HSA Owners are Neither Wealthier nor Healthier (But They May Be Smarter)

An EBRI report finds that 45% of consumer-driven health plan (CDHP) enrollees have incomes of $50,000 to $99,999, while only 38% of traditional plan enrollees do. 46% of CDHP enrollees have a college degree and another 21% have a graduate degree, compared to 23% and 11% respectively for traditional plan enrollees, however. The report also says, “There are no statistically significant differences in self-reported health status between CDHP and traditional plan enrollees.”

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  1. Devon Herrick says:

    Pundits and opponents have long tried to smear HSAs as being only beneficial to the healthy and wealthy. This is ridiculous. Young people, those willing to carefully watch their medical spending and those with chronic conditions all find they benefit.

    The real reason left-leaning opponents dislike HSAs (and CDHC in general) is because they simply do not believe anyone should consider the cost when seeking care. Nor do they believe anyone should benefit (or suffer) financially for behaviors that improve or harm their health status.

    Since resources are finite, someone will have to decide between care and other uses for our money. If not patients themselves, it will be a third-party bureaucracy.

  2. Linda Gorman says:

    Study was an internet survey. Random sample of 2007 adults drawn from “Synovate’s online panel of Internet users who agreed to participate in research surveys.” Response rate: 27.4 percent.

    Originally there were 94 people with a consumer directed policy (HSA or HRA–not flexible spending) in the sample. That’s about 5% of the sample. They went back and oversampled, a lot, to get usable amounts of CDHP people.

    With respect to original sample, Census says roughly 200.4 million people had private policies in 2007. AHIP estimated 6.1 CDHP/HSA accounts, 3% of Census total, in same year. AHIP does not include health reimbursement plans in its consumer directed total, EBRI does.

    If I’ve done the calculations correctly, and the EPRI sample’s account distribution is assumed similar to the AHIP policy count, then it seems like this is saying that the percentage of people with health savings account CDHP plans is larger than the percentage with health reimbursement CDHP plans.

    Is this reasonable? Perhaps people with more knowledge of health insurance could comment?

  3. artk says:

    If you look at the actual study, you’ll find the “smear” is accurate. It’s the young (which means healthy) and the affluent who use HSAs. Why should that be a surprise? We have a graduated income tax structure, that make’s HSAs more advantageous to higher income groups. If you don’t have many medical expenses, then higher deductibles and higher co pays don’t cost you much.

  4. Virginia says:

    I agree with Devon. People hate HSA plans because giving the consumer control over health spending ultimately implies that the consumer has control over his/her health care decisions.

  5. Linda Gorman says:

    People with lower incomes or higher health expenses can benefit from CDHPs simply because they free a chunk of health spending from expensive insurance company regulation. This helps people buy the care that they need with minimal effort, care that might not even be covered under a standard health plan. The concern over high deductibles is overdone because that is usually balanced by lower premiums.

    The poster children examples of this are the Robert Wood Johnson Foundation Cash & Counseling Medicaid pilots. CDHP was better for chronically ill Medicaid beneficiaries because it actually allowed them to access the benefits they were supposedly entitled to.

    Under traditional Medicaid arrangements, the red tape was so overwhelming that it kept people from getting services. Low income people are often the most disadvantaged by excess administrative regulation because they have neither the excess resources or the excess energy necessary to fight their way through it.

  6. Devon Herrick says:

    artk, I’ve seen various reports on the distribution of HSA and CDHC enrollees and it tends to be heavily represented by people in their mid-to-late 30s, 40s and early-to-mid 50s. Young people may stand to gain the most (through the sheer amount of time until retirement, among other reasons) but they are probably not yet sufficiently worried about the future to embrace HSAs as aggressively as they should (nor would they tend to be in a high tax bracket).

    I like my HSA — I’ve managed to sock away a substantial amount of money, which I expect to begin spending down in another decade or so.

  7. Sarah Kincaid says:

    I have had an HSA for three years now and I do not like it. I don’t abuse the healh system and never have. I have a son that was born with a chronic heart conditon & my deductible is so high that I am in over my head in medical debt. It is so bad that when I am sick I cannot afford to go the doctor because I am dead broke from paying medical bills that I am borrowing medicine from other people. Yea HSA such a great thing! Right, not for people like me who struggle to pay their bills. I am an average person with an average income, no luxuries except for the internet. I just happen to have a sick son. All the HSA has done for me is to put me in debt.