HUNT VALLEY, Md., June 28, 2012 – In a move that could be a catalyst for additional growth of Health Savings Accounts (HSA) and their related consumer-directed health plans (CDHP), the U.S. Supreme Court deemed the entire Patient Protection and Affordable Care Act constitutional. The legislation was upheld in its entirety, including the individual mandate that requires all citizens to obtain health insurance or be subject to a penalty. The 5-4 majority opinion upheld the mandate as a tax which is constitutional under Congress’ taxation power.
Individual Mandate and Consumer-Directed Healthcare
As a result of the ruling, CDHPs could be poised for significant growth due to the individual mandate and new state-regulated Affordable Insurance Exchanges. Scheduled to begin in 2014, the exchanges will allow employers and consumers to shop for their healthcare plan by evaluating different premiums, out-of-pocket expenses and direct payments side by side, ultimately making the most informed choice.
Additionally, hospitals will be required on a state level to be more transparent when it comes to costs and disclose all charges for medical services, according to the Health Care Transparency Promotion Act of 2012. Cost transparency can strengthen the relationships between hospitals, healthcare professionals and consumers, by reducing unexpected medical bills. Moreover, this has great potential to allow consumers to make educated healthcare decisions, as they will be able to easily price shop for medical services and products.
“This important decision by the Supreme Court reaffirms ConnectYourCare’s commitment to providing innovative, consumer-friendly tools to help patients successfully navigate the complexity of healthcare accounts,” said Jamie Spriggs, President, ConnectYourCare. “Regardless of what may happen in the future with Obamacare, HSAs are here to stay, and we will remain nimble and responsive to help our clients and their employees realize cost savings and improve health.”
CDHPs typically include high-deductible insurance plans paired with HSA or an employer-funded health reimbursement arrangement (HRA), allowing participants to pay for routine healthcare services with pre-tax funds. These tax-advantaged accounts are designed to make consumers more cost-conscious while providing tools that allow them to ultimately select the most appropriate care options for their individual needs.
CDHPs are already on the rise. An analysis of the Mercer National Survey of Employer-Sponsored Health Plans, commissioned by the American Association of Preferred Provider Organizations (AAPPO) reported that enrollment in CDHPs grew by 18 percent in 2011, up from 28 million in 2010 to 33 million last year.
Additionally, the study found that 13 percent of all employees participating in employer-sponsored plans chose CDHPs in 2011. This growth represents the biggest increase in plan participation of all the healthcare plans. Even before the ruling, 48 percent of all employers reported plans to offer a CDHP in the next 5 years, according to the study.
ConnectYourCare’s consumer-directed healthcare (CDH) benefit delivery platform provides a pathway for migration to account-based health plans, supplying tools for consumers to better manage their healthcare dollars. ConnectYourCare’s core strategy is based upon providing stewardship to our customers by helping them simplify complex health benefit concepts, motivate individuals to act, and execute a successful solution, resulting in long-term health benefit cost containment. Please visit www.ConnectYourCare.com for more information.