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you are here: Home » voteufcw » 2008 Issues » Health Care » HSAs are Not the Answer

HSAs are Not the Answer

In response to the health care crisis, the Bush Administration is advocating "consumer-paid" or "market-driven" health care initiatives like Health Savings Accounts (HSAs) and tax breaks paired with low-cost plans that provide less coverage.
While the low-cost plans sound good at first, having an HSA, getting a tax break and joining a cheaper plan won’ t give patients the comprehensive coverage they need. In fact, a recent analysis by Massachusetts Institute of Technology economist Jonathan Gruber estimated that Bush’s HSA plan could actually increase the number of Americans without health insurance.

Unlike traditional health insurance plans, HSAs… 

  • Require high out-of-pocket expenses—a minimum of a $2,000 deductible for a family and, in some cases, as high $10,000—before coverage actually kicks in. 
  • Undermine employer-sponsored group insurance and do nothing to solve the huge problem of cost-shifting from such irresponsible employers as Wal-Mart to employers that do fund health care for working families.
  • Discourage preventive care, ultimately increasing the cost of health care in the United States.
  • Increase premiums for workers who remain in more comprehensive coverage plans as younger and healthier workers opt for the high-deductible HSAs. As premiums increase for traditional employer group health plans, employers will be more likely to shift even more costs to workers or drop traditional health coverage all together in favor of high-deductible HSAs.


In addition, HSAs ignore the needs of… 

  • Uninsured Americans who have little disposable income and are unable to spare $1,000 or more for HSAs.  In addition, many of the uninsured don’t even have enough income to receive any benefits from the tax breaks.
  • Racial and ethnic minorities who suffer disproportionately from chronic conditions.  Because low-income racial and ethnic minorities are more likely to have acute or chronic conditions, they are far less likely to benefit from HSAs and far more likely to be harmed by high deductibles.

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