Most Republican lawmakers' proposed ACA replacement plans include health savings accounts, Kaiser Health News reports. GOP leaders say HSAs will incentivize consumers to make smarter healthcare choices by shifting larger financial responsibility to customers and allowing them to stash tax-free funds to cover the costs.
Here are seven things to know about HSAs.
1. Approximately 26 million U.S. policyholders and dependents have a HSA-eligible plan.
2. Under current regulation, HSAs must be coupled with qualifying health plans with annual deductibles of at least $1,300 for individuals or $2,600 for families, according to the Internal Revenue Service. The maximum out-of-pocket expenses for HSA-eligible plans are $6,550 for individuals and $13,100 for families.
3. Policyholders pay for most physician visits, prescriptions or hospital stays until their deductible is reached, with some exceptions for preventive services like vaccines, drugs and cancer screenings.
4. Consumers can pay for their deductibles by making tax-free contributions to their HSA. The maximum contribution in 2017 is $3,400 for individuals or $6,750 for families. Unused funds are eligible to roll over and grow tax-free.
5. When policyholders change jobs or payers, HSAs move with them, similar to a 401(k) retirement fund.
6. Republican ACA replacement proposals, while varying, generally permit larger tax-free contributions to HSAs and include a broader number of medical services the funds can be used toward, according to the report. House Speaker Paul Ryan (R-Wis.) has proposed allowing the tax-free contribution to total as much as the plan's deductible and out-of-pocket maximum.
7. HSA supporters like the lower premiums accompanied with HSAs and the accounts' tax-free savings opportunity. Those who don't support HSAs argue the tax benefit favors individuals with higher incomes over people with lower incomes, according to the report.