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Study: HSAs harbor pitfalls for some populations

Physician Practice Advisor, February 1, 2005

About half of insured adults with a high-deductible health plan have medical bill problems or debts, compared with less than one-third (31%) of those with lower-deductible plans, according to new research from The Commonwealth Fund. Individuals with high-deductible plans are also more likely than those with lower-deductible plans to experience access problems such as not filling a prescription, or skipping a medical test, treatment, or follow-up when needed, due to cost.

"Health savings accounts [HSAs] coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed healthcare," said Commonwealth Fund President Karen Davis at the annual meeting of the National Academy of Social Insurance (NASI) in Washington, titled Medicare Modernization in a Polarized Environment: Facing the Challenges.

HSAs are tax-deductible savings accounts individuals can use to pay for out-of-pocket healthcare expenses, enacted as part of the Medicare Modernization Act of 2003. To be qualified to establish HSAs individuals must be insured by a health insurance policy with a minimum deductible of $1,000 for individuals and $2,000 for families.

Davis suggests some legislative fixes for HSAs that could help prevent medical access problems and burdensome medical debt:

• Reduce deductible for lower-income families.
• Exempt effective services and medications for patients with chronic conditions.
• Require provider discounts for uninsured low-income families.
• Cap income eligibility for tax-sheltered savings accounts-similar to Individual Retirement Account provisions.
• Prohibit discrimination in favor of high-wage employees in funding HSAs by employers.

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