July 17, 2019 — In response to a June Executive Order, the U.S. Department of the Treasury released Notice 2019-45, a guidance allowing HSA-HDHP plans the flexibility to cover specified medications and services used to treat chronic diseases prior to meeting the plan deductible. The long-awaited announcement is the result of over a decade of advocacy by the University of Michigan V-BID Center and its many collaborators.

The guidance states that the Treasury Department and the IRS:

·     Are aware that the cost barriers for care have resulted in some individuals who are diagnosed with certain chronic conditions failing to seek or utilize effective and necessary care that would prevent exacerbation of the chronic condition. Failure to address these chronic conditions has been demonstrated to lead to consequences,
such as amputation, blindness, heart attacks, and strokes that require considerably more extensive medical intervention.

·     In consultation with HHS, have determined that certain medical care services received and items purchased, including prescription drugs, for certain chronic conditions should be classified as preventive care for someone with that chronic condition.

·     Noted that each medical service or item, when prescribed for an individual with the related chronic condition, evidences the following characteristics:

·     The service or item is low-cost;

·     There is medical evidence supporting high cost efficiency (a large expected impact) of preventing exacerbation of the chronic condition or the development of a secondary condition; and

·     There is a strong likelihood, documented by clinical evidence, that with respect to the class of individuals prescribed the item or service, the specific service or use of the item will prevent the exacerbation of the chronic condition or the development of a secondary condition that requires significantly higher cost treatments

“As more and more Americans are facing high deductibles, they are struggling to pay for their essential medical care,” said V-BID Center Director, Dr. Mark Fendrick. “Our research has shown that this policy has the potential to lower out-of-pocket costs, reduce federal health care spending, and ultimately improve the health of millions diagnosed with chronic medical conditions.”

Dr. Fendrick is available for additional comments or questions.