HSAs Give Consumers Greater Control, Greater Savings

by Marilyn Tavenner

February 16, 2017

Health care costs – particularly out of control prescription drugs costs – continue to hurt too many families.  To bring down costs, consumers need more choice and more control over their care and coverage – and that’s why Health Savings Accounts (HSA) are such an important tool. Today, more than 20 million consumers are using HSAs, according to new research from AHIP. As policymakers take action to make coverage more affordable, HSAs must be a critical part of the solution.

What makes HSAs so useful and beneficial? The funds that go into and come out of an HSA are tax-free. Consumers can pay for certain medical expenses, like their deductible and copayments, with pre-tax or tax-deductible dollars. HSA tax savings help millions of hardworking families set aside money for medical costs, all while allowing them to stretch their budgets further.

At a time when consumers are becoming more engaged with their health care, HSAs empower consumers to choose how to spend their health care dollars. And they incentivize consumers to make good choices. The savings achieved from making health care decisions based on quality, efficacy, and cost stay with the consumer. In fact, consumers will never lose the money in their HSA. Any unused funds roll over each year to be used for future health care needs. If people change jobs or retire, they keep their HSA funds and can continue using them to pay for their health care. And like any financial account, HSA funds can earn interest.

HSAs are so important in part because they help consumers make informed, value-based decisions about their health care. Many HSAs include online tools that provide consumers with access to information about their health conditions, as well information on prices and quality for specific health care services in their area. With this information, consumers can confidently can seek out lower-cost, higher-quality treatments.

As the health care industry changes, we should look to HSAs as an effective solution that brings affordability and security to consumers. By making HSAs more flexible for the individual market, they can be a useful a way to provide consumers with greater control while making health care more affordable.

Marilyn Tavenner is President and CEO of AHIP.