The Dangers of HSAs

In his speech in Detroit, President Bush said, “I’m a big believer in tax-free health savings accounts. If you’re a small business owner, or a sole proprietor, I urge you to look at health savings accounts.”

FACT: A survey of data from 4,000 adults with health insurance found that about half of patients with a high-deductible plan, coupled with Health Care Savings Accounts, “racked up medical debt and were faced with other billing woes, compared with 31 percent of those with more traditional health plans,” according to the research group Commonwealth Fund, which studies health policy issues.

FACT: And because of their adverse effects on employer-based coverage, HSAs could swell the ranks of the uninsured.

FACT: “Widespread adoption of [HSAs] could drive up the average annual deductible paid by workers, which is now about $300 for single employees and $600 for families, according to data from Mercer and the Kaiser Family Foundation.”

FACT: The creation of HSAs provides an “incentive to shift more costs to workers, who may be asked to ‘match’ their employer’s contribution to a HSA with its high deductibles and high co-payments.” Workers “in the higher tax brackets would secure large deductions for deposits into HSAs.” As a result, they will “weaken traditional employer-based insurance” and “place older and sicker workers at risk.” Experts believe premiums for comprehensive employer-based health insurance could “more than double.”