HSAs might raise the number of the uninsured
In the past, analysts calculated that HSAs might cover an additional three million people without health insurance. I've balked at this number many times because that's only 6% of the uninsured and by no means a fix for our most urgent health policy problem. But new research estimates that the additional coverage provided by HSAs will coincide with 4.4 million people losing insurance as employers drop plans:
A new analysis by one of the nation's leading health economists finds that the Administration's proposals to expand tax breaks for Health Savings Accounts (HSAs) would cause a net increase in the number of uninsured Americans.
The analysis, conducted by Jonathan Gruber of M.I.T., projects that while 3.8 million previously uninsured people would gain health coverage through HSAs as a result of the President's proposals, 4.4 million people would become uninsured because their employers would respond to the new tax breaks by dropping coverage and they would not secure coverage on their own. The net effect would be to increase the number of uninsured Americans by 600,000.
And the HSA tax breaks are expensive -- an estimated $156 billion over the next ten years. Which means that the administration expects you and me to fund this loss of insurance. There's a lot of things my taxes go to under Bush that I dislike, but the idea that I will be paying to rip away health insurance from 600,000 people is absolutely enraging.
Thanks for the post. I believe HSAs will only deepen our problems in the area of healthcare.
The Democrats need to stand as firm on this, as they did on Social Security. We no longer can work around the fringes with our healthcare crisis. We can no longer afford to look at band-aid solutions. We need a full scale overhaul of the entire system, top to bottom, or we will only see fewer and fewer people with healthcare coverage.
Beware of the fanatics, they never see gray.
February 15, 2006 12:49 PM | Reply | Permalink
This is a great point and it really speaks to what I think is the biggest problems with HSAs:
If you work for a company that decides, "Okay, I'll buy a lower premium, higher deductible plan and will then given my employees an HSA account funded to match the deductible," then these accounts can really help. Especially since you can rollover unused HSA money to augment an account for the following year. Younger people can be thrifty, building accounts that will be larger as they age and need more healthcare.
If the government funded HSA's to some sort of average deductible level, they'd work too.
But, if it's just up to individuals to fund the accounts on their own, in exchange for a tax break, they won't do it. They probably, for the most part, can't afford to, especially since this account is different than a 401(k) since, to be effective, you really need to contribute a lump sum to the account on at least an annual basis in order to cover deductibles.
The way these HSA's are being used leaves most American's going... okay, cool, I get a tax break for putting money that I can't afford to give up into an account that has restrictions on how I can use the money. Gee, thanks.
thosethingswesay.blogspot.com
February 15, 2006 5:01 PM | Reply | Permalink
I have to say the the HSA idea made sense to me as a cost containment originally, but once you realize that
Result: higher overall costs, sicker people.
February 16, 2006 8:03 AM | Reply | Permalink
What do you mean, might?
February 16, 2006 1:55 PM | Reply | Permalink
If any TPM readers out there have an HSA and are not happy with it (say, you entered an HSA/high-deductible health plan because that's all your employer offers but you find it doesn't suit your situation), please visit the website of Families USA, a health care consumers group, and tell us your story! Here's the place to go: http://www.familiesusa.org/tell-us-your-story.html
February 20, 2006 12:50 PM | Reply | Permalink