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Chairman Erik Paulsen delivered the opening statement for the Joint Economic Committee's Thursday hearing on "The Potential for Health Savings Accounts to Engage Patients and Bend the Health Care Cost Curve." The statement as prepared for delivery appears below: 

I call this hearing to order.

All Americans deserve access to affordable, patient-centered health care.

Unfortunately, the fight to achieve this worthy goal has become politicized to the point where it’s perilous to even acknowledge the shortcomings of our current byzantine system.

There are bipartisan solutions to this problem, and today we will be discussing one.

That is why I am excited to convene today’s hearing, titled “The Potential for Health Savings Accounts to Engage Patients and Bend the Health Care Cost Curve.”

When does a patient decide that a common cold isn’t worth the expense of a doctor’s visit? Or whether it would be worth saving dollars by going to a general practitioner who could easily treat an ailment rather than a pricey specialist?

Patients would have a hard time answering these questions, because the actual cost of care remains obscured until long after services are rendered. 

Even after patients receive an explanation of benefits, the true cost is obscured by what providers charged and what the government or insurers decided they would pay for a service.

This lack of transparency has contributed to rising health costs, which ultimately leads to more unaffordable insurance and even less satisfaction with the health-care system.

Yet, in the current environment, consumers and providers alike are divorced from the true cost of care.

As the economist Milton Friedman once said, nobody spends somebody else’s money as wisely or as frugally as he spends his own.

Americans are excellent comparison shoppers—television, direct mail marketing, billboards, and storefronts all appeal to consumers’ senses of value for price when making important choices for themselves and their families.

An important part of everyday life is making decisions based on personal preferences, needs, and, of course, cost, and it is for this reason that competition thrives among auto manufacturers, food producers, and home builders to deliver safe, healthy, and long-lasting products that people can afford.

We all acknowledge that American health care and health insurance are very expensive. In today’s hearing, we will investigate how health savings accounts, or HSAs, allow Americans to lower the cost of health care by drawing on an important area of their expertise: themselves.

HSAs have delivered great benefits, and there may be even more to come if lawmakers strengthen HSAs hold in the marketplace.

I believe they can broaden access to quality medical care, increase patient choice, and improve health for all Americans.

It is for this reason that I joined with Senate Finance Committee Chairman Orrin Hatch to enhance both Health Savings Accounts and Flexible Spending Accounts to give hard-working Americans more choice and control when it comes to their health care decisions.

According to one estimate, if half of employer-sponsored insurance incorporated HSAs, national savings in health-care spending could total $57 billion annually.

So how do they work? An HSA is a tax-exempt account set up to pay or reimburse certain medical expenses incurred while covered by the kinds of high-deductible health-care plans many Americans have today.

Employees and employers contribute funds pre-tax. Money that has gone unused can roll over year to year, and consumers continue to have access to the money even if they change employers or leave the workforce.

Since the creation of HSAs in 2003, the number of people who have an HSA has risen dramatically.

In 2005, roughly one million people were enrolled.

Today, 22 million people have HSAs. Americans clearly see the benefit of directing their own health dollars towards their own health care needs and expenses.

My own thrifty state of Minnesota has the third-highest enrollment in HSAs in the country, with nearly 1.2 million enrollees.

A 2016 study of large employers that offered consumer-directed health plans (CDHPs) in the form of high-deductible health plans with HSAs found significant long-term cost reduction and no evidence of worse health outcomes.

In recent years, the State of Indiana implemented an HSA structure both in its Medicaid program and in insurance offered to state employees. Then-Governor Daniels noted that this consumer-driven approach resulted in savings and customer satisfaction.

In 2010, state employees who enrolled were expected to save more than $8 million compared to their coworkers in the traditional health-care alternative.

Ultimately, the HSA is a vital tool that helps improve our health care system, even for those who don’t have an HSA. By putting consumers directly in charge of their health care, the health-care sector becomes more consumer conscious.

As in many areas of our economy, the answer usually lies in the wisdom of the American people.

I look forward to hearing from our distinguished panel of witnesses today how HSAs and the idea of consumer-driven health care can improve the affordability of health care.