HHS’s “Medical Loss Ratio” Rule: Keep Your Health Plan?

“[I]f you like your…health care plan, you can keep it.”

President Obama on ObamaCare, August 15, 2009

Invoking ObamaCare, the U.S. Department of Health and Human Services (HHS) recently issued the new “Medical Loss Ratio” rule that could decimate Health Savings Accounts (HSAs). HSAs are accounts for individuals with high deductible health plans that allow individuals to make tax-exempt contributions toward their long-term health care. HHS’s rule will force five million Americans who now have HSAs to find new health insurance plans.

Nearly 14 million Americans use HSAs as their health insurance, five million of whom are self-employed, work for small businesses, or are individually insured. HHS’s new “Medical Loss Ratio” rule will discriminate against these five million Americans and will declare their high-deductible plans as ineligible for the health care exchanges that the government is establishing. Banning HSAs from the exchanges will destroy a significant portion of the HSA industry.

The Obama administration is targeting HSAs because they are based on free-market principles as opposed to the top-down, government-knows-best principles of the Obama administration. Republicans in Congress who have demanded full repeal of ObamaCare have been slow to resist this new rule. Democrats seem unconcerned that with this new rule the president will break his promise that, under ObamaCare, Americans could keep their current health plans.

The time to act is now: Republicans must oppose this “Medical Loss Ratio” rule. HSAs offer flexibility not found in the crony-capitalist world of the insurance companies and their government allies who pushed this rule, which pads the companies’ profits. HSAs are valuable alternatives for health care coverage, and HHS shouldn’t force five million Americans into new health plans.

Jack Inglewood About Jack Inglewood

Jack Inglewood is the pen name of a Washington insider with 20 years of legislative and campaign experience.