How the Latest Executive Order Affects You
President Trump signed an executive order on June 24th to encourage the increased use of HSAs and further healthcare transparency.
This executive order may be the start of much-needed relief for Americans cut-out of the tax-saving benefits of HSAs. While the Order doesn’t issue new law, it does hold other federal agencies accountable for enacting change by setting a defined roadmap. These other federal agencies include Department of Labor, Department of Health and Human Services, and Department of Treasury.
Changes outlined for improvements to HSAs and FSAs:
- Allow individuals to continue contributions to HSAs while receiving additional pre-deductible preventive care when enrolled in a High Deductible Health Plan. This will specifically include “medical care that helps maintain health status for individuals with chronic conditions.”
- Treat “certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries,” as eligible medical expenses. This allows tax-free payments to concierge health services and healthcare co-ops from an HSA or FSA.
- Increase the yearly allowed carry-over amount in FSAs. Currently, individuals can carry-over a maximum of $500.
Changes outlined to improve healthcare price and quality transparency:
(These items could provide patients knowledge to make informed choices and create a competitive marketplace for healthcare providers)
- Inform patients about actual prices. A proposed regulation will require hospitals to publicly post and regularly update charges (including negotiated rates) for services, supplies, and fees in a consumer-friendly format.
- Proposed rule-making would “require healthcare providers, health insurance issuers, and self-insured group health plans to provide information about expected out-of-pocket costs” to patients before they receive care.
- Issue a report describing how price and quality information is hidden from patients and provide recommendations for eliminating the impediments.
- Develop a Health Quality Roadmap to “improve reporting of data and quality measures” across various government health programs. This roadmap “shall include a strategy for establishing, adopting, and publishing common quality measurements; aligning inpatient and outpatient measures; and eliminating low-value or counterproductive measures.”
- Increase access to data that makes healthcare information more transparent and useful to patients. The Order requires the availability of anonymous claims data. This will provide patients additional insight into actual services and costs.
The timelines of implementing these instructions are anywhere from 60–180 days. In the coming months we should see more activity as the respective agencies set forth their plans and policies.
Due to the directives of this executive order action has already been taken. In Notice 2019-45 the Treasury Department and the IRS, along with the Department of Health and Human Services, have expanded the list of medical care services and items allowable under the definition of “preventive care.” Additional medical services, medical items, and prescription drugs may now be covered by a High Deductible Health Plan (HDHP) on a pre-deductible basis. (Though the coverage of these medical services and items is not required to be provided without cost-sharing to the individual.)
The agencies recognized that without access to care (or with access that includes a cost barrier) individuals may not receive needed medical attention putting them at risk of “amputation, blindness, heart attacks, and strokes that require considerably more extensive medical intervention.” This makes the change necessary for both the nation’s health and well-being as well as the healthcare economy.