, the one device is interviewed by New York Times reporter steve lohrs back part of the story is that the iphone was born as the software interaction paradigm was born behind steve jobs back. This group of guys likely document in the book started basically experimenting in a freewheeling research and it was fun and wild kind of stuff. It crazy projector rig that they were hacking different products to gather in creating what would become the iphone. What after words on sunday at 9 00 p. M. Eastern on tv. Us up in court ruled unanimously last month that the governments refusal to register trade marks that were offensive and trade vitamins finally it was brought by an Asian American rock bond. Will hear argument in case 151293 lee versus ten. May please the court. The statutory provision of issue in this case 15 us 1052 a