GAO: HSA Plan Premiums Significantly Below Traditional Offerings
For example, the report states, a 2005 national HSA
survey found that HSA-eligible plan premiums were, on
average, 35% less than traditional plan premiums for single
coverage and 29% less for family coverage. Further, average
HSA-eligible plan deductibles were six times greater than
those for employers’ traditional plans.
The agency wanted to weigh the arguments of the
proponents of HSA plans, who believe giving people more say
in their medical care will drive down costs, and critics,
who argue that high premiums associated with HSAs will
deter people from the plans and that the plans only attract
a disproportionate share of wealthier enrollees.
However, the agency found that the HSA-eligible plans it
reviewed covered the same broad categories of health care
services as did traditional plans in 2005, including
preventative, diagnostic, maternity, surgical and emergency
services.
The report found that HSA-eligible plan enrollees generally
had higher incomes than comparison groups. In 2004, more
than half (51%) of those reporting HSA contributions had
adjusted incomes of about $75,000, or more.
Just over half of all HSA-eligible plan enrollees and about
two-thirds of employers contributed to HSAs, and account
holders used their HSA funds to pay for current medical
care and to accumulate savings.
According to the GAO, about 45% of those who made 2004 HSA
contributions also reported that they withdrew funds in the
same year – 90% of these funds having been withdrawn for
qualified medical expenses. Just over half of those
contributing to HSA accounts withdrew nothing for medical
expenses in 2004.
Tax filers claimed an average deduction of about $2,100 for
their HSA contributions in 2004 and the average amount
increased with income. About two-thirds of employers
offering HSA-eligible plans contributed to their employees’
HSAs, and the average employer HSA contribution was about
$1,064 in 2004.
The GAO heard from the HSA plan enrollees who participated
in its focus groups, most had positive experiences, but
would not recommend the plan for everyone. In fact, the
report stated that “Participants said they would recommend
HSA-eligible plans to healthy consumers, but not to people
who use maintenance medication, have a chronic condition,
have children, or may not have the funds to meet the high
deductible.”
As far as behavior related to signing onto an HSA plan, few
of the participants said they actually researched plan
costs, but did look into the cost of prescription drugs.
For the full report go
here.
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