Wall Street Journal Examines Challenges Related to Health Savings Accounts for Consumers, Providers
The Wall Street Journal on Tuesday examined some of the challenges facing consumers, insurers and banks as the health care industry works out the details of health savings accounts. One "potential are[a] of confusion" is "when and how much" patients with HSAs should pay providers, the Journal reports.
According to the Journal, some providers and consumers "are confusing HSAs with direct, full-price payments" made by the uninsured. In fact, consumers with HSAs are expected to pay for care provided until they meet their health care plan's deductible, but they also should be able to take advantage of discounts that the insurer has negotiated with the provider. Payments with HSAs should work the same way as payments with traditional insurance plans, with providers informing insurers of the charges, the insurer sending the patient a statement detailing the amount the patient owes and the patient then paying the provider.
According to the Journal, to "minimize this hassle," some insurers, including UnitedHealthcare, are allowing consumers to authorize the insurer to deduct directly from their HSAs to pay medical bills. Another concern of consumers is how to pay for medical care when charges exceed the amount they have in their HSAs. According to the Journal, consumers should pay for the services with after-tax dollars and subsequently withdraw money from their HSA when there is enough to cover the cost, generally by writing themselves a check from their HSA.
The Journal also warns that consumers must be "careful to avoid tax errors" with their HSA by unintentionally charging nonmedical purchases to their HSA debit card. Unapproved purchases must be recorded on income tax returns and incur a 10% penalty if the consumer is younger than 65.
The Journal recommends consulting the Internal Revenue Service's Publication 502 and the Treasury Department's guidelines to review approved purchases (Rubenstein, Wall Street Journal, 11/30).