NCPA - National Center for Policy Analysis

HEALTH SAVINGS ACCOUNTS SLOW TO CATCH ON

October 23, 2006

Studies have shown that Health Savings Accounts (HSAs) have been slow to catch on with consumers.  A survey by the Kaiser Family Foundation found that only about 4 percent of covered workers are enrolled in such plans in 2006, a rate statistically no different from last year.  And while many experts see this model as the wave of the future for employee benefits, workers need to be better-educated about the plans, and the rules need some improvements.   

But the use of HSAs could rise with two recent announcements by Wal-Mart:

  • Starting in January, Wal-Mart's primary health insurance offering for new employees will be a high-deductible health plan with premiums as low as $11 per pay period in some areas.
  • After employees are enrolled in Wal-Mart's coverage for a year, they can pair the high-deductible plan with a health savings account, plus a contribution of up to $2,400 from Wal-Mart.

Because of Wal-Mart's size, its move is "very significant," says John C. Goodman, president of the National Center for Policy analysis (NCPA). 

What's more, Wal-Mart's recent announcement that it's expanding its offer of $4 prescriptions for some generic drugs to Texas will enable consumers to better use HSAs, said Devon Herrick, a senior fellow at the NCPA.

"Wal-Mart gives price transparency," Herrick continued.  "You would immediately know what the price is.  With a drug plan, you have to call the drugstore, you have to ask them how much does this drug cost, and they would ask you who insures you."

Source: Pamela Yip, "Health savings accounts slow to catch on among insured," Dallas Morning News, October 23, 2006.

 

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