According to a report by The Commonwealth Fund, The Effect of Health Savings Accounts on Health Insurance Coverage , fewer than 100,000 uninsured individuals – out of the nationwide total of 45 million – will garner coverage from the new health accounts. Also striking is the fact that over 50% of uninsured people do not pay taxes, so the tax breaks associated with HSAs will not provide incentives to join.
According to the report, t he uninsured in middle-income tax brackets would only save between 3% and 6% of the $2,000 annual premium for the high-deductible policy that accompanies an HSA. The report didn’t stop there in painting its gloomy picture. According to the study, HSAs could also destabilize the group health insurance market if smaller employers chose to offer them because high-wage workers will want them.
The report also noted that because of the structure of such plans, they will appeal to both the very healthy – who can accumulate savings in the accounts – and the very unhealthy. “[B]ecause so many purchasers in the nongroup market already purchase high-deductible plans, the HSA provisions are likely, on balance, to encourage unhealthy people to buy higher-deductible plans, thereby driving up the premiums of high-deductible plans in the nongroup market,” the report asserted.
The report also made multiple recommendations for making HSAs more appealing to uninsured Americans, including allowing employers to lower deductibles for low-wage workers, exempting primary and preventive care from the deductible, ensuring workers covered by employer plans have a choice of a comprehensive plan, allowing greater flexibility in benefit design, as well as establishing an income ceiling on HSAs to reduce subsidies for those with higher incomes.
Another report released by the group –How High is Too High? Implications of High-Deductible Health Plans– stated that high deductible health plans (HDHP) can undermine the basic purposes of health insurance, which the group believes is to reduce financial barriers to needed care and protect against financial hardship.
Premiums for high-deductible health plans range from 6% to 20% of income for those with annual incomes up to double that of the federal poverty level, the report states. However, low-income workers with an HDHP could end up spending as much as 30% of their income out-of-pocket on health care.