AS EMPLOYERS shift more of the cost burden to employees, legislation in Congress would nearly double the amount workers can put into health savings accounts. Under H.R. 5445, employees enrolled in high-deductible plans and opting for single coverage could in 2017 contribute up to $6,500 to their HSAs, while those with family coverage could contribute up to $13,100.
Under current law, the 2017 maximum HSA contributions are $3,400 for employees with single coverage and $6,750 for family coverage. The idea behind the measure is to let employees fund all of their out-of-pocket costs through HSA contributions.
Premium costs though would not be funneled through HSAs, but employee premium contributions could also be deducted on a pre-tax basis. Also, H.R. 5445 would increase the amount that employees over 55 years old would be able to contribute to their HSAs.
Under current law, workers who are older than 55 can make an extra $1,000 a year “catch-up” contribution to an HSA, but over-55 spouses cannot. The bill would extend this same right to spouses who are older than 55.
The measure is strong enough that it could receive bipartisan support and it comes at a time when out-of-pocket spending is on the rise. The House Ways and Means Committee approved the measure ona 23-15 vote in the middle of June. Out-of-pocket spending on inpatient hospitalizations has increased 37% in the years following passage of the health care reform law, according to the “Out-of-Pocket Spending for Hospitalizations among Nonelderly Adults” study, published by JAMA Internal Medicine.
From 2009 to 2013, among those receiving health coverage through the private sector, total out-of-pocket spending – also known as cost sharing – on hospitalizations grew from an average $738 to $1,013, according to the study. At the same time, individual health plans and consumer-directed health plans (CDHPs) also experienced the slowest growth in cost sharing.
Here’s what the study found:
- Cost sharing for patients in individual health plans grew 17% from 2009 to $1,875 in 2013.
- In the group health insurance market, cost sharing for inpatient hospitalizations increased 38% to $997 in 2013.
- Cost sharing for patients with CDHPs rose 25% to $1,219 in 2013.
- Cost sharing for non-CDHPs grew 34% to $957 during the same period.
- Out-of-pocket costs for hospitalizations among HMO enrollees swelled 34% to $1,075.
- Coinsurance related to hospitalizations increased from $518 in 2009 to $688 in 2013, and the amount applied to patients’ deductibles rose from $145 in 2009 to $270 during the four-year period.