Amid Rising Costs of Health Care, HSAs Provide Relief


NEW YORK (MainStreet) -- A new survey from the Commonwealth Fund, a private health policy foundation, paints a grim picture of health care in the U.S. The survey, which included more than 18,000 adults from 11 countries, found that more than a quarter of those surveyed in the U.S. were either unable to pay or had difficulty paying for medical services in the past year.

Furthermore, Americans experienced the worst health care outcomes, despite spending more on health care costs than any other developed nation – approximately $8,000 per person. In comparison, Norway had the second highest spending output at $3,000 per person.

Given the high cost of health care in this country, it’s no wonder Americans are getting creative about their health care spending. One way they’re doing so is through health savings accounts (HSAs), which the IRS defines as a tax-exempt trust or custodial account that you set up with a qualified HSA trustee to pay or reimburse your medical expenses.

What's more, according to the 2011 Employer and Account Holder Surveys, two national surveys by ACS and Buck Consultants of more than 14,000 existing account holders and 300 employers, both groups found cost-saving benefits in HSAs. The results show that small employers, in particular, see HSAs as a good way to control health care costs. In addition, more than half of those surveyed – about 56% – said that HSAs are an “affordable” health care option.

The surveys also show that the average direct cost of an HSA is $5,469 for individual coverage and $9,909 for family coverage. In comparison, the average non-HSA health care plan cost is $7,158 for individuals and $10,691 for a family.

Besides costs, consumers seem to like the control that HSAs give them. The ACS and Buck Consultants data reveals that about 75% of survey respondents said that controlling their health care costs is either an “extremely” or “very” important factor in personal health care management.

The study also shows that HSA users are more likely to make healthier lifestyle choices (like eating a good diet and getting exercise) that give them a better chance of not having to pay for medical services in the first place. This suggests that when consumers deal with commodities they have control over, they tend to make better and more budget-conscious lifestyle decisions.

“This year’s survey results reveal an interesting phenomenon – HSAs are doing more than just saving consumers and employers money,” notes Tom Hricik, a principal executive at ACS/HSA Solution.

The study also found that 18% of HSA holders have researched preventive care programs and 28% have shopped for lower-cost prescription drugs. Both of those help keep the cost of health care down and leave more money in the pockets of consumers, the study says. Other notable findings include:

  • 72% of account holders indicated that they actively chose the HSA-qualified plan although other plan options exist for them.
  • 82% of account holders surveyed reported that the ability to save tax-free money was “extremely” or “very” important in selecting an HSA-qualified plan.
  • 79% of respondents state that having an HSA is valuable to them.
  • 64% of respondents said that their HDHP/HSA combination meets their family’s needs.

As “consumers” of medical care, HSA users are overall more likely to be diligent about shopping for heath care, as every dime saved goes back into their own pockets. That doesn’t only help HSA consumers – it helps keep the health care system cheaper and more accessible for all consumers. That’s the health care reform consumers could really use – and more and more Americans are starting to notice.

—For more tips and tricks on managing your medical costs, visit MainStreet’s “Health Care” topic page for our latest coverage!

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