Healthcare Insurance Options Are Never "Ill-Advised"

Health Savings Accounts (HSAs) have been given a bad rap in the press lately. Unfortunately, there is an overabundance of speculation in regards to who they benefit and who they hurt. Let’s get real - healthcare costs money. It is not free, nor will it be. The best option we currently have is to become a better educated healthcare consumer.

In a recent article published in the LA Times (Health Savings Accounts are ill-advised—February 4, 2009— http://www.latimes.com/news/columnists/la-fi-lazarus4-2009feb04,0,4101321.column ) HSAs were deemed “ill-advised”, based on the premise that they are only for the “healthy and wealthy”. I’d like to elaborate on the benefits of small businesses providing a High Deductible Health Plan (HDHPs) with an HSA, as an option – they connect a broader range of individuals to affordable health insurance options.

HSAs/HDHPs provide tax savings to the employers and employees, an insurance safety net to save people from financial ruin in the case of a major medical event, accesses to discounts for medical services and care that are paid for by consumers, and ultimately allow the healthcare consumer to choose how to spend their pre-tax healthcare dollars. These types of plans are growing in popularity and are found in every segment of the marketplace. However, the small employer segment is the fastest growing with a five percent increase from January 2007 to January 2008 (AHIP, April 2008). Small employers are now able to offer an affordable option to their employees’, which in turn provides a greater span of coverage access. The ultimate goal is to have affordable, accessible, quality healthcare for everyone, right? In the recent February 2009 edition of AHIP’s HSA & Account-Based Health Plans: An Overview of Research, it was stated that in 2007 twenty-seven percent of individuals purchasing HSA-eligible plans were previously uninsured. This is a positive reflection of the accessibility HSA’s provide to individuals and families as a viable option for health insurance coverage. HSA’s provide a savings account for the previously uninsured, or underinsured, to continue to get ahead by building their health “nest egg” for future health-related expenditures.

The recent LA Times stated that HSA’s are a way for small business employers to avoid runaway healthcare costs, but quotes one expert who says: "Most people can't even afford to put money into the account." That is simply untrue. HSA balances are growing every year and some recent studies suggest that the average HSA account holder has an average income of just over $54,000 per year. Sounds like Middle America to me.

No one health plan offering is perfect for everyone, just like no one automobile or home is perfect. The LA Times writers’ weak solution to “extend (a failing) Medicare to everyone” rather than let some people have HSAs and other progressive health plan options, sounds like bad medicine to me and “ill-advised”.