Fifteen percent of Colorado employers offered Health Savings Accounts (HSAs) in 2007, and 23 percent considered offering one, according to a survey conducted by the Mountain States Employers Council (MSEC).
“It’s a good thing!” said Linda Gorman, director of health care policy at the Colorado-based Independence Institute. “The more choice you give people, the better off they are. You have more choice with the HSA because you can spend it on anything the IRS deems a legitimate health expense.”
Patty Goodwin, overseer of the MSEC study published in February, said she knew of no similar national survey. However, she said she thought Colorado was probably on par with the rest of the nation in HSA offerings.
Lack of Familiarity
One of the biggest challenges HSA advocates face is simply convincing people to explore a less-familiar way of managing health coverage, said Goodwin.
Though many employers offer both HSAs and traditional health insurance, she explained employers and employees have a general lack of understanding about them. This causes employees to cling to their traditional plan even if they could benefit from a health savings account.
“[HSA] adoption rates have usually been dependent on how well the employer educates people to the plan,” said Gorman, though even well-informed employees struggle with deciding whether an HSA works best for them.
The tradeoff, Gorman explained, is that the lower cost of an HSA comes with a higher deductible. Consequently, “people are taking baby steps into health savings accounts.”
Because the money paying for medical care comes out of a bank account instead of an insurance company’s checkbook, people must decide for themselves whether an illness merits a trip to the doctor or whether they’d be better off waiting it out, Goodwin noted. As an alternative, some HSA owners explore preventive medicine and focus on wellness instead of treating sickness as it happens.
Proponents of health savings accounts maintain HSAs offer a good option overall for consumers who want more control of their medical coverage.
“Here’s another way that maybe we can help curb health care costs while giving consumers more choice,” said Goodwin.
Jillian Melchior ([email protected]) writes from Michigan.