Committee Refutes Negative Response to GAO Study on HSAs

May 8, 2008 ( - In a policy brief countering negative comments made by Democrats in response to Government Accountability Office (GAO) findings on health savings accounts (HSAs), the Republican Study Committee (RSC) concluded that conservatives will be pleased with many of the findings.

The GAO’s analysis of government and industry data on health savings account (HSA)-eligible high-deductible health plans suggested that while the number of individuals electing to participate in these plans is growing year after year, many participants do not actually open an HSA (see Many HSA-Eligible but not Using Them ). The RSC suggested the GAO report was confusing the covered lives under HSA-eligible plans with those able to open an HSA account.

According to the RSC policy brief, the two numbers will never be equal, or even nearly equal, as dependent children covered under HSA-eligible plans cannot open their own accounts, and some spouses may choose a joint account rather than separate ones.

The GAO report also indicated that tax filers who claimed to be HSA account holders reported higher incomes than filers who did not, which the Democrats said showed that HSAs are being used primarily by the wealthy. In its response, the RSC noted the GAO used data from 2005 when there were much fewer HSA account holders, and said the small sample size available in 2005 may have incorporated a disproportionate number of holders of Medical Savings Accounts (MSAs), who converted their accounts into HSAs upon their creation in early 2004, and MSAs were only available to self-employed individuals and small business owners who would have higher incomes than the general population.

The RSC cited a report of HSA sales by an online broker of health insurance policies nationwide that indicated 45% of purchasers of HSA-eligible plans had annual incomes less than $50,000.

The policy brief noted that both the GAO report and a recent report by America’s Health Insurance Plans (AHIP) show HSAs have experienced significant growth since their introduction in 2004 (see HSAs Continue to Make Inroads ). The RSC concluded that the data show consumers are creating savings to pay for catastrophic health-care expenses and becoming wiser shoppers when purchasing medical goods and services, which will help to slow the growth of health-care spending.

The policy brief is here .