Health Savings Accounts (HSAs)

Health Savings Accounts: A Tax-Advantaged Solution

Health Savings Accounts are tax-advantaged savings accounts for people who have a High Deductible Health Coverage (HDHP). The initiative was launched with the goal of lowering escalating health-care expenditures and improving health-care system efficiency (Huynh, Health Savings Accounts) (HSAs). The goal was to encourage people to save for future health care bills while also allowing them to get essential health care without a gatekeeper determining the benefits offered. At the time of deposit, the funds in the account are not subject to federal income tax. If the money is not spent, it accumulates year after year. These accounts are owned by individuals who make the contributions, unlike the company-owned health arrangements. The stakeholders in health care sector include the patient, payer, provider, and the government, each with different goals. HSA can be aligned to meet the expectations of these stakeholders if well monitored. Patients, who are direct or indirect payers will benefit with better medical care when they need it, providers will sell the policy to people if they appear to be beneficial, and the government will achieve the goal of having healthy citizens.

Potential Benefits of HSAs in Healthcare

HSAs are potential means of improving health care costs, quality, and access for a majority of the working population (Claxton, Rae, Panchal, Damico, Whitmore, Bostick, and Kenward, 2013). The benefits of the program supersede the drawbacks. Saving ensures that there are funds to cater for medical expenses when the need arises. The tax deduction acts as an incentive and the money can be transferred to an heir or used for other purposes other than health as long as one pays income taxes. With the funds in the savings accounts, one can seek and access quality health care. This, therefore, means that if the working citizens enroll in the program and the stakeholders play their part in the health sector, HSAs can be an effective solution to challenges in health care access.

References

Claxton, G., Rae, Damico, A., M., Panchal, N., Whitmore, H., Bostick, N., & Kenward, K. (2013). Health benefits in 2013: moderate premium increases in employer-sponsored plans. Health Affairs, 32(9), 1667-1676.

Huynh, P. T. Health Savings Accounts (HSAs).