Health Savings Accounts (HSAs) are one of the first developments in so-called consumer-driven health care. Proponents of consumer-driven health care believe that individuals must have some "skin in the game" to make smart decisions about their own health care, and that this will bring down health care costs overall. HSAs are tax-free accounts into which a consumer and/or his/her employer can deposit money that can be used to pay for health services.
The goal with the HSA is that employees will think more carefully about how they spend such funds since they "own" them. As a result, they will be smarter consumers who will help to shape the health care market through their choices.
The Bush Administration promoted HSAs.
Proponents believe the regulations around HSAs should be more flexible and that there should also be an opportunity for individuals to save for their health care in retirement. Critics argue that it is unwise to leave financial health care choices totally in the hands of individuals and worry that consumers might skimp on important care.
Featured Podcast
Current State and Prospects for Consumer Directed Health Care Kim D. Slocum, President of KDS Consulting speaks with Malorye Allison, editor-in-chief of ReformPlans.com.
