Republicans are basing much of their so-called fix of Obamacare on two principles; competition among insurers and patient use of health savings accounts. They are barking up the wrong tree.
Health savings accounts have been oversold in an attempt to mask cost-shifting through increasingly higher deductibles in health benefit plans. The idea that workers can both cope with high deductibles and save money in a HSA for the future is pie in the sky thinking.
As you can see below, most workers save very little and then mostly use that money in the same year. Such plans primarily benefit higher income individuals and those fortune to have no or very little health care spending for several years in a row
Not even close to the max.
Among the propositions of the new health care bill (from House Republicans) is raising the maximum contribution allowed to HSAs, which this year was capped at $3,400 for an individual and $6,750 for a family. The bill proposes to raise that ceiling to be equal to the out-of-pocket maximum for high-deductible plans, which is $6,550 for individuals and $13,100 for families. What we know from current behavior is that just 15 percent contribute the maximum, according to Devenir. More than 30 percent do not contribute any money at all in a given year.
Most HSAs are churn accounts, and saving might actually be going down instead of up. Devenir’s latest report found participants holding over less in 2016, just $5.7 billion, compared with $5.9 billion in 2015 and $6.2 billion in 2014.