High-deductible plans, health savings accounts could repair the ACA

Now that repairing or replacing the Affordable Care Act has become a "realistic possibility," any new plan to fix the healthcare system should feature two key elements: High-deductible plans and health savings accounts (HSAs), according to an opinion piece published by the Wall Street Journal.

Authors Scott W. Atlas and John F. Cogan, both senior fellows at the Stanford University's Hoover Institution, argue that the ACA has led to rising health insurance premiums, fewer provider choices for consumers and industry consolidation that is likely to drive up costs. But there are ways to combat these trends, they write.

Recent research from Carnegie Mellon University, for instance, has shown that high-deductible plans can lower healthcare spending without later increasing visits to the emergency department or hospitalizations. Such plans allow insurance coverage to fulfill its core purpose of protecting individuals from the risk of major, unplanned medical expenses, according to Atlas and Cogan.

HSAs, meanwhile, allow consumers to put aside tax-free money in an individually owned account to pay for treatment and services. Because they require consumers to pay for care themselves, HSAs can encourage individuals to be selective about their healthcare spending choices and push providers for price transparency. In fact, the same Carnegie Mellon study found that a combination of high-deductible plans and HSAs can reduce healthcare spending by 15 percent every year, the article notes.

In order to encourage the use of these two key elements for an ACA fix, the government should raise the maximum allowable contribution for HSAs and expand the breadth of services and products that consumers can purchase with them, Atlas and Cogan write. Further, the government should eliminate the ACA's restrictions on high-deductible plans and regulations regarding who can open an HSA account.

Perhaps "one of the most realistic changes" to the ACA, however, could come from a repeal of the law's planned expansion of the small-group market, FierceHealthPayer has reported.

Republican candidates also have their own ideas, such as Scott Walker's plan to extend refundable tax credits to help individuals pay for private health insurance based on their age, or Donald Trump's idea to sell insurance plans across state lines.

To learn more:
- read the opinion piece

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