An article in today’s Wall Street Journal will no doubt have opponents of health savings accounts (HSAs) hyperventilating about how HSAs have failed. But the difficulties that consumers are experiencing are predictable, if not welcome, and some dissatisfaction with HSAs is no doubt a good thing.
Vanessa Fuhrmans writes [$]:
President Bush and many big employers have hailed “consumer-directed” health plans and savings accounts as an effective weapon in the battle against runaway medical costs. But several years after the plans got off to a fast start, the approach appears to be stumbling — largely because of consumers’ unease in using them…
[L]ow enrollment and low satisfaction among workers who are offered them raise the question of whether consumer-directed plans will stall before they ever hit the mainstream.
In a paper responding to common criticisms of HSAs, I argued that some of the inevitable consumer dissatisfaction is necessary, but much of it can be mitigated by expanding HSAs:
Read the rest of this post →There are good reasons not to draw any firm conclusions based on current survey research…First…none of the surveys measures consumer satisfaction with HSAs alone, or at their full potential. Second, some dissatisfaction inevitably stems from unfamiliarity…This source of dissatisfaction can be expected to dissipate over time…
Finally, HSAs may be unpopular for reasons that should not sway policymakers… HSAs are designed to eliminate inefficiencies and hidden cross-subsidies. If that causes some dissatisfaction, it means that HSAs are achieving their purpose, not that they should be abandoned. If we stop robbing Peter to pay Paul, Paul’s dissatisfaction should not persuade us to change course…