HSAs Are Catching On

Health savings accounts are growing in popularity, according to this article. Six million people are now enrolled in plans that allow them to use HSAs. Critics are still claiming that the plans are just for the wealthy, but that doesn’t match the data:

Karen Ignagni, president and CEO of the trade group America’s Health Insurance Plans, said the GAO’s numbers showed that the typical enrollee deposited $2,100 in a health savings account in 2005 and withdrew $1,000. She said those figures hardly represent amounts that could be described as a tax shelter for the wealthy.

The average HSA owner still has a higher income than the average American, but that’s because most ordinary people haven’t had access to the accounts. Missouri reformed its health care regulations last year, allowing more small business owners and employees to take advantage of the plans. Unfortunately, most states lag behind. Wealthy people are also more likely to have the latest information about which health plans are to their advantage. HSAs are a relatively new addition to the health-care market, and their use will probably spread as people learn about them.

Another criticism of HSAs is that when people have to pay for care themselves (using money saved in an HSA) they receive less health care than they would if they didn’t see the cost. That’s true — and it’s a benefit of HSAs. When everyone uses all the health care services available, without regard for cost, it leads to shortages. Then the people who most need those services may not receive them. HSAs don’t prevent anyone from purchasing health care they need or want — they just give them an incentive to take the cost of care into account.