This insurance coverage essentially acts like an individual retirement account, where the money is reserved for any future medical costs. By law, the tax-free savings are meant to cover out-of-pocket expenses that can occur with high-deductible insurance policies.
Instead of paying high premiums every month, the high-deductible plans leave you with a large bill right off, which can run between $1,000 to $5,100 for single coverage and up to $10,200 for a family.
Faced with spiraling medical bills for employees, companies have been quick to embrace health savings accounts as a cost-cutting measure.
Some say This type of insurance could save everyone money in the long run, and by making consumers more engaged, may even improve care. While Henry Waxman, a Democratic Congressman from California said. "The President's health savings account plan combines the worst elements of the President's failed Social Security privatization plan and his Medicare prescription drug fiasco."
The biggest losers under health savings accounts tend to be those with chronic diseases, who blow through their savings by having to continually buy medications. This doesn't have to be the case, as long as the plans incorporate preventive and wellness programs as part of the insurance offering.
Uwe Reinhardt, a health economist at Princeton, says that such savings accounts are ultimately a poor way to fix an ailing healthcare system. The trend of shifting more responsibility to consumers, which started under President Regan, has failed to reduce medical costs overall, nor has it stemmed the rising tide of Americans who go without medical insurance.
The problem, in part, has to do with supply and demand.
"The vast majority of the healthcare items are bought by those who are seriously sick," he says, which is not going to change with a greater use of savings accounts.
This new type of cost awareness may make some question lifestyle drugs like Viagra, but few are in a position to negotiate with hospitals and big drug companies when they really need to.
"Healthcare is not like buying a shirt," says Reinhardt.
Indeed, the intricate medical billing systems make it difficult to comparison shop, he says, and the complex human body is why doctors spend seven years or more in medical training.
What the health savings accounts are really good for, Reinhardt concedes, is making money.
"I have one," he says. "We can buy all kinds of things."
These saving accounts will not help those who have little money to begin with, which means that emergency rooms and the government will be left to pick up the pieces. Even the architects of health savings accounts, who outlined their plans in the book, Healthy, Wealthy and Wise, claim that such broad-scale savings might insure an additional 20 million Americans, well short of the 45 million who are not covered now.
In the end, some experts fear, health saving accounts will simply make it more expensive for everyone to get care.
"These are a sign of how desperate we've become," says Fronstin.
The feedback UnitedHealth has received so far suggests that health savings accounts are working. Yet, a hard to dismiss concern is that greater financial discipline can also drive people away from seeing a doctor.
A study by the RAND Corporation found that greater out-of-pocket expenses cut down on questionable health spending, but at the cost of not seeking out effective preventative care. Those with a low-income who spent more of their own money on health ended up with poorer blood pressure control and were more likely to skimp on annual tests, such as Pap smears.
Stacey of Hewitt Associates says that those who remain healthy tend to benefit the most from these plans. If you suffer an emergency, such as a heart attack, you are likely to break even, since high deductible plans have the same catastrophic coverage as traditional insurance.
The biggest losers under health savings accounts tend to be those with chronic diseases, who blow through their savings by having to continually buy medications. Stacey says this doesn't have to be the case, as long as the plans incorporate preventive and wellness programs as part of the insurance offering.
People with diabetes, for example, can benefit from insurance programs that also focus on lifestyle changes, such as diet and exercise. Still, he and others do not see health savings accounts as the final answer in cutting costs.
If you clicked on the photo above and saw the video, maybe it could help you decide, if this type care will help. I really dont know. What do you think?
Technorati: health savings account, health care ,medical bills, RAND Corporation and insurance coverage