Fast Growth Gives Health Savings Accounts A Sound Prognosis, But Are They Just A Band-Aid?
John Goodman, president of the National Center for Policy Analysis, told CNBC’s “Morning Call” that Health Savings Accounts are growing faster than IRAs at the “same point of their evolution.”
“These accounts empower the patient,” Goodman said Monday. “They allow patients to manage some of their own healthcare dollars. If the patient doesn’t manage the money, it will be the employer, an insurance company or government. Patient power is important and leads to higher quality.”
President Bush created Health Savings Accounts in 2003 when he signed the Medicare Bill. HSAs are intended to help individuals save tax-free for future qualified medical expenses and retiree healthcare expenses. Bush is discussing the future of HSAs today in Washington.
“These are the fastest growing financial accounts ever,” Goodman said. “They’re growing faster than IRA accounts grew at the same point in their evolution.”
But Karen Davenport, director of health policy for the Center for American Progress, said Health Savings Accounts are fine for the “healthier and wealthier” but do little for the uninsured for the chronically ill.
“For people with really high healthcare costs, HSAs don’t make much difference in their healthcare spending,” Davenport said. “If you end up in a hospital…a single day’s admission blows through your high deductible. It’s not whether you’re cost-conscious or not -- it’s what kind of care you need that determines how much you spend in the long run.”
Goodman said HSAs should be modified to allow the chronically ill to manage more money to meet their increased needs.