CMS To Test HSA Options for Medicare Beneficiaries
CMS on Monday announced a demonstration project that will allow insurers to offer Medicare beneficiaries health plans with components similar to health savings accounts, The Hill reports. Medicare law does not permit private insurers to offer HSAs to beneficiaries, but "[a] more limited precursor health insurance product known as medical savings accounts has been allowed in Medicare for almost 10 years," The Hill reports.
The products "have never been offered to beneficiaries," according to The Hill. Under the demonstration project, insurers would offer modified MSAs to beneficiaries enrolled in Medicare Advantage plans.
The modified MSAs would have lower annual contributions and more spending restrictions than typical private-sector HSAs, The Hill reports.
CMS is accepting applications from insurers thorough July 21, with final bids due on Aug. 10. The agency "provided few details about what the new plans would look like," according to The Hill.
HHS Secretary Mike Leavitt said in a statement, "We are giving Medicare beneficiaries the option of health savings account-type plans, as an additional choice among other health plan options in Medicare."
According to The Hill, the demonstration project is a sign that "the Bush administration is taking steps on its own to integrate" HSAs into Medicare at a time when "Congress has yet to make progress" on legislation that would promote the products in the private sector.
No pending legislation would permit HSAs in Medicare, but a bill introduced in January by Rep. Marsha Blackburn (R-Tenn.) and Sen. Lamar Alexander (R-Tenn.) would allow individuals who have HSAs when they retire to opt out of Medicare and use the accounts and private insurance instead. The bill "would provide Medicare dollars for beneficiaries either to deposit into their accounts or to use to pay their private insurance premiums," The Hill reports.
Blackburn said in a statement, "While the demonstration project is a step in the right direction, it still does not solve the problem for the individual who has an HSA and wants to keep full use of the HSA after becoming Medicare-eligible."
Alexander spokesperson Harvey Valentine said, "It's only right that Medicare beneficiaries should have the same choices as everyone else," adding, "We're pleased that CMS is taking steps to give Medicare beneficiaries more health care options."
Sen. Edward Kennedy (D-Mass.) said in a statement, "The Bush administration tried to replace the guarantee of Social Security with chancy private accounts, and now they're attempting the same thing with Medicare," adding, "These private accounts are a tax giveaway to the wealthy that will leave millions of seniors behind" (Young, The Hill, 7/13).