Health Savings Accounts Might Reduce Health Care Spending, Not Number of Uninsured, Report Finds
Health savings accounts might produce a moderate reduction in national health spending but "are not likely to make a big difference in the number of uninsured" U.S. residents, according to a recent report by the Congressional Research Service, CQ HealthBeat reports. The report found that there is a "burgeoning market" for HSAs and that many large insurers have entered the market and offer such plans nationwide.
However, the report finds that "it would be unreasonable for [HSAs] to produce a significant reduction in the nation's health care costs." The report states, "It is a well-established paradigm that 5% of individuals account for approximately 50% of health care costs and 20% account for approximately 50% of costs. HSA plans, with their relatively low out-of-pocket maximums, will have little impact in reducing the health care spending for these groups."
The report continues, "Some might question whether it is fair that the largest tax savings per person will likely flow to healthy, higher-income taxpayers. Some might also question whether the revenue loss is an appropriate use of federal health care resources, given the many people in the country who have no health insurance whatsoever." The report states, "Many uninsured are in the 10% or 15% tax brackets and would not find the tax advantages of HSA contributions to be a compelling reason to buy the insurance" (CQ HealthBeat, 4/15).