Stop Health Savings Accounts

In his State of the Union address, President George W. Bush announced the centerpiece of his efforts to reform health care would be tax breaks for people to pay for their own health care, including health savings accounts (HSAs), in which people replace traditional insurance coverage with their own savings.

HSA-based health care would be a disaster for working families, a giant step backward that would shift costs away from employers to employees and their families and force many people to go without needed care.

Write your U.S. representative and senators and tell them you oppose Bush's plan for health savings accounts.

Sample Letter for Campaign

Subject: HSAs Will Hurt Working Families

Dear [ Decision Maker ] ,

In his State of the Union address, President George W. Bush announced his support for increasing tax benefits for health savings accounts (HSAs), an enormous step backward that would reduce the health care coverage available to working families.

I strongly oppose health care policies based on "consumer directed health care" and HSAs, which would force many people to replace health care coverage with their own savings. Here are some of the reasons HSAs are a mistake.

* The idea behind health savings accounts is that Americans have too much insurance. You read that right. Those who came up with the idea believe Americans are overinsured, something that very few working families would likely agree with.

* Despite the rhetoric, HSAs will do nothing to control skyrocketing health care costs or reduce the number of uninsured. In fact, they will just make matters worse for those who have health coverage.

* By shifting the costs to workers, HSAs provide cover to employers to reduce or even eliminate health benefits. It will undermine employer-based health plans, where two-thirds of Americans get their coverage.

* HSAs will drive the wealthy and healthy away from health care insurance, driving up the costs for those who need insurance the most. Seniors and those who need health care coverage will see their premiums skyrocket.

* HSAs are brought to you by the same people who brought you the Medicare prescription drug disaster, and it will have the same consequences. It's a boon to the profit-driven drug companies and insurance industry. It's complicated, fragmented and costly.

I urge you to reject Bush's proposals to replace traditional coverage with HSAs and to work to expand health care coverage for working families instead of taking it away.

Sincerely,

Campaign Launched:
February 01, 2006

Background Information

America’s working families are facing a crisis in health care: 46 million Americans have no health insurance and health care costs are rising three times the rate of inflation. Meanwhile, employers are shifting more health care costs onto workers—or simply dropping health coverage all together.

But President George W. Bush’s answer to the health care crisis—individual health savings accounts (HSAs), so-called “consumer-based health care”—will end up costing consumers more money and providing less health care.

HSAs require high out-of-pocket expenses—a minimum of a $2,000 deductible for a family, but as high as $10,000 in some cases—before workers’ coverage actually kicks in. As a result, many workers and their families are likely to go without critical health care or delay seeking needed care.
Workers who remain in more comprehensive coverage plans will see their premiums increase as younger and healthier workers opt for the high-deductible HSAs. Under the HSA plan, older and less healthy employees would be pooled together in a higher risk group and insurers would raise premiums. As employers face higher premiums for traditional employer group health plans, employers would be more likely to shift even more costs to workers, or drop traditional health coverage all together in favor of high deductible HSAs.
HSA plans will discourage preventive care, ultimately increasing the cost of health care in the United States.
Most uninsured Americans could not save large amounts of money to put into HSAs. Because most low-income people have little disposable income after paying for housing, food and other necessities, it is unlikely they could manage to spare $1,000 (or much more, in some cases) to put into an HSA. And many uninsured don’t even have enough income to see any benefits from the tax breaks.
Racial and ethnic minorities suffer disproportionately from chronic conditions and so are less likely to benefit from HSAs. For example, African Americans and Latinos are twice as likely to suffer from diabetes as whites. Because racial and ethnic minorities are more likely to have acute or chronic conditions and are more likely to be low income, they are far less likely to benefit from HSAs and far more likely to be harmed by high deductibles.
Bush’s HSA plan actually could increase the number of Americans without health insurance. A recent analysis by Massachusetts Institute of Technology economist Jonathan Gruber estimated as many as 350,000 people currently insured at work would lose their coverage as employers used the new accounts as reasons to op coverage.
HSAs would undermine employer-sponsored group insurance—the backbone of health care financing in the United States.

The HSA Council is one of the big supporters of health savings accounts. Its efforts to promote HSAs are similar to those by the financial services industry to promote Social Security privatization, which sought financial backing from Wall Street firms. The Social Security privatization backer then funneled funding through industry front groups such as the Alliance for Worker Retirement Security and the Coalition for American Financial Security.

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