Stark/ Waxman & the GAO

House Oversight and Government Reform Committee Chairman Henry Waxman (D-CA) and House Ways & Means Health Subcommittee Chairman Pete Stark (D-CA) chose to release a report they requested from the General Accountability Office on the same day as the AHIP survey was released, even though the report was delivered to the Chairmen on April 1.  The Chairmen's press release, seeking to throw cold water on the otherwise solid numbers from AHIP, says the report shows that HSAs are used more often as a tax shelter by wealthy individuals rather than as a mechanism to help working families obtain needed health care.The Chairmen base their conclusion on two findings from the report:

• The average adjusted gross income was about $139,000 for Health Savings Accounts enrollees compared to $57,000 for all other filers in 2005.
• The total value of all Health Savings Accounts contributions reported to the IRS in 2005 was about twice that of withdrawals — $754 million compared to $366 million – suggesting an interest in it more as a shelter than vehicle to obtain needed health care or supplement inadequate coverage.

Astute observers know that 2005 was only the second year of the HSA program.  According to the AHIP survey for that year, only 1 million Americans were even covered by HSAs, more than half of which were covered by HSAs in the individual (non-group) market.  And yes it is quite possible that the better educated people buying policies on their own, likely better-educated, self-employed people like lawyers and accountants, were the first ones to understand the opportunity HSAs present.

Still, GAO does not present a strong case for HSAs being "tax shelters for wealthy Americans."  For example, the average contribution to an HSA in 2005 was an average of $2,800 for taxpayers with income above $100,000 vs. $1,400 for those with income of under $30,000.  But the average taxpayer with an HSA also made withdrawals — $1,300 for those with income above $100,000 vs. $600 for those with income below $30,000.  So the net-net is that taxpayers with HSAs with income above $100,000 "sheltered" $1,500 vs. $800 for those with income below $30,000. 

Actually, it's surprising that the Chairmen didn't also say that HSAs are a tax shelter for the elderly.  The GAO report says that average contributions for those age 55-64 was almost $3,000 vs. $1,400 for those age 19-34.  Furthermore, withdrawals for those age 55-64 only averaged $1,200 vs. $550 for those age 19-34.  But then again, advocates of "Medicare-for-all" (like Waxman and Stark) wouldn't want anyone about to enroll in Medicare to know about that.

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