HSAs Have an Answer to the Prescription Drug Cost Debate

by Joel White

Prescription drug costs are under a microscope in Washington. Even in our polarized politics, decisionmakers agree on the need for reform.

“The next major priority for me, and for all of us, should be to lower the cost of healthcare and prescription drugs,” said President Donald Trump in this year’s State of the Union address.

Similarly, Democratic Speaker of the House Nancy Pelosi has called for “real, tough legislation … to actually drive down the price of prescription drugs for seniors and families across America.”

What if we could use HSAs to achieve this goal? At the Council for Affordable Health Coverage, we have proposed a way to do exactly that.

Our latest drug affordability blueprint, Prescriptions for Savings: Policies to Increase Patient Access and Improve Affordability for Prescription Drugscalls for innovative changes that would allow HSA-eligible plans to provide upfront coverage for some prescription drug costs.

We know that HSAs are working to make healthcare more affordable and accessible – 25 million people wouldn’t be using these savings tools today if that were not the case – but laws on the books prevent them from doing more to rein in out-of-pocket costs for your prescriptions.

Presently, HSA-eligible plans are required to pass along much of the cost-sharing to the patient, even for routine and predictable drug-related health expenses, until they reach their deductible. This can create real affordability challenges for a host of patients who depend on their maintenance medications to get by.

When I helped write the law creating HSAs, we thought – rightly – that most consumers have some price sensitivity. They do. But a diabetic, for example, needs their insulin.  No amount of exposure to costs will change that fact. It makes little sense to punish diabetics, or make them less likely to choose an HSA, because the plan won’t cover necessary costs upfront.

And it’s counterintuitive. In order for these life-saving drugs to be effective, patients need to take them. Medication adherence is key to containing health care costs. Your HSA plan – and taxpayers – have an interest in making sure you stick to your prescribed therapies that lead to lower health costs in the long term.

With that in mind, our blueprint proposes to ease these inflexible requirements on HSA plans; instead letting them provide first-dollar coverage of prescription drug costs within the deductible.

That means no more waiting until you’ve spent a month’s paycheck on prescriptions before you start seeing lower costs at the pharmacy counter.

It means building on HSAs’ already sky-high 80 percent satisfaction rate from beneficiaries, and it means a solution to the drug cost debate on which policymakers as diverse as President Donald Trump and Speaker Nancy Pelosi should be able to agree.

Read more about our plan here.

Bryan CaplanComment