Health Savings Accounts: Are Lawmakers Being Target-ed or Amazon-ed?

Health Savings Accounts (HSAs) allow individuals to use pre-tax dollars to pay for high deductibles and other uncovered medical expenses. Currently, individuals are ineligible for tax-advantaged HSA contributions if they have “other” coverage in addition to a High Deductible Health Plan (HDHP.) Expanding HSAs to fund out-of-pocket expenses for routine healthcare places control directly in the hands of patients, a move that could bring down health expenditures. Large corporations are wrestling for control to direct where patients spend their hard-earned money.

A group of lawmakers recently introduced the “bipartisan” Health Savings Account Improvement Act of 2018 (H.R. 5138). This bill allegedly “expands” HSA coverage to allow use at “retail-based” (think CVS/Target) or “employer-owned” clinics (think Amazon) without losing eligibility to make tax-advantaged contributions to their HSAs. Increasing the flexibility of HSAs is a laudable goal yet, this legislation herds Americans like sheep into Minute Clinics for the benefit of corporate shareholders.

This bill should not become law. If HR 5138 passes, retail and employer-based clinics will become profit centers.   Alternative legislation, known as the Primary Care Enhancement Act (H.R. 365), amends the definition of “qualified medical expenses” to include fees paid to physicians as part of a “primary care service arrangement.” This common-sense legislation flounders in Congress every year.

A minute clinic seems convenient, but that is an illusion. In my experience, approximately one-third of patients are misdiagnosed at retail-based clinics, which drives up cost exponentially. Many years ago, a little girl was seen twice at a “retail clinic” without improvement. Presenting initially with abdominal pain, she was diagnosed with a urinary tract infection. She returned the next day with a rash and was examined by a different “provider.” He concluded her rash was caused by an allergy to an antibiotic.

On Monday morning, the mother brought her daughter in to my clinic. She did not have hives. She had petechiae –purplish spots that do not blanch– covering the lower half of her body. She had an uncommon pediatric condition known as Henoch-Schonlein purpura, an auto-immune condition, which causes complications when it goes unrecognized. How many visits to the retail clinic would be necessary to get it right? I do not want to know.

The lawmakers sponsoring this misguided legislation are Rep. Mike Kelly [R-PA-3], Rep. Brian K. Fitzpatrick [R-PA-8], Rep. Blumenauer [D-OR-3], Rep. Erik Paulsen [R-MN-3], Rep. Ron Kind [D-WI-3], and Rep Terri Sewell [D-AL-7]. Why are lawmakers giving “retail clinics” a leg up on the competition? It appears they have been either Target-ed or Amazon-ed.

Representatives Kelly and Fitzpatrick appear to be afflicted with Amazon fever; two cities in their great state of Pennsylvania are currently under consideration as Amazon HeadQuarters 2.   Rep. Paulsen hails from Minnesota. where two of the nations’ leading retailers, Target and Best Buy, have their corporate headquarters. The Target Corporation is the top contributor for his entire legislative career. The Target Corporation also contributes heavily to Rep. Ron Kind from Wisconsin, another co-sponsor, hailing from the Midwest.

HSA expansion will be a bonanza for the banking, finance and credit industries, who hold and service HSA funds. Rep. Terri Sewell from Alabama has close ties to these sectors, which make up some of her best contributors when separated by industry. Rep. Blumenauer, from Oregon, is strongly supported by the Retail Industry Leaders Association (RILA,) a trade group for the world’s largest retailers and distribution centers [translation: Amazon]. In the financial sector, Berkshire Hathaway, a multinational holding company, is a top contributor to the Blumenauer re-election campaign.

Our Government should be Of the people, By the people and For the people – not Of Target, By Amazon, and For Berkshire Hathaway. Being seen by a midlevel provider at a big box retailer cannot save money. Lawmakers sponsoring H.R 5138 are doing the nation a grave disservice by sponsoring this atrocious legislation. The playing field should, at least, be level. Health Savings Accounts (HSAs) must be expanded to allow patients to choose independent physicians, direct primary care practices, retail-based, or employer-based clinics. Americans are quite capable of spending their healthcare dollars wisely.

Niran Al-Agba (@silverdalepeds) is a third-generation primary care physician in solo practice in an underserved area in Washington State who blogs at peds-mommydoc.blogspot.com.


