NCPA - National Center for Policy Analysis


October 12, 2004

With the cost of health insurance on the rise for both employers and individuals, proponents say Health Savings Accounts (HSAs) give individuals more incentive to manage their health care and its costs -- especially when the first few thousand dollars are out-of-pocket. The idea is that once individuals with high deductibles put their money into an HSA, they will think about whether certain treatment or medication is necessary, and they will look to negotiate on price much as they would when shopping for a car. What's more, HSAs are touted as another way to save tax-free because unused money rolls over year after year.

Pam Wimbish was the first person in the country to buy into a new health savings account earlier this year. Since then, she has definitely gotten more involved in -- and choosy about -- her care:

  • Before the surgery on her foot, she asked how much it would cost; she offered to pay upfront on the day of the procedure and got a 50 percent discount in return, reducing the surgery center's fee to $630 from $1,260.
  • When she found out an anesthesiologist was going to be brought in to numb her foot, Wimbish asked for the doctor performing the operation to do it instead; the doctor's total bill was negotiated down to $275 from $400.
  • Lastly, she decided to fill a prescription the doctor gave her for antibiotics, but not one for a painkiller.

Devon Herrick, a senior fellow with the National Center for Policy Analysis, says it isn't that hard for consumers to do a better job of managing their own health care. "For any given ailment there are a variety of treatments," he says. "The trouble is no one ever bothers to ask."

Source: Sarah Lueck, "Decisions, Decisions: Health savings accounts give consumers more incentive to manage their health care and costs. But will they have the knowledge?" Wall Street Journal, October 11, 2004.

For WSJ text (subscription required),,SB109717674045039468,00.html


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