HSAs are no substitute for high-quality health coverage. Setting aside enough money to cover medical expenses isn’t realistic for most households, esp. those with low incomes who struggle to afford basic needs.
HSAs could cost people more than they save, while generating revenue for HSA providers.
People who have a low balance in their HSA or who have limited investment knowledge could pay more in fees than they gain in interest. For example, a person maintaining a $1,000 balance for a year could accrue 50 cents or less in interest, while paying as much as $47 in annual fees.
HSAs often come with junk fees and below-market interest rates for uninvested funds. These fees are sometimes waived for people with high balances, but people with low incomes or high health care expenses are unlikely to be able to maintain a high balance in an HSA.
To qualify for an HSA, people must enroll in a high-deductible plan or any bronze or catastrophic plan on the marketplace. While enrollees can deposit money into the HSA tax-free for medical expenses—if they can afford it—these tax savings do little to offset these plans’ high out-of-pocket costs.
HSAs are a tax shelter for the wealthy, masquerading as health policy. They benefit insurance companies and financial firms, while saddling low- and moderate-income consumers with high fees and below-market interest rates, contrary to misguided claims that HSAs “empower the patient.”
Marketplace enrollees’ premiums have skyrocketed following the recent expiration of PTC enhancements. Some have suggested health savings accounts and less generous plans as a more affordable alternative to comprehensive coverage. Here’s why that line of reasoning is flawed: 🧵
At 577 pages, there is much more to say about this proposal. But it’s clear that this proposal would make marketplace coverage less comprehensive and harder to get at a time when cuts from the Republican megabill are making it harder for families to meet basic needs.
The proposed rule would also expand eligibility and relax regulations for catastrophic plans, which don’t cover any benefits (other than preventive care and three primary care visits) until an enrollee reaches the maximum out-of-pocket limit — $12K for an individual or $24K for a family in 2027.
Some changes in the proposed rule would let insurers offer coverage on the marketplaces that is less comprehensive than currently allowed, making it harder for people to shop for high quality plans and exposing them to high medical costs.
The proposed rule builds on bad policy. It implements provisions from the harmful Republican megabill that would take marketplace coverage away from 1.23M lawfully present immigrants and reintroduces documentation barriers from a 2025 marketplace rule currently stayed by a federal court.
On the heels of expired PTC enhancements that resulted in 1 million—and counting—fewer people enrolling in #ACA marketplace plans for 2026, CMS released a proposed rule for 2027 that would reduce marketplace enrollment by 2 million people in 2027 alone. @claireheyison.bsky.social explains:
The House passed a measure today to extend the Premium Tax Credit enhancements for three years. The bipartisan vote shows there’s strong support for immediate action to make millions of people’s health care more affordable. All eyes are now on the Senate. x.com/JakeSherman/...
This week, the House is expected to vote on a bill to extend the Premium Tax Credit enhancements. This would reduce 2026 premiums for the average #ACA marketplace enrollee by more than half, improving affordability for millions of people struggling with health costs. www.cbpp.org/research/hea...
What a mess: "For example, a 60-year-old earning $63,000 would face a premium for a silver plan of $17,200 per year – more than one-fourth of their annual income..."
The House Republican bill ignores the urgent need to prevent premium increases for marketplace enrollees that will leave millions uninsured or having to make impossible choices, like paying for coverage or making car payments, affording groceries, and paying rent.
The bill also changes the way the government pays for cost sharing reductions, in a way that reduces PTC amounts, and would result in 300,000 people becoming uninsured each year from 2027 to 2035 per CBO.
Instead of extending PTC enhancements, the bill expands association health plans and health reimbursement arrangements – which would upset risk pools, raise marketplace premiums, and undermine protections for people with pre-existing conditions.
The bill fails to extend PTC enhancements, which would result in premiums rising in every Congressional district. Without ePTCs, people will lose access to $0 premium plans that help those with very low incomes get coverage and people with incomes just above 400% FPL will face a subsidy cliff.
The House Republicans’ response to expiring premium tax credit enhancements simply doesn’t respond to expiring PTC enhancements.
Instead, they recycle old Republican policy priorities and do nothing to address the impending marketplace affordability crisis.
This week is critical for health coverage affordability. CBPP’s @jenniferlsullivan.bsky.social breaks down what’s at stake as Congress votes on extending premium tax credit enhancements & the 3 key dates marketplace enrollees need to know when choosing 2026 coverage: www.youtube.com/watch?v=6QY5...
Tracy, 57, from GA, received this notice showing her #ACA marketplace premium rising from $82 to $1,616/month if premium tax credit enhancements expire — nearly a $19k increase next year. For her, that means choosing between coverage and essentials.
Even small premium payments make it more difficult to enroll in and maintain health coverage, especially for people with low incomes. If the enhanced tax credits expire the cost will hurt millions of families. Via @CenterOnBudget: momsrising.org/CBPPpremiumplans #TrumpInflationCrisis
Sens Cassidy and Crapo are circulating a health proposal that would do little to address the premium spikes millions of ACA marketplace enrollees will face starting Jan 1, and would further increase many people’s out of pocket costs for health care over time. www.axios.com/2025/12/08/s...
New HHS data on ACA marketplace enrollment for 2026 so far suggest a similar number of ppl have selected a plan compared to last year even as they see higher premium costs that reflect expiration of PTC enhancements. But don't make too much if it.
Sweeping federal policy changes are threatening people's access to affordable health coverage and care — but state insurance regulators and other state leaders can help stem the damage. A new report from NAIC consumer representatives explains how:
As new proposals addressing expiring PTC enhancements emerge, it's important to be clear about what makes a strong (or not so strong) proposal.
My colleague @jenniferlsullivan.bsky.social lays out key guidelines for evaluating these proposals.
Half of adults would be unable to pay an unexpected $500 medical bill. Policies that push people into bronze plans that expose them to greater out-of-pocket costs and greater financial risk would make affording needed care impossible for many.
45% of marketplace enrollees have income between 100-150% FPL ($15.7K to $23.5K). If enrolled in a bronze plan instead of silver, these enrollees could face:
❌ Deductibles 125X higher
❌ Out-of-pocket limits 5X higher
❌ Primary care visits 19X more expensive
❌ Inpatient stays 5X more expensive
Silver plans offer more generous coverage and people with low incomes must be enrolled in a silver plan to qualify for cost sharing reductions. Silver plans have lower deductibles, lower out-of-pocket limits, and lower costs for care than bronze plans.
Instead of a clean extension of PTC enhancements (which makes silver plans more affordable), some Republicans have proposed encouraging people to buy down to less generous bronze plans.
Don’t be fooled: While bronze plans often have lower premiums, people face much higher costs when they get care.
