Washington Post Examines Reaction To Health Savings Accounts

Main Category: Health Insurance / Medical Insurance
Article Date: 15 Mar 2006 - 11:00 PDT

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The Washington Post on Sunday examined the debate over health savings accounts, which according to President Bush and other proponents "can tame medical costs, turn patients into smarter medical consumers and make insurance affordable for more people." Bush has proposed that $156 billion in tax incentives be used to encourage the use of HSAs, but several studies on the accounts "do not match the White House's certainty" that they are beneficial, the Post reports. Bush repeatedly has stated that one-third of people with HSAs were uninsured beforehand, but two insurance industry surveys suggest that fewer were previously uninsured. In addition, Bush has said that two-fifths of families with HSAs have incomes lower than $50,000 annually, but "research and some companies' experience suggests the plans are most attractive to people who have relatively large salaries," the Post reports. People with smaller salaries who enroll in HSAs tend to be employed at relatively small companies that do not offer a choice of plans, the Post reports. Wendy's International in 2005 moved 9,000 managers and administrators into HSAs from traditional insurance, but most large employers that offer HSAs also have other insurance options that are usually more popular, the Post reports. Rose Umile, senior manager of employee benefits at defense contractor Raytheon, said about 1,000 of its 67,000 workers chose HSAs, and those who did so were generally "higher-paid employees." Critics contend that HSAs "mainly provide a tax break for people with good incomes and health and create a dangerous ripple effect in which traditional insurance eventually would cost more for everyone else," the Post reports. Trent Duffy, a spokesperson for Bush, said, "If the market determines this is not a desired product, then so be it. Don't let the politicians determine. Let the people decide" (Goldstein, Washington Post, 3/12).

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