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Debate: Should HSA-Compatible Plans Cover Telehealth Before the Deductible?

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Since the COVID-19 pandemic, taxpayers have relied more heavily on remote health care services. Remote services were first offered as a necessity, as hospitals and medical facilities attempted to minimize the number of patients exposed to COVID-19 within these physical settings. Although the absolute need for telehealth services has decreased, because telehealth services offer such flexible options, the popularity of such services remains.

However, absent legislative action, the restrictions that were imposed by pre-existing regulations will resume — meaning that high-deductible health plans that are compatible with health savings accounts will no longer be authorized to cover the cost of remote preventative services before the participant’s deductible has been satisfied.

We asked professors Robert Bloink and William Byrnes, authors of ALM’s Tax Facts with opposing political viewpoints, to share their opinions about whether the favorable coverage rules that have applied to remote health care services should be made permanent.

Below is a summary of the debate that ensued between the two professors.

Their Votes:

thumbs up Bloink
Thumbs down Byrnes

Their Reasons:

Bloink: Pre-deductible remote telehealth benefits should be made permanent. It’s 2022 and modern services like this should be the norm. A significant number of Americans have the technology necessary to access remote health care options without the need to travel to the doctor’s office — and that includes Medicare-eligible individuals.

Byrnes: The extension of pre-deductible telehealth benefits should definitely be temporary. HDHPs have restrictions for a reason. Those restrictions with respect to deductibles are what render participants eligible to make HSA contributions. Allowing unlimited pre-deductible remote health care services negates the rationale behind allowing triple-tax-preferred HSAs in the first place.

Bloink: In cases involving minor issues, pre-deductible telehealth care should always be permitted — if for no other reason than it significantly decreases the cost and inconvenience of obtaining health care in America. This is how industries evolve and grow in the face of rising costs and an extraordinarily tight labor market. It’s just another way to add efficiency and improve productivity, all while improving the health care experience for the average American.

Byrnes: We have vaccines that keep people safe from severe illness and reduce the risk of in-person treatment, which is the most effective type of medical care. We have to acknowledge that there’s only so much that a physician can do in a remote setting. There’s no reason to make every rule implemented during the pandemic permanent. Many of these rules complicate an already complex set of preferential tax rules and we should be focused on making the code simple enough for ordinary Americans to actually understand it.

Bloink: The fact is, we have to change with the times. The pandemic taught us many important lessons that we shouldn’t forget just because the country — and the world — is returning to “normal.” Many Americans don’t seek necessary medical care because of the hoops they’re forced to jump through — not to mention the expense. Telehealth is a cost-effective way to offer basic care for Americans. Because of the reduced cost, I don’t see any reason why it shouldn’t be offered on a pre-deductible basis for HDHP participants.

Byrnes: Taxpayers with HDHPs are given the significant tax benefits of contributing to an HSA because of the restrictions imposed on HDHPs themselves. Yes, we expanded the rules to allow HDHPs to cover telehealth services on a first-dollar basis during the pandemic. That was in reflection of the fact that it was the only way some taxpayers could access their health benefits during an unprecedented pandemic — but it doesn’t mean that we should focus on encouraging telehealth services as a long-term solution to the problems surrounding health care in America.

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