New York Times Examines Effects of Health Savings Accounts for Small Businesses
The New York Times on Tuesday weighed the benefits of health savings accounts, which allow people with high-deductible health care policies to set aside pretax income to pay future medical expenses, and looked at how they are "starting to shake up the group insurance market for small businesses" (Brock, New York Times, 9/21). Under the new Medicare law, HSAs are available to members of health plans that have a deductible higher than $1,000 for individuals and $2,000 for families. Employees, employers or both can contribute as much as a combined $2,600 for individuals and $5,150 for families for HSAs each year (California Healthline, 9/7).
Following on an earlier pilot program, insurers have been offering HSA-eligible policies to individuals since Jan. 1 but now are beginning to extend such policies to the group business market. HSA supporters say the accounts allow consumers to buy lower-cost, high-deductible plans, which more companies can afford to finance. However, some critics of the plans say they save money only because they shift costs to consumers.
The value of high-deductible plans and HSAs also is being debated between the presidential candidates. President Bush's campaign Web site lists the accounts as "one of his major health care achievements" because they provide a "free-market alternative to government-paid insurance," the Times reports.
Meanwhile, Democrats have said the plans are "more beneficial to higher-income people," do not offer coverage to people with pre-existing conditions and could lead people to "neglect routine care if they have to spend their own money on it," the Times reports. Democratic presidential nominee Sen. John Kerry (Mass.) has proposed subsidies and other measures to make it easier for small businesses to afford traditional insurance for their workers (New York Times, 9/21).