Only high- and low-spenders stand to benefit, new study suggests
TUESDAY, July 11 (HealthDay News) -- Health savings accounts (HSAs), combined with high-deductible health plans, can decrease cost-sharing for Americans who spend the least and the most on health care, but actually increase cost-sharing for people in the middle, a new study finds.
The study also concluded that HSAs aren't likely to stop the continued rise in health care spending.
HSAs are a form of medical savings account that must be accompanied by a high-deductible health plan -- at least $1,050 for an individual and $2,100 for a family. HSAs permit people to save money tax-free and use that money (also tax-free) to pay their out-of-pocket health care costs.
As reported Tuesday in the July/August issue of the journal Health Affairs, this Commonwealth Fund study found that tax subsidies may help decrease cost-sharing for people with HSAs.
The researchers also noted that people with high-deductible plans can hit the plans' out-of-pocket maximum much sooner than people in more comprehensive plans, which potentially reduces the total amount of spending that's subject to cost-sharing.
In their study, the authors compared HSAs combined with high-deductible plans to traditional health insurance policies
They concluded that the 7.7 percent of people who are responsible for half of all medical spending in the United States would see either a decrease or no change in their levels of cost-sharing under an HSA/high deductible plan.
Cost-sharing would increase, however, for people who spend between $700 and $6,100 of their own money on health care, the study said.
"Health care spending is highly concentrated among a small group of people who have very high medical costs," study co-author Dahlia Remler, professor at the Baruch College School of Public Affairs at the City University of New York, said in a prepared statement.
"This study shows that a high-deductible HSA would have no effect on this spending, leaving a negligible impact on health care costs," Remler said.
"This analysis points to the importance of considering the tax subsidies provided by HSAs," Karen Davis, Commonwealth Fund president, said in a prepared statement. "Tax subsidies benefit higher-income individuals disproportionately, while failing to achieve the purported advantages of high-deductible plans. Public subsidies should instead be targeted on these least able to afford health insurance or health care."
The Commonwealth Fund is a private foundation that supports independent research on health and social issues.
SOURCE: Commonwealth Fund, news release, July 11, 2006
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