When insurance companies and their lobbyists and their organizations are against something they always play the fear card: If you try to apply laws to us we will have to raise prices for consumers. Get over it...insurance companies are typically against any regulation of their conduct. In a bill that would not become effective until December 31, 2010, HR5719 proposes Substantiation of amounts paid or distributed from health savings accounts.
HR 5719: You can read it here: http://www.govtrack.us/congress/billtext.xpd?bill=h110-5719 The law provides that the TRUSTEE of a health savings account (Yup, the insurance companies) is responsible for substantiating the holders of health savings accounts and the amounts paid or distributed out of such accounts by January 15th of each calendar year.
Why should consumers have a view of this either way? My take: Insurance companies are pushing high deductible plans in conjunction with Health Savings Plans. Health Savings Plans are funded by consumers with pre-tax dollars and often consumers do not lose the money they put aside if it is not used up in a calendar year...they carry it forward. In this way, these plans differ from employer Flexible Spending Accounts (FSA's) because in those, employers own the account. FSA's you bet have substantiation because any unused dollars in those accounts are kept by the employer at the end of the calendar year.
So what, you ask? Well, insurance companies want people to be able to spend their own money on health expenses and they really don't care how it's spent. As it is now, wealthier consumers can put more pre tax dollars into these accounts and can use them on any "medical" expenses, retaining receipts for those expenses in case the IRS comes a callin'. Nobody is checking whether Molly Moneybags is spending down her pre tax dollars on expensive skin cream or spa treatments, those things with a tenuous tie to health and that currently go un-substantiated. In this way, the Health Savings Accounts become business as usual, allowing those with more money to put more pre-tax dollars into these savings accounts and spend them on "medical" expenses that are rarely verified or SUBSTANTIATED. Insurance companies like this model. First because they keep balances up in these accounts they administer and second because it makes it easier to sell high deductible insurance, an inferior product for a pretty dear price.
Now we can go read the response of the National Association of Health Underwriters to this proposal for substantiation by insurance companies that money spent from health savings accounts actually be spent on eligible health expenses:
http://www.nahu.org/legislative/MSAs/HSAs-HSSAs/index.cfm
NAHU is against such substantiation requirements of 5719 first because how dare anyone try to decrease fraud in the health services industry by requiring that pre-tax dollars actually be used for health expenses and second because THEY would be responsible for actually maintaining accuracy in their own records. Besides, why should they be responsible for anything, as the memo states, "current law already requires individuals with an HSA to keep and supply receipts..."
Health insurers want to provide less actual insurance (covering the risk of the cost of illness) for more money...high deductible plans are a sweetheart for them...premiums that pay for costs that don't kick in until a higher threshhold of expense is reached...of course they're against reducing tax fraud within the health savings account arm of this latest scam...it doesn't affect them!
