June 2, 2017

Dear Vice President Pence:

Obamacare repeal has failed, but I guess we are trying again. I know about your support for HSA plans, believe you have influence with Trump and Congress, and would like to make a suggestion.

Under the current law, contributions to an HSA account can be made only if one has a "High Deductible Health Insurance Plan" (HDHP) and has no other health insurance coverage. A simple change could make the IRS recognize having no health insurance plan as having a HDHP, because it is a health insurance plan where the deductible is infinite; and those people (or their employers) can contribute to their HSA. Medical payment plans that don't have a risk spreading component, but offer price pre-negotiation, should not count as disqualifying health insurance plans. A sentence like that should be in the instructions the IRS provides people, so they go out and try to line up a price pre-negotiation service.

This would still force the payment of a penalty under Obamacare, because a "no health insurance" plan does not meet the requirements of "gold", "silver", or "bronze" coverage. So this change can be marketed as an improvement to HSA rules, not as a change to Obamacare. Since it does not change the law, only the interpretation, it should be doable by an executive order to the IRS.

There is a lot wrong with Obamacare and it should really be repealed. In the meanwhile, under the Obamacare health law, an exemption from the mandate to have insurance can be made for anybody where the cost of healthcare/premiums would exceed approximately 8% of their "available" income. You could work on the definition of "available" income. Any payment mandated by law, regulation, or court order should reduce "available" income, any other payments should not. So an instruction to the IRS defining and changing how to compute "available" income and where the exemption should automatically apply would be helpful.

Also if a person contributes the 8% of their available income to an HSA, they are providing the required minimum towards their future health care, and they should automatically be exempt from the Obamacare penalty. Maybe you can get a Senator or Representative to include this amendment as a rider in a law to be passed this year.

What all of the above would do is change the law from being punitive to providing an incentive. It would not matter what their level of income was, they will save for future health costs, but at a level commensurate with their ability and inclination to pay. What it would really do is get them into the habit of thinking they have to pay something for healthcare. And it would change the conversation to having more people having access to better healthcare, rather than more and/or better insurance.

I think most people have the sense to recognize there are benefits to being rich, even in healthcare. But we all reject being forced to bankrupt ourselves, and risk starvation, exposure, and/or death merely to comply with law - especially when the payments are for something that does not actually work. Survival (and a sense of self worth) comes first. The insurance mandate has to go.

Sincerely