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12 replies »

  1. Primary care just isn’t where the money is in healthcare costs. Instead, it’s in chronic disease management, emergency surgery, trauma care, cancer treatment, etc. People can do everything right in terms of lifestyle choices and still get cancer. They can have the best primary care available and still develop heart disease if they have a genetic predisposition, have trouble controlling their weight and are non-athletic / sedentary. They can develop mental illness or a substance abuse problem despite great primary care. People don’t need doctors to tell them that smoking, alcohol and substance abuse and obesity aren’t good for their health.

    As for the tax preference for employer provided health insurance, I would get rid of it altogether if it were up to me or at least phase it out and use the savings to lower marginal income tax rates for the middle class. The tax preference just encourages employees and their unions, if they are union members, to want more of their compensation in the form of comprehensive health insurance coverage than they otherwise would. This accident of World War II history is not serving us well.

    • Yes. You are correct. Telling patients to spend their money on healthcare at target is no better.

  2. Niran, you said “Health Savings Accounts (HSAs) allow individuals to use pre-tax dollars to pay for high deductibles and other uncovered medical expenses.”
    That is true, but that isn’t the key benefit. The key is the individual owns the $ in the account and thus benefits from making wise and prudent use of health services…hopefully guided by an engaged and caring and wise doctor.

    • I completely agree with you about patients having control of their money. But this law would be in direct opposition to that don’t you think?

  3. Remember, again, that the origins of our nation’s healthcare industry was related to the discovery of anesthesia for surgery and infection control. This then led to the centralization of healthcare away from the home to a more “efficient location” for discovering new surgical advances. It also disenfranchised a person’s home and its family’s traditions for a person’s HEALTH.
    So tax free money for walk-in healthcare with no basis to access a trusting encounter based on true medical TRIAGE and continuity of relationships. Is it still true that there are several Medical Schools who do not sponsor at Family Medicine residency? Several years ago, the number 8 comes to mind.

  4. Agree that the playing field should be level. Bill as described is special interest oriented. That said, there really isn’t especially good evidence that HSAs save money and not much reason to think that they will.


    • Steve 2, I am not convinced HSAs will save money or lower costs either, but they definitely will NOT if Target and Amazon are driving the profit. It is amazing how fast the special interests move.

      • I pointed out the problems with your studies. There is not a good study showing that they save money. Health care demographics suggest they won’t work. Most health care dollars are spent on chronic illness or large simple expenditures (CABG, Chemo). HSAs are basically just very high deductible plans. People will burn through their deductibles quickly with an HSA. It is a good plan for healthy people, mostly the young, but there isn’t much health spending there to be saved.


        And while Mark Pauly has written a lot about HSAs, his two line summary here at THCB was accurate.



        • The largest well designed (and large sample) studies are from Rand. Here is one quote “If consumer-directed health plans (CDHPs) grew to account for half of employer-sponsored insurance in the U.S., health c​osts could drop by $57 billion annually—about 4 percent of health care spending for the nonelderly, according to a Rand Corp. study, published in the May 2012 issue of the journal Health Affairs.”

          Re the argument that most costs are from major illnesses is sort of like saying for the financially struggling person “since most of your debt is your home mortgage it makes no sense to stop going out to dinner twice a week and putting it on your credit card….since the restaurant charges are a small % of your problem.”

          • Link to the HA commentary on that article. Yes, we get a one year effect. No we don’t know if it is sustainable. I would also link to the 2017 Health Affairs piece that showed that the cost savings came with cutting out both inappropriate care AND appropriate care, but not sure two links can make it through filter. . In the long run, these plans may actually cost more in terms of total US health care spending. Also, from memory as I am embarrassed to admit that I let my HA subscription lapse, I think that the RNAD reports (there have been several of these) don’t look specifically at HSAs, just CDHPs in general. We have found that people are a bit put off with the complexity of the HSA and only people committed to the idea opt for them, so I think there is a lot of possibility for selection bias.



    • Steve, just saying HSA plans don’t save $ doesn’t make it so. I have referred you to many studies that show savings…substantial reductions….not just little reductions in the growth rate….and I have asked you to cite any contrary evidence, but you haven’t. Please make your case or cite evidence.

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