HSAs growing, despite curbs in healthcare law…A good Read…

Health savings accounts, or HSAs, grew rapidly last year — though that growth could be threatened by provisions of the healthcare reform law.

The number of people using HSAs grew by more than 14 percent between January 2010 and January 2011, according to data released Tuesday by America’s Health Insurance Plans. Roughly 11.4 million people use the accounts, which receive special treatment under the tax code.

The biggest jump in HSA use came from health plans offered by large employers, according to AHIP. The large-group market saw a 26 percent increase in HSA participation, followed by a 15 percent rise among people who buy coverage on their own.

AHIP said in a release that the data will help warn members of Congress about “unintended consequences” of the new healthcare law.

The law prohibits the use of HSAs to pay for over-the-counter medicine without a doctor’s prescription. AHIP said new rules that govern insurers’ spending could also undermine HSAs.

The rules require plans to spend 80 or 85 percent of their premium revenues on medical costs, leaving only the remaining 15 or 20 percent for administrative expenses and profit. But plans that include an HSA are usually designed with high deductibles and low premiums.

“While these plans typically have lower benefit costs, they are not necessarily less costly to administer on a per-enrollee basis,” AHIP said. “Policymakers should recognize the unique nature of HSA plans to preserve consumers’ access to this important coverage option. ”

Sen. Orrin Hatch (R-Utah) has introduced a bill to expand the use of HSAs.

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