The House Ways and Means Committee meets today to discuss the impact of health savings accounts (HSAs) on consumers, businesses and health care providers. HSAs have been promoted as a way to inject greater consumer choice and financial accountability into the health care market, but in reality, HSAs give people higher health care bills and less coverage.
Health savings accounts allow employers to provide workers with high deductible insurance coverage paired with a special savings account for medical expenses — although in the real world, 37 percent of employers do not contribute to the savings account at all, and others do not contribute the full amount of the deductible. This means that the individual bears the burden of the high deductible, and this high cost-sharing results in reduced access to needed care. In short, people will pay more for less care.
Health savings accounts shift who pays for care. Health care costs become an individual liability rather than a shared responsibility like they are under traditional insurance. Therefore, the people who need health care, particularly those with serious or chronic illnesses, will pay the most under the HSA system.
Health savings accounts cannot solve the problem of health care costs. These plans do nothing to address the costs associated with high-cost patients who account for most health care spending, and they do not cover the preventive services that lead to lower long-range costs. Furthermore, consumers do not have the market clout of large insurers. Individuals on their own are unlikely to achieve lower prices, so costs will remain high and industry profits will remain intact.
The Bush administration has advocated further expansion of HSAs, but recent analysis shows that these proposals would actually increase the number of Americans without health insurance. HSAs fail to address the twin problems of cost and coverage in America’s health care system, while shifting the burden of health care costs to the individuals and families who need care.
To read more about the Center’s position on the health care crisis in America, read: