Fact Sheet: Expanding Health Care Coverage and Lowering Costs

President Bush Has Spearheaded Creation Of Health Savings Accounts, Which Are Saving Americans Money While Increasing Their Health Care Options

"Health savings accounts all aim at empowering people to make decisions for themselves, owning their own health care plan, and at the same time, bringing some demand control into the cost of health care."

– President George W. Bush, 1/26/05

Today, President Bush will participate in a roundtable discussion on Health Savings Accounts (HSAs) with small business leaders in Oklahoma City. The President believes that the cornerstone of good health care policy is ensuring that patients and health care providers are in charge of medical decisions. Products like HSAs encourage consumer ownership of health care decision-making and allow Americans to benefit from the affordability and flexibility of HSAs and HSA-eligible health plans. While a candidate in 2000, then-Governor Bush promised to expand the availability of account-based plans to provide health care alternatives and savings to American families, and has championed HSAs throughout his presidency. Under his leadership, Congress established HSAs as part of the Medicare reform bill President Bush signed into law in December 2003, and he is working to build on the success of HSAs by changing the tax code to give all Americans better access to affordable health insurance.

• Today more than 6.1 million people are covered by HSA plans, up 35 percent since 2007. Low- and moderate-income Americans and those previously uninsured are enrolling in HSA plans. In 2005, the most recently available data, more than one-third of HSA policyholders in 2005 had incomes under $50,000 per year, and one-third of individual HSA policyholders in 2005 were previously uninsured.
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• As of January 2008, more than 1.8 million small business workers and their dependents were covered in HSA plans, up 72 percent since 2007. The latest survey data indicate almost one-third of those newly insured through small-group coverage were enrolled in an HSA plan.

HSAs Are Helping Small Businesses Provide Health Insurance

This week, the Treasury Department and the Small Business Administration announced a new website, www.HSA.gov, to assist small businesses and consumers in understanding the value of HSAs. The website provides small businesses with information on how HSAs can help meet their employees' health insurance needs. It provides information about HSA plans, comparisons to other health coverage options, and materials to help employers and individuals determine whether and how to enroll in HSA-eligible coverage. Additionally the site shows how to save for health care costs through an HSA. While many Americans have access to health coverage through their employers, many other employees work for companies – often small businesses – that are looking for solutions to provide health insurance benefits.

HSAs Are Making Health Care More Affordable And Accessible For Many Americans

HSAs allow Americans to save pre-tax dollars to pay for current and future medical expenses.

The Health Savings Account is accompanied by an HSA-qualified insurance plan that can cover major expenses, often including preventive care, and provides security against high or unexpected bills. HSA-qualified insurance plans may have higher deductibles, but offers savings through lower premiums which can be put toward funding the account. In addition, employers may contribute to their employees' HSAs. Further benefits of HSAs include:

• Ownership and Portability: Account funds remain from year to year (similar to an IRA): there is no "use it or lose it" rule for HSAs. Individuals keep their HSAs even if they change jobs, change health coverage (to another HSA-eligible plan), or become unemployed. Furthermore, HSAs are an inheritable asset.
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• Savings: Policyholders receive a tax deduction when they contribute to their account, any investment earnings in the account are tax-free, and withdrawals from the account for qualified medical expenses are tax-free. Contributions are excluded from income and wages for employers.
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• Flexibility: Patients can use HSA funds to pay for current medical expenses that their insurance plan may not cover or choose to save the money for future needs, such as: health insurance premiums or medical expenses if unemployed, medical expenses after retirement (before Medicare), out-of-pocket expenses when covered by Medicare, and long-term care expenses and insurance.
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• Control: Policyholders make decisions about how much to contribute, whether to pay current expenses with the account or save for future expenses, which medical expenses to pay for with the account, which company will hold the account, and investing decisions for the money in the account.