{
  "id": "R41426",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R41426",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 439912,
      "date": "2010-09-22",
      "retrieved": "2016-04-07T01:27:36.783235",
      "title": "High-Deductible Health Plans and Health Savings Accounts: An Empirical Review",
      "summary": "Health Savings Accounts (HSAs), as authorized by the Medicare Prescription Drug, Improvement, and Modernization Act (P.L. 108-173, MMA) of 2003, are tax-preferred savings accounts used to pay for unreimbursed qualified medical expenses such as health insurance deductibles, copayments, and services not covered by insurance. To contribute to an HSA, the insured must have a high-deductible health plan (HDHP), and generally no other health insurance coverage. One of a number of the stated goals of the 2003 legislation is to encourage workers to better save for their health care in retirement. Moreover, the HDHP/HSA combination is thought to provide incentives for the consumers to be more active in their care, and purchase the best possible medical services for the lowest possible price. This report analyzes existing data and reviews the current literature to discuss whether HDHPs and HSAs have begun to meet some of these objectives. \nEnrollment in HDHPs has been increasing since HSAs were introduced in 2004. Nevertheless, the HDHP enrollment growth rate is slowing. Individuals who have an HDHP may or may not open an HSA; it is estimated that between 51% and 58% of HDHP holders go on to open an HSA. Whether opening an HDHP/HSA is financially advantageous is a complicated issue. In fact, those at many levels of the health spending distribution might save money by opening an HDHP/HSA instead of enrolling in a standard preferred provider organization (PPO) plan (the most common type of health insurance plan).\nA review of the literature on HDHPs and HSAs suggests the following: \nHSAs are designed to change consumer behavior by providing incentives for consumers to be more concerned with the cost and quality of their health care. Although a few studies suggest this is happening, the literature in this area reports mixed and inconclusive results.\nHSAs could encourage individuals to save for their health expenses in retirement. However, because only about half of HDHP plan holders open an HSA, the remaining half are not saving for their health expenses in this tax-preferred account. Among those with HSAs, some may be using the account as a tax benefit and not saving for health care in retirement.\nThe uninsurance rate could potentially decrease with the advent of HDHPs as previously uninsured individuals purchased these plans because of their relatively low premiums. There is little evidence, however, that the currently uninsured are transitioning into HDHPs.\nSome hoped that a change from standard PPO plans to HDHP/HSA plans would lower aggregate health expenditures. They maintain that expenditures would fall if most of those insured in a standard PPO plan actually moved to an HDHP/HSA. \nThe empirical evidence backing many of these results is weak or limited, and much remains unknown about the effects of HDHPs and HSAs on uninsurance, the utilization of health care, and aggregate health expenditures.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
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}