Committee Approves Ryan Bill to Expand Health Savings Account Options
The House Committee on Ways and Means today approved legislation coauthored by First District Congressman Paul Ryan that would expand opportunities for both workers and employers to contribute to health savings accounts (HSAs). Together with Congressman Eric Cantor (R.-Va.), Ryan sponsored this bill - H.R. 6134, the Health Opportunity Patient Empowerment Act - to build on the promise that HSAs have already shown and allow patients and businesses to make the most of this new tool to manage health care expenses. The next step for this legislation is consideration by the full House of Representatives.
HSAs have been a health coverage option since the Medicare Prescription Drug law took effect in January 2004. Congressman Ryan coauthored the provision in that law that allowed HSAs as a vehicle for health care savings. Health savings account holders or their employers purchase a high-deductible insurance plan that covers large hospital bills and major expenses due to serious illness, while the patient's routine medical expenses are paid for out of their health savings account - an account where they set aside tax-free savings for lifetime health care needs. Individuals, employers, or even family members can contribute money to an HSA, and these accounts are portable from job to job.
Reliance on HSAs has grown dramatically since they became a viable option for health coverage. In November 2004, about 438,000 individuals were covered by HSA-type insurance plans. Today, roughly 3.2 million people are covered by HSA-type plans. Many of the new HSA holders were previously uninsured. For example, forty-one percent of eHealthInsurance's HSA plan purchasers in 2005 reported being uninsured prior to buying their HSA plan.
"For many small businesses and individuals, HSAs make it possible to afford health-care coverage, while setting aside tax-free savings for future medical expenses. This consumer-driven approach is already beginning to help rein in medical costs. It's making a difference for Wisconsin employers and families, and we need to make sure that HSAs are accessible to those interested in this coverage option," Ryan said.
Ryan's new legislation, the Health Opportunity Patient Empowerment Act, would make it easier for individuals and small businesses to contribute to HSAs and effectively use this savings option to pay for health care costs.
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