New Report Claims HSAs Are Being Overused by Wealthy, Underused by Poor

With a national election approaching, political rhetoric about different views of current health programs is heating up. Two Democratic members of Congress from California released a report in May claiming that Health Savings Accounts (HSAs) are used more often as a tax shelter for the wealthy than as a path to health benefits for working- and middle-class families. Their report was based on a Government Accountability Office (GAO) study that indicated that HSAs may not be benefiting the intended population.

The GAO study indicated that the average adjusted gross income for an individual with an HSA was $139,000 in 2007. Total contributions to these accounts in 2005 equaled twice that of withdrawals-$754 million compared to $366 million, respectively. Between the initial introduction of HSAs in 2004 and 2007, participation grew from 438,000 to 4.5 million accounts, according to the GAO study.

This GAO report came after the release, in April, of a Kaiser Family Foundation study determined that most uninsured households don’t have the assets to cover costs associated with consumer-driven health plans (CDHPs), including HSAs. Meanwhile, America’s Health Insurance Plans (AHIP) announced that more than 6.1 million Americans are covered by HSA-eligible insurance plans. Based on the GAO’s finding that 4.5 million Americans currently participate in HSAs, that means that some 1.6 million Americans are not taking advantage of their HSA plan. HSA plans were available to 35% more individuals than the previous year according to AHIP.

As this election cycle heats up, there is likely to more rhetoric about the advantages and disadvantages of consumer-directed health plans (CDHPs), high-deductable health plans (HDHPs), and health savings accounts (HSAs) for specific socio-economic groups. Laboratories and pathology groups have a stake in the healthcare debates that take place during this election cycle. After all, the political spectrum of ideas ranges from the ideal of a single payer system with mandated universal coverage to the ideal of a health system built around consumer choice, open networks, and a variety of health benefits plans and options to fit the needs and pocketbooks of different consumers.

Related Articles:
HEALTH SAVINGS ACCOUNTS: Participation Grew, and Many HSA-Eligible Plan Enrollees Did Not Open HSAs while Individuals Who Did Had Higher Incomes(GAO Report)

Modest Number Of Uninsured Families Have Sufficient Assets To Cover Cost Sharing In HSA-Qualified Plans (News Release about Kaiser Family Foundation Study)

Health savings accounts mostly used as tax shelter for rich: GAO (Modern Healthcare subscription required)