Healthcare Financial News

Health savings accounts (HSAs) represent an important option for consumers seeking more control over their healthcare spending, but statutory contribution limits make it unlikely that these accounts will play more than a minor part in savings for healthcare costs in retirement, according to a new study by the Employee Benefit Research Institute (EBRI).

“The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses,” concludes the study, published in the August issue of EBRI Notes.

The study notes a number of limitations of HSAs:

• Contributions are limited. This year the maximum contribution is $2,900 for an individual and $5,800 for families. Contribution limits and catch-up contributions are indexed for inflation.
• In order to qualify for tax-free contributions to a health savings account, individuals must be covered by a qualified high-deductible health plan—one that has an annual deductible of at least $1,100 for individual coverage and $2,200 for family coverage in 2008.
• Because HSAs are linked to high-deductible health plans, it is likely HSA owners will tap their accounts to pay for medical expenses during their working years. In addition, distributions cannot be used for employment-based retiree health insurance until an individual has reached age 65. Thus, early retirees do not have immediate access to HSA accounts for retiree health premiums.

Download the report.

The Centers for Medicare & Medicaid Services (CMS) has announced a pilot program to test options for Medicare beneficiaries to maintain their health records electronically. Under this pilot, a beneficiary may choose one of selected commercial personal health record (PHR) tools, and Medicare will transfer up to two years of the individual’s claims data into the individual’s PHR. The program is open to beneficiaries covered by original Medicare; it will be conducted in Arizona and Utah and is scheduled to begin in January 2009.

Beneficiaries can add other personal health information to the PHR if they choose. Depending on the specific product, they may be able to authorize links to other personal electronic information such as pharmacy data. PHRs can offer links to tools that help consumers manage their health such as wellness programs for tracking diet and exercise, medical devices, health education information, and applications to detect potential medication interactions. Beneficiaries can elect to allow family members to have access to their PHR. They can also provide access to the PHR to their healthcare providers.

“This pilot is designed to evaluate how well PHRs meet the needs of our beneficiaries and whether PHRs can improve health outcomes and lower costs.” said CMS Acting Administrator Kerry Weems. Get more information.