Health Care Costs Dropping Due to Health Savings Accounts, Not ObamaCare
January 27, 2014
President Obama attributes slowing health care costs to the Affordable Care Act, but the slowdown is actually due to Health Savings Accounts (HSAs), says Peter Ferrara, a senior fellow at the National Center for Policy Analysis.
ObamaCare only went into effect this year, while the health cost slowdown began 10 years ago. HSAs were enacted into law in 2003 and they have seen remarkable growth:
- The accounts grew by a full 22 percent in 2012.
- Total HSA assets in 2012 were $15.5 billion, and they were projected to grow 22 percent again in 2013.
- At the beginning of 2013, an estimated 15 million Americans were covered by HSAs, and 20 million Americans were covered by Consumer Directed Health Plans.
At the same time, national health spending growth has dropped to 3.9 percent every year between 2009 and 2011, and to 3.6 percent in 2012. This is nearly two-thirds slower than a decade ago, and it is the slowest rate of increase in health care costs since the 1960s.
ObamaCare, on the other hand, has only increased health care costs. HSAs reduce health care cost growth because patients have control over their health care dollars and face incentives to control costs.
- HSA costs have run close to 25 percent less than costs for traditional health insurance, and annual cost increases for HSA plans have been more than 50 percent less than traditional health care coverage.
- A 2012 study by the Rand Corporation found that national health costs would drop by nearly $60 billion if half of all American workers used HSA plans.
HSAs should be extended across the health care marketplace to reduce the growth of health care costs. Medicare and Medicaid enrollees should be able to use HSAs, as should those with employer-provided coverage. Combined with the ability to purchase insurance across state lines and tort reform, these three innovations would solve the problem of skyrocketing health care costs.
Source: Peter Ferrara, "Obama Should Stop Taking Credit: Health Savings Accounts Are Driving Down Costs," Forbes, January 21, 2014.
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