WASHINGTON, D.C. – U.S. Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee, delivered the following statement at today’s hearing on health savings accounts (HSAs). In his remarks, Senator Heinrich outlined the limitations of HSAs for working families, and emphasized that if Republicans are serious about bending the cost curve, they should stop sabotaging our health care markets and instead work with Democrats to reduce health care costs for consumers.
Below are his remarks as prepared for delivery:
“Thank you Mr. Chairman.
I’m looking forward to today’s discussion on Health Savings Accounts.
These tax-free savings accounts play a role for some consumers to cover health care costs.
HSAs are particularly helpful for those earning more than $100,000 who are already saving for retirement, and have less trouble covering their monthly bills and student loan payments.
But HSAs do little to bend the so-called health care cost curve.
This is the problem we must focus on – how do we provide top-quality care while reducing our overall national health care spending AND lowering consumers’ out-of-pocket costs.
But HSAs seem to generate the most savings through cost shifting, not cost saving.
Here, employers pay less by offering skimpier plans coupled with an HSA.
But, employees shoulder a greater share of costs, the financial risks of getting sick, as well as yet another obstacle to navigate between themselves and their health care.
And this is happening at the exact time when wages remain stubbornly stagnant, and more and more families are struggling to get ahead.
But my chief concern is this: Part of the reason we are here today is that our Republican colleagues seem to be gearing up for yet another attempt to repeal the ACA.
If the new proposal is anything like the last, we can expect it to gut Medicaid, drop millions from coverage, take away comprehensive coverage, and further hike premiums.
Central to the Republican vision has been to move more and more consumers to high deductible plans, which have lower premiums but ask consumers to pay more for doctor visits and services before the health plan covers care.
If paired with an HSA, a family can put aside up to $6,900 tax free to use for qualified health expenditures. The investments in the HSAs grow tax free.
The thinking behind HSAs is that if people set aside money for their health care, they will spend it more wisely, and, on average, spend less. They will have some ‘skin in the game.’
The problem, though, is that without knowing what we’re paying for and how much we’re paying, consumers simply do not have the tools they need to make rational decisions about cost.
And HSAs are unable to help with this problem.
What we do know is that HSAs sometimes encourage people to forego needed care, which is the main way they save money.
If you need chemotherapy to treat your breast cancer, but you’ve underfunded your HSA and have a $2,700 deductible, what happens?
If your child gets sick, will you take her to the doctor or keep her at home based on how much of your deductible you’ve paid down?
If you or a loved one is grappling with an opioid addiction – a reality for far too many across the country and in New Mexico – will an HSA cover your treatment?
Can someone battling addiction or managing a serious mental health issue make enough money to save into an HSA?
These are important questions.
No matter where you live, what you do for a living, or what party you belong to, these questions are at the heart of our health care conversation.
I’m worried that HSAs – an idea that I agree works for some consumers – are being twisted into a quick-fix that will only exacerbate the challenges in New Mexico, such as our ongoing fight against the opioid epidemic.
I am all for working together on real solutions to make needed improvements to our health care system.
Improvements that will reduce costs on consumers, increase price transparency so consumers can make informed decisions, prevent surprise medical bills, as well as reduce the overall cost of health care in America.
But focusing on HSAs, while avoiding an honest conversation about the key drivers of health care costs, could have real negative impacts on real people who are simply trying to manage an illness or care for a sick loved one.
We must focus on actions that can bend the cost curve, like investing in preventive care, using the government’s purchasing power to lower drug prices, and paying for quality of care, rather than quantity.
And we have to focus on making things simpler for families.
I look forward to our witnesses’ testimony and to hearing their perspectives on how we can bring down health care costs for families.”
For more information, please contact Latoya Veal at Latoya_Veal@jec.senate.gov or 202-224-0379.