Context From The Talk

Importance of Health Care Saving Accounts

“Key points are essential to clarify from the start. Number one, HSAs are a vital, proven, and highly effective tool to broaden access to affordable high-quality health care for all Americans, even those without HSAs. They do so by putting consumers directly in charge of buying their own health care. HSAs uniquely incentivize savings. The fundamental purpose of an HSA is not simply to provide a tax-sheltered benefit for individuals in order to cushion the blow of high health care expenses. The HSA is not an isolated independent component of the health care system. Reforms to maximize their positive impact for consumers are tied to other reforms. To broaden access to affordable high-quality health care for all American, there are three fundamental steps that must occur and all directly relate to HSA reforms. 

Patients much be strongly incentivized to consider medical care prices and simultaneously equipped with the tools to do so. This is accomplished through universally available large liberalized and transferable HSAs in conjunction with lower cost, higher deductible insurance. The key question is if it is realistic to suggest that patients could consider prices even among the privately insured. For adults under 65, almost 60% of all health expenditures is for elective outpatient care. Even in the elderly, almost 40% of expenses are for outpatient care. Outpatient services dominate America’s health care spending and are amenable to price conscious purchasing. To fully leverage the impact of HSAs, it’s important to position more patients paying directly despite the ACA’s regulatory attempt to shift consumers to more comprehensive coverage. 

A shift toward high deductible plans with HSAs has continued by people increasingly choosing HSAs. When given the opportunity, Americans are approving their value. 

HSAs with high deductible coverage have proven to reduce health care prices. Spending reductions average 15% per year and increase with the level of deductible when paired with HSAs. Adding HSAs to high deductible plans correlates to fifty percent to double the savings of high deductible plans alone. 

Downward pressure on healthcare prices from doctors competing for patients who pay directly for care has been demonstrated by procedures originally not covered by insurance, like Lasik, corrective eye surgery or MRI and CT screening.  Data from MRI and outpatient surgery (covered care) confirms that when patients are motivated to compare prices, prices come down significantly. And this reduces prices for all health care consumers, not just HSA holders.

The issue is not whether HSAs are effective in how to make health care more affordable, it’s how to maximize their adoption and fully leverage them.”

Click here to watch the Joint Economic Committee session with Scott Atlas.