Policy Documents

The How-To Guide to Health Savings Accounts

Liv S. Finne –
June 1, 2005

A discussion about the benefits of Health Savings Accounts vs. Employer paid health care coverage, author Liv S. Finne writes;

Health Savings Accounts (HSAs) address the basic economic distortions caused by the third-payer system.  Consumers with HSAs have a tax-free account with money to spend on routine medical costs, combined with an  inexpensive,high-deductible insurance policy to pay for catastrophic medical care in case of major accident or serious illness.  Consumers with HSAs have a financial incentive to spend their dollars wisely, because unspent dollars accumulate tax-free in their own personal accounts.  Consumers are now able to shop around, compare prices and providers, and select the medical services that are best for them.  The resulting market competition puts urgently-needed downward pressure on rising health care prices.