Skip to main content

Analysis

Treasury Expands Preventive Care Benefits for High-deductible Plans

By John Commins  
   July 17, 2019

In prior guidance, the Internal Revenue Service and the Treasury have not included preventative care for services or benefits meant to treat an existing condition.

The U.S. Treasury has expanded preventive care benefits provided by high deductible health plans for some chronic conditions.

Under a notice issued Wednesday, HDHP enrollees can deduct contributions to a health savings account for medical care and prescription drugs for conditions such as diabetes, asthma, depression, and heart failure.

The expansion is the Treasury's response to President Donald Trump's executive order last month.

In prior guidance, the Internal Revenue Service and the Treasury have not included preventative care for services or benefits meant to treat an existing condition.  

"However, the Treasury Department and the IRS are aware that the cost barriers for care have resulted in some individuals who are diagnosed with certain chronic conditions failing to seek or utilize effective and necessary care that would prevent exacerbation of the chronic condition," Treasury said in the notice.

"Failure to address these chronic conditions has been demonstrated to lead to consequences, such as amputation, blindness, heart attacks, and strokes that require considerably more extensive medical intervention," the notice said.

Treasury Secretary Steve Mnuchin said the Trump administration's expansion of preventive care benefits and access to health savings accounts "will enable more Americans to exercise greater control over their medical care."

"Cost barriers should not prevent those suffering from chronic conditions from getting the medical care they need. This more inclusive coverage will empower Americans to make the best healthcare decisions for themselves and their families," Mnuchin said in prepared remarks.

The notice does not affect the status of any medical care previously recognized as preventive care.

Mark Fendrick, MD, director of the University of Michigan's Center for Value-based Insurance Design, said the coverage expansion comes "as more and more Americans are facing high deductibles…. (and) struggling to pay for their essential medical care."

"Our research has shown that this policy has the potential to lower out-of-pocket costs, reduce federal health care spending, and ultimately improve the health of millions diagnosed with chronic medical conditions," Fendrick said.

Matt Eyles, president and CEO of America’s Health Insurance Plans, said that, for the 22 million Americans enrolled in HSAs, the new guidance "improves access to affordable medications, treatment and medical equipment – all before patients must meet their deductible."

"With this new policy, insurance providers will be able to offer enhanced preventive care before facing any deductible costs to help patients better manage their chronic conditions and avoid serious complications," Eyles said in prepared remarks.

Kim Buckey, vice president of client services at health insurance consultants DirectPath, called the expanded preventive benefits "good news for employers and employees."

"Many employers have been covering these types of medications as 'preventive' for these types of patients for a while now, so it’s encouraging to see the IRS recognizing what’s becoming standard practice, Buckey said.

"Hopefully, covering these medications pre-deductible for HDHP participants will encourage patients to fill those prescriptions, stick to the regimen prescribed by their doctors and delay/prevent the onset of more serious and acute conditions—which, in turn, will save both the employer and the employee money," she said.  

“Cost barriers should not prevent those suffering from chronic conditions from getting the medical care they need.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Under a notice issued Wednesday, HDHP enrollees can deduct contributions to a health savings account for some care and drugs for certain chronic conditions.

The expansion is the Treasury's response to President Donald Trump's executive order last month.

Treasury Secretary Steve Mnuchin said the expansion of preventive benefits 'will enable more Americans to exercise greater control over their medical care.'


Get the latest on healthcare leadership in your inbox.