Health Savings Accounts No Longer Promote Consumer Cost-Consciousness

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      Two decades ago Congress enabled Americans to open tax-favored health savings accounts (HSAs) in conjunction with qualifying high-deductible health plans (HDHPs). This HSA tax break is regressive: Higher-income Americans are more likely to have HSAs and fund them at higher levels. Proponents, however, have argued that this regressivity is offset by reductions in wasteful health care spending because consumers with HDHPs are more cost-conscious in their use of care. Using published sources and our own analysis of National Health Interview Survey data, we argue that HSAs no longer appreciably achieve this cost-consciousness aim because cost sharing has increased so much in non-HSA-qualified plans. Indeed, people who have HDHPs with HSAs are becoming less likely than others with private insurance to report financial barriers to care. In sum, promised gains in efficiency from HSAs have not borne out, so it is difficult to ju

      Comment by: Don McCanne of PNHP: After two decades, conservatives are still promoting health savings accounts, in spite of their pronounced regressivity. We have long needed policies that assist lower income individuals, yet health savings accounts and their associated high deductible health plans have failed to protect those with more modest incomes. Only a well-designed single payer Medicare for All system would. So why on earth does support for this unsuccessful policy persist when it works to the detriment of the poor but not the wealthy?

      Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction

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