Fix Health Care Policy

HSAs Could Bring Health Costs Down; Too Bad Obamacare Destroys Them

Consumer-directed health plans have become increasing popular because of their ability to save consumers money. Breaking research published by Health Affairs shows that if consumer-directed health plans increased as a share of employer-sponsored plans from 12.4 percent to 50 percent, it could save $57.1 billion annually in national health expenditures. The report states, “Savings of this magnitude would account for 7 percent of all health care spending for the population with employer-sponsored insurance and 4 percent for the nonelderly population as a whole.”

The study uses two types of consumer-directed plans to comprise the increased market share: half health reimbursement arrangements (HRAs) and half health savings accounts (HSAs). The study shows that if the ever-popular HSAs were to take up the entire 50 percent of market share, savings could reach $73.6 billion, or 9.1 percent of employee health care spending. This is because employees save more money in the high-deductible HSAs than in HRAs. HSAs are funded by both the employer and employee, while HRAs are funded solely by the employer. Thus, any money not spent in a HSA rolls over for the employee to keep, while in an HRA, it is just money the employer did not have to spend.

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Tags: consumer-directed health plans, HSAs, lower costs, Obamacare destroys