Health Savings Accounts - A New Way of Paying for Medical Care

The Wall Street Journal reported about a report from the General Accounting Office that found those individuals who purchased health savings accounts tended to be wealthier. Health savings accounts (HSAs), which must be coupled with a health insurance plan with a high-deductible, has been the cornerstone of the Republican plan to improve healthcare inflation. Certainly the premiums for a high-deductible plan are significantly cheaper than traditional plans by up to 50 percent and the rate of health care costs slowed to about 3.6 percent as compared to 7 percent for companies that adopted HSAs. The concern among some is that those with HSAs are getting less medical care and services.

Is this a bad thing? It depends. If individuals decreasing unnecessary care because now they are responsible for the deductible then less consumption of healthcare is a good thing. If, however, people are putting off or delaying important preventive care this could be more costly and detrimental in the future. Preventive care can often find problems before they become expensive debilitating problems.

For example, would you delay getting your car maintenance if you had a high deductible? It depends. If you could not afford to have your car breakdown at the most inopportune times, then you might get routine regular preventive care. You might even do it yourself and change the oil and rotate the tires if you knew how to and had the time. If, however, you didn't know what to do, then you might not do it or figure it is unnecessary and take your chances. The difference between our bodies and our cars is you can always buy a new car.

From the article:

• Some analysts say much of those employer savings come because many HSA participants tend to forgo care. "There is a lot of evidence that suggests that when patients pay a higher percentage of the cost of their care they get less of it," says Michael Thompson, a principal at PricewaterhouseCoopers, which advises employers on health plans.
• Self-employed attorney Jonathan Stein, 34, of Elk Grove, Calif., got an HSA in 2005. Because he is responsible for paying the entire bill, he didn't go to the doctor for a recent bout of flu and doesn't get annual physicals despite a family history of heart disease and cancer. "My doctor and I fight about that when I do see her because she wants me to come in every year," Mr. Stein says. "If it was covered by insurance I'd probably go."
• Watson Wyatt expects 54% of big companies next year to offer high-deductible health plans, many of which are HSA eligible, up from 39% in 2007. Since the plans were introduced in 2004, more than six million Americans have enrolled in HSA-eligible plans, although that represents a small percentage of the more than 200 million people with private health coverage.

HSAs make sense for individuals who know when to get care and when to safely skip care. Having less medical care isn't a bad thing as long as it makes sense and won't cause problems in the future. Who best to figure that out? Empowered and educated patients. If you don't feel like you have the knowledge or expertise to figure it out, then who next? A primary care doctor. After all, if you are like many people, you don't do the actual car maintenance yourself, you have a trusted mechanic tell you what needs to be done. The same applies to your health. The difference is that your health advisor is your doctor.