Senator Hatch Pushes Health Savings Accounts

None by KCPW

Critics Worry HSAs Will Hurt Utah's Poor

(KCPW News) Utah Senator Orrin Hatch wants to expand the relatively new practice of Health Saving Accounts or "HSAs," in which people pay pre-tax dollars into a fund that can be used to cover medical expenses. But Utah Health Policy Project Director Judi Hilman worries more Health Savings Accounts will do nothing to help Utah's poor and uninsured.

"It's the folks who can't afford to sock extra pre-tax dollars away who really need the help," says Hilman. "What will also happen is you're going to take the younger, healthier people out of the risk pool, leaving behind the sicker and poor. Their health care costs are going to go up even higher."

Hatch's bill will allow more people to qualify for HSAs, let them rollover money from some retirement plans and allow additional expenses to be paid from the account. He argues that "for many Americans and businesses, the cost of health insurance premiums are rising so astronomically that the choice is between an HSA plan and no insurance at all." Hilman believes the problem is treating health insurance like a commodity.

"You don't go around looking for triple bypass surgery because it's on sale, you know?" says Hilman. "We hope health savings accounts are sort of the last gasp of this blind faith we've had in this market commodity concept of health care."

Hilman urges lawmakers to focus on traditional insurance principals like expanding the risk pool and focusing on economies of scale. Since Congress established HSAs in 2004, more than three million people have enrolled in them. Without any changes to the law, it is estimated that by 2008 there will be six million HSA owners with almost $5 billion in assets.

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