How Health Savings Accounts Can Transform Your Health Care Costs
Health Savings Accounts (HSAs) have the potential to drastically improve the affordability of health care for you and your family.
Unfortunately, far too many Americans have never even heard of them.
What is an HSA?
A Health Savings Account, or HSA, is a powerful way to take control of your health care expenses, combining tax savings with long-term financial flexibility. It can be used for a wide range of medical costs, including doctor’s appointments, surgeries, prescription drugs, and medical devices.
And it’s tax-free, which means you’re getting a big discount on every health care purchase you make.
There’s also no “use it or lose it” problem with HSAs. Unspent funds in an HSA stay with you forever, allowing you to save for future medical expenses or even build up a nest egg for health care costs in retirement. This allows you to prepare for both immediate and long-term medical needs.
Most importantly, HSAs eliminate the insurance middleman, allowing you to make your own health care spending decisions. Instead of being restricted to whatever your insurance company dictates, you can use your HSA for the coverage that works best for you.
In short: An HSA is peace of mind.
Watch this short video to learn how HSAs can put you in control of your own health care.
HSAs save money for those who need it most
There’s a common misconception that HSAs are just for the wealthy.
But the reality is that they can make the biggest impact for middle- and lower-income families. When your health care funds are limited, that’s when you’re most in need of a system that allows each dollar to go further.
A five-year study by the Health Care Service Corporation (HCSC) found that patients spent:
- Nearly 25% less on inpatient care
- 14% less on specialty care
- 5% less on outpatient care
As more families enroll in HSAs, health care spending at the national level could decrease by as much as $73 billion, according to a 2012 study in Health Affairs.
When you control exactly where your health care dollars go, providers are incentivized to provide you with the highest quality service at the lowest cost.
The barriers holding back HSAs
If HSAs are so great, why aren’t more Americans using them?
Short answer: overregulation.
The fact is that 90% of Americans are ineligible for HSAs due to bad government policy that acts as a barrier for far too many Americans.
Here are three common-sense reforms that could allow more Americans like you to take control of your health care spending:
- Increase HSA availability: HSAs are only available to those with high-deductible health plans. The millions of Americans on Medicare are also barred from having an HSA. Lawmakers can and should cut this red tape and drastically expand the number of people who are eligible.
- Expand HSA contribution limits: Federal law restricts individuals from contributing more than $4,300 annually to their personal HSAs, while families are limited to $8,550 next year. These limits are often not enough for the rising cost of medical care. Allowing higher contributions would help individuals and families save more effectively.
- Expand what HSAs can be used for: Currently, federal regulations prevent individuals from using HSA dollars for many essential health expenses. For example, HSA holders cannot use their contributions for insurance premiums or direct primary care (DPC) membership fees. These arbitrary restrictions do nothing but prevent people from choosing the best way to allocate their limited health care funds.
If you believe in giving people more control over their health care, click here to sign our petition to expand eligibility and increase the benefits of HSAs for all Americans.
