SECTION FIVE: Multi-Year, the Future of HSA
We've spent a lot of time on the 1980 version of Health Savings Accounts. It's already rolling along in action, with only a couple of suggested additions to make it better. The new 2015 version is also before you. But lifetime Health Savings Accounts are only a dream, to be worked on for months or years, because they invade so many turfs, and will require extensive legislation to become a reality.
Let's proceed on the assumption Congress will authorize intergenerational transfers between HSA accounts, to the extent it becomes possible to create single payment accounts of the kind we have described. Presumably, most of these will be authorized in wills, but some donors may prefer to be alive when a transfer happens. It may happen at the birth of the child, or in anticipation of it; but accidents happen, so contingent plans should be allowed, with a default of some sort if this point has been neglected. If Congress authorizes these transactions, Congress should retain some control of them.
On the other hand, the child's parents retain fall-back responsibility too, and have a right to be represented in any changes. Congress should authorize a system of transition oversight, which includes state representation, and representation of parents, as well as experts with experience in related fields, like single-deposit annuities. The transition oversight committee (or court) should have a right to suggest technical and substantive amendments to the enabling legislation, have a right to hear appeals, and the right to obtain expert advice, and such other relevant duties as the enabling body may delegate.
Someone must be placed in charge of oversight over the amount of a single payment to start these accounts, adjust necessary supplements, and to adjust for any surplus. There must be an accounting system, and a public report of it. Experts in single-deposit annuities should be consulted, and future projections should be kept current. Since each year of life from birth to 21 years will eventually establish a "normal" budget, records should be maintained for the purpose of increasing or decreasing each year's average revenue assignment out of an overall children's budget. The purpose is estimating whether the overall budget needs adjustment, or whether only individual years do.
The presumption should be, the actual experience will be a near-zero balance at the 21st birthday. The possibility of surplus or deficit must be envisioned, however, and supplementation of the fund is preferred. However, if supplementation is not forthcoming, all payouts should be proportionally reduced to maintain a balanced budget. Supplements should then be sought from the parents of covered children, assuming such deficits cannot be maintained by transfers from funds intended for later ages of the recipients. It is not intended for fund sources for children born earlier or later to supplement deficits of other programs, although enough surplus should be generated to make lifetime funding possible. It should be recognized this is a sensitive point in the cycle, sometimes necessary as a brake, sometimes useful as a reserve. To use surplus to fund food stamps or agricultural subsidies is the beginning of the end.
The general principle should apply that a reimbursement agency should not be responsible for costs which were unknown before the revenue became fixed. In fairness, a new drug, instrument or procedure should not be reimbursed unless the next annual budget anticipated its existence. However, this accommodation should be reasonable, devoting more attention to the date of the annual opportunity to readjust the budget, than to political issues.