Health savings accounts are not likely to stem rising health care spending

New York, NY--Health savings accounts (HSAs) coupled with high-deductible health plans sometimes lower consumer cost-sharing compared with many typical health insurance plans, according to a study supported by the Commonwealth Fund in the July/August issue of Health Affairs.

Many of the HSA/high-deductible health plans in the market today actually reduce cost-sharing for people who spend the least and the most on health care, while increasing cost- sharing for those who fall in the midrange, according to the study, "How Much More Cost Sharing Will Health Savings Accounts Bring?" by Dahlia Remler and Sherry Glied. Decreased cost-sharing is due to several factors including tax subsidies for out-of-pocket expenses and the fact that people with high deductible plans can reach the plans'out-of-pocket maximum far more quickly than those in more comprehensive plans, potentially reducing the total amount of medical spending that is subject to cost-sharing.

HSAs--a form of medical savings account which must be accompanied by a high-deductible health plan (at least $1,050 for an individual and $2,100 for a family)--permit people to save money tax-free and use those funds, also tax-free, to pay their out-of-pocket health care expenses. Proponents of HSA/high-deductible health plan arrangements say that increased out-of-pocket costs will encourage consumers to be more cost-conscious, leading to lower costs and greater efficiency in the health care system.

In their analysis of HSAs, authors Remler, a professor at the Baruch College School of Public Affairs, City University of New York, and Glied, chair of the Department of Health Policy and Management at Columbia University, compared HSAs combined with high deductible plans with traditional health insurance policies. They found that the 7.7 percent of people who are responsible for half of all medical spending would see no change or a decrease in their level of cost-sharing under an HSA/high-ded

Contact: Mary Mahon
Commonwealth Fund

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