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Rep. Greg Steube, R-Fla. Credit: Steube

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Bill Could Give Low-Income ACA Exchange Plan Users HSAs

By Allison Bell

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What You Need to Know

  • Cost-sharing reduction subsidies help moderately low-income exchange plan users cope with deductibles and co-payments.
  • The Steube bill could replace more than $1,000 per year in subsidy support for a user with cash in an HSA.
  • The user would have to buy high-deductible coverage and draw from the HSA using a medical debit card.

A House Republican has come up with an idea for a new way to help moderately low-income U.S. residents pay for health care.

Rep. Greg Steube, R-Fla., wants to replace some of the subsidies that now help people use their Affordable Care Exchange exchange plan coverage with contributions to health savings accounts.

H.R. 5608 — the Affordable Care and Comprehensive Economic Support Through Savings Act bill, or ACCESS Act bill — would let an exchange plan user who is eligible for an ACA cost-sharing reduction subsidy get cash in an HSA in place of the cost-sharing reduction subsidy.

The federal government would pay an amount equal to the available subsidy to the insurer, and the insurer would put the cash in an HSA.

What it means: For Republicans, many health system change proposals continue to involve efforts to find new ways to use HSAs and similar types of accounts.

The ACA exchange system: When members of Congress were drafting the two-law package that created the Affordable Care Act of 2010, they included the ACA public exchange provisions in an effort to get more young, healthy to pay for coverage, and to help hold down the average amount of claims per enrollee

Drafters wanted the exchange system to create a Travelocity for health insurance, where consumers could shop for individual major medical insurance policies without worries about medical underwriting and use federal subsidies to pay for the coverage.

The U.S. Department of Health and Human Services provides exchange plan services in many states through HealthCare.gov.

Some states operate their own state-based exchange programs, such as Covered California and Your Health Idaho.

The ACA exchange plan subsidies: The federal government provides two types of subsidies: premium tax credit subsidies and cost-sharing reduction subsidies.

Premium tax credit subsidies help pay the plan premiums for people with income between 100% and 400% of the federal poverty level, or between $13,590 and $53,360 for an individual in most of the country.

Cost-sharing reduction subsidies help exchange plan users cope with “cost-sharing” bills, or the money a patient with insurance spends on deductibles, copayments and coinsurance amounts.

For 2023, the maximum annual out-of-pocket spending limit for an individual’s covered services is $9,100.

The government provides cost-sharing reduction subsidies to help people with income from 100% to 250% of the federal poverty level cope with the cost-sharing bills.

H.R. 5608: The new bill would let an exchange plan enrollee who wanted an HSA get a high-deductible “silver level” exchange plan — or policy designed to pay about 70% of the value of a standard package of benefits — and an HSA tied to a medical debit card.

The patient would have to use the debit card to have the HSA pay for current medical expenses. The patient could have the HSA pay for dental care, vision care and hearing care as well as other types of health care.

The program would go live in 2025, and the bill would pay for an HSA option public education program.

The amount contributed to the HSA for an enrollee who stuck with the HSA option for a full year could exceed $1,000.

Congressional Research Service analysts recently noted that the value of the cost-sharing reduction subsidies can vary widely but might reduce the annual deductible for a Kansas resident with income at 150% of the federal poverty level by $4,850, to $550.

Analysts at KFF estimated that, for a household of one with income between 200% and 250% of the federal poverty level, the cost-sharing reduction subsidy could reduce the annual out-of-pocket spending maximum by $1,450, to $7,250.

Legislative mechanics: Steube has lined up one cosponsor for the bill, Rep. Kat Cammack, R-Fla.

The bill is under the jurisdiction of the House Ways and Means and House Energy and Commerce committees.

Americans for Prosperity, a group that believes in reducing federal government spending and pruning federal government regulations, is supporting the bill.

Rep. Greg Steube, R-Fla. Credit: Steube

Allison Bell

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