by Fred Adams
Vice President
HSA for America

Health Savings Accounts for Rhode Islanders

The Rhode Island state house Finance Committee has just approved a bill that will make Health Savings Accounts available to Rhode Islanders.

Rhode Island is currently one of very few states where Health Savings Accounts are not available. In the summer of 2004, the state legislatures passed a mandate requiring that health insurance pay for certain early intervention services without a deductible.  Because these charges do not qualify as "preventive care" under HSA standards, this mandate is in conflict with U.S. Treasury rules on HSA-qualified plans, and all plans in Rhode Island are ineligible to be offered in conjunction with an HSA.

The recent approval by the House Finance Committee of the bill that would exempt high-deductible health plans from this mandate will bring the availability of HSAs one step closer for those in Rhode Island.  The bill, sponsored by State Rep. Eileen S. Naughton and Sen. Marc Cote, has a "sunset" provision that would end this exemption from state mandates in 5 years.  Gov. Donald L. Carcieri favors a permanent exemption of high-deductible insurance plans from state coverage mandates, as long as the plans are designed to qualify for a state or federal tax preference, as HSAs do.

It is unsurprising that Rhode Island, with more than three dozen state-mandated benefits in their health insurance laws, has some of the highest insurance rates in the country.  When states mandate specific benefits, costs rise and health insurance becomes unaffordable for a greater percentage of the population.

By allowing people to buy catastrophic coverage, and save money for more mundane expenses in a tax-free manner, HSAs can dramatically lower health-care costs.  We believe that the citizens of Rhode Island deserve the opportunity to invest in tax-free Health Savings Accounts, and too purchase high-deductible health plans that are not priced sky-high by the state's burdensome benefit mandates.  Hopefully a bill giving Rhode Islanders permanent access to HSAs will soon pass and be signed.

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