Health savings accounts alongside qualifying high-deductible health plans may have outlived their usefulness, according to an analysis published this month in Health Affairs.
Ever since Congress began allowing tax-favored HSAs in conjunction with HDHPs in 2003, the move has failed to promote cost-consciousness among consumers and efficiencies in the healthcare marketplace. Because of this, it's "difficult to justify maintaining this regressive tax break," the authors write.
The article was supported by a grant from the Commonwealth Fund. The authors are Sherry Glied, PhD, dean of New York University's Robert F. Wagner Graduate School of Public Service; Dahlia Remler, PhD, a public affairs professor at City University of New York's Baruch College; and Mikaela Springsteen, a research scientist at NYU's Wagner.
"HSA's are a tax advantage for better-off people, masquerading as a health care efficiency increase that was never likely and is not occurring now. There is no remaining justification for a regressive tax break that failed to achieve its policy goal [of a more cost-efficient health system] and is used disproportionately by higher income people," the authors said.
Those in favor of HSAs had argued that in the era of healthcare consumerism, people would become more conscious about healthcare costs and would be more incentivized to enroll in HDHPs. Proponents had also argued that over time, the marketplace would evolve to incorporate HSAs and begin providing better care for lower costs.
Despite the growth of HDHPs in recent years, the opposite has occurred, according to the authors. Deductibles and high costs have only gone up for non-HDHP plans that don't have an HSA, and those that do have them only benefit from lower cost-sharing.