Health Savings Accounts and High-Deductible Health Insurance Plans

Implications for Those with High Medical Costs, Low Incomes, and the Uninsured

Health savings accounts (HSA) and the high-deductible health plans associated with them continue to garner interest for their purported potential to rein in health care spending. As the Obama administration and Congress discuss minimum benefit standards and insurance options during coming years, the role of HSAs is certain to be of continuing interest.

The authors note that:

  • HSA/HDHPs are a highly tax-advantaged savings vehicle appealing to people who have high incomes and to those who are expected to have low use of health care services. For the uninsured, these approaches are less attractive since they often have low income and neither benefit significantly from the tax advantages now have the financial assets necessary to cover the large deductibles associated with the plans.
  • Their ability to reduce system-wide spending is very limited.
  • The plans have the potential to increase segmentation of health care risk in private insurance markets unless employers set premiums to offset the healthier selection into the plans or government subsidizes the higher costs associated with the remaining non-HSA market.

The plans have thus far been less attractive that prononents envisioned, the authors add, so their potentially negative ramifications on populations with high medical needs have been limited. However, they say, "efforts to expand enrollment in these plans through further tax incentives, for example, could place growing financial burdens on those least able to absorb them, leading to more barriers to medical care for the low-income and the sick and fewer insurance options."