Lawmakers Divided on Affordable Healthcare, Patients Aren't

Rising healthcare costs continue to squeeze household finances.

Washington is divided over how to respond. But new public opinion data suggest that patients agree on an answer.

More than eight in 10 voters say they would react positively to an elected official who believed that "[t]o improve health care, we need to fund patients, not the system," according to polling from Fund the Patient, a nonprofit organization. That support crosses party lines; similar shares of Democrats, Republicans, and independents feel that way.

What might such a patient-first policy look like? It starts by expanding access to tax-advantaged health savings accounts.

More than 80% of voters agree with that idea. They want control over how to spend their healthcare dollars, rather than deferring to the judgment of their insurance company.

Transforming patients from passive consumers to active shoppers for care has the potential to yield better-quality care at lower cost.

HSAs allow patients to sock away money for use on future medical expenses.

But, unlike a traditional savings account, HSA contributions are triple-tax-advantaged. Deposits are not subject to income tax.

The funds in an HSA grow tax-free. And money can be withdrawn tax-free, as long as it goes toward qualified medical expenses.

Together, these tax benefits can add up to real savings for patients. Someone in the 22% tax bracket — a single person with income roughly between $48,000 and $103,000, or a married couple with income between $96,000 and $206,000 — can end up saving nearly 30% on anything purchased with money from their HSA.

Crucially, HSAs provide these significant discounts in a way that lets patients — and not insurers, government bureaucrats, or hospital administrators — decide how best to spend their healthcare dollars.

Lower out-of-pocket costs and greater patient autonomy aren't the only reasons to support HSAs. By giving patients more power to shop for care and compare prices among providers, these accounts also introduce market incentives that promise to drive down prices in the long run.

One study of large employers that offered consumer-directed health plans combined with HSAs found significant long-term cost reduction — and no evidence of worse health outcomes.

Unfortunately, HSAs continue to remain hemmed in by strict federal rules that limit both their utility and their availability.

For instance, until recently, only certain high-deductible insurance plans could be paired with these savings vehicles.

The federal budget bill signed into law by President Trump last July loosened those restrictions to make HSAs compatible with all bronze exchange plans as well as catastrophic plans.

It also allowed patients to use HSA funds to pay for direct primary care, a subscription-style service that generally offers patients unlimited access to a primary care physician and certain related services for a flat monthly fee.

Both provisions represent progress. But there is little reason why HSAs shouldn't be available to Americans with any sort of coverage — or no coverage at all.

By the same token, the long-standing limits on how much patients can contribute to an HSA each year need to go — or at least be raised significantly.

This year, individuals are allowed to contribute only $4,400 to their HSAs, while those on family plans can put up to $8,750 away.

Those 55 and over can contribute an extra $1,000 to their HSA.

Allowing people to save more money — especially in their younger years, when their ability to save almost certainly eclipses their need for care — will help them prepare for the reality of aging, when their medical expenses will begin to grow.

It will also empower them to take control of their care in the short term — and decide where their healthcare dollars will go, both now and in the future.

Put differently, HSAs are a way to fund patients, not the system — exactly what patients say they want.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Healthcare Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It." Follow her on X @sallypipes. Read more Sally Pipes Insider articles — Click Here Now.