This policy brief analyzes a glitch in the Affordable Care Act (ACA) that prevents many enrollees from accessing Health Savings Accounts (HSAs). Unlike employer-sponsored plans, most ACA high-deductible plans don't qualify for HSAs due to high out-of-pocket maximums. The authors propose granting exceptions to make these plans HSA eligible, estimating this would give 945,000 more Americans access to HSAs while costing $1.7 billion over ten years.
Key Takeaways
- There’s a significant disparity between employer-sponsored insurance and ACA marketplace plans regarding Health Savings Account (HSA) eligibility. While HSAs are popular in employer plans (covering 71 million individuals), only 3% of ACA enrollees choose HSA-eligible plans in 2024, down from 8% in 2014.
- The root cause is a technical mismatch in how maximum out-of-pocket (MOOP) limits are calculated. ACA plans’ MOOPs are indexed to growth in premiums, while HSA-eligible plans are indexed to consumer prices, creating an expanding gap that disqualifies many ACA plans from HSA eligibility.
- The proposed solution would affect a large portion of current ACA enrollees. About 68% (11 million) of ACA enrollees in 2023 had plans with deductibles that met HSA requirements but were disqualified only because of their MOOP limits. Fixing this would be relatively inexpensive, costing an estimated $1.7 billion over ten years.
- The current system particularly impacts individual market participants, as they face higher deductibles than those with employer coverage ($4,900 versus $1,900 on average) but can't access the tax advantages of HSAs to help manage these costs.
