HSAs address rising healthcare costs

WHAT IT MEANS AND WHY IT’S IMPORTANT — Give a man a doctor’s co-pay, and he is healthy for a day. Give him a health savings account, and that man becomes so much more vested in ensuring positive health outcomes that he may be healthy for a lifetime. Because in the long run, it’s cheaper.

(THE NEWS: HSAs saw dramatic growth in 2010, study finds. For the full story, click here)

The increased adoption and utilization of health savings accounts by consumers speaks to the important role a consumer with a leg in the race will play in helping to manage escalating healthcare costs. It creates an infrastructure whereby HSA holders, or flexible spending accounts holders for that matter, become educated healthcare consumers and correspondingly spend their dollars more wisely.

That’s why placing any kind of disincentive into this kind of consumer-directed health plan, such as requiring a prescription for reimbursement on nonprescription items under HSA or FSA plans, does not make intuitive sense. An analysis conducted by the Foundation for Healthsmart Consumers found that between doctor visits and retail pharmacies, healthcare costs associated a prescription requirement on the purchase of over-the-counter medicines could reach as high as $4.5 billion in one year if even 10% of the population begins making additional appointments with their practitioners. So rather than drive down costs of health care, that significantly increases healthcare costs.

According to America’s Health Insurance Plans, the average premiums for HSA-eligible plans are approximately 15% to 20% lower than average premiums in the overall employer market. Consumers with HSA-eligible coverage appear to be more aware of healthcare costs than consumers with non-consumer-driven health plan coverage — 63% of HSA-eligible enrollees tracked their healthcare expenses, compared with 43% of non-CDHP enrollees; 38% of HSA-eligible enrollees estimated their future health expenses, compared with 19% of non-CDHP enrollees; and 47% of HSA-eligible enrollees were saving for future health expenses, compared with 18% of non-CDHP enrollees.

And recently, Congress introduced a bill to restore FSA eligibility for OTC purchases. Do you think it should become a law? Sound off by voting in our latest online poll.