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HSAs Facing Pressure In Washington As Their Popularity Grows

In the first days of Prsident Obama's administration, it has become clear to insiders that Health Savings Accounts (HSAs) are under some pressure.

This attitude is in contrast to reports from insurance and banking providers as well as surveys which show them growing in popularity among individuals and companies.

As one industry observer put it, "Washington has no connection to what is going on outside the beltway when it comes to HSAs."

On the positive side in terms of possible legislation, for small businesses there appears to be momentum for allowing firms to join business cooperatives to purchase healthcare.

A possible negative is that PPO's and other plans may be pushed in place of HSAs if such a plan clears Congress as many observers think it will.

Clearly, provisions in the Stimulus package point to a Democratic effort to expand universal healthcare through funding of healthcare for the poor and children.

Whether this will include provisions for an HSA type of plan is unknown. Many industry pundits are looking at the trials in Medicare HSAs to see if they are a viable offering for any government-sponsored single-payer program.

The high costs to taxpayers of such universal programs in Massachusetts and California may give legislators pause, but Washington observers believe that pressure will be exerted to pass such legislation this year.

The chief proponent in the Senate, Ted Kennedy (D-MA) is striving to make this his legacy prior to retiring, which may occur this year.

At the same time, surveys by Information Strategies, Inc. and others show that HSAs are a viewed positively by a majority of individuals polled in three states (Texas, Ohio, and Georgia.)

One poll, of 200 layed off workers at a single employer who opted to purchase individual plans in 2008, 51% opted for an HSA.

ISI expects that when the numbers are tallied for 2008 through January 2009, HSAs will have doubled in covered lives and account custodians versus the end of January 2009.

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