AboutMichael Feinberg, ChFC Expertise I am the Executive Director of Synergy Financial Services, concentrating in
life insurance, long term care insurance, and long-term and tax-advantaged
investing. I am licensed for Life, Health, and Securities. I am always happy to answer any questions you may have on any of these
topics.
Question Sorry if my question was unclear. A talk show discussion included positive statements about Health Savings Accounts and also statements about health insurance being a cause of high health care costs. The example given was that the costs of cosmetic and lasik surgery has come down because there is no insurance involved, whereas major medical expenses (involving health insurance) have gone up What I'm asking about Health Savings Accounts (which sounds to me similar to a personal savings account) is how would HSAs help someone when it comes to paying for major surgery or major care, as opposed to something minor like lasik.
Answer I do understand the question better now, thank you for restating.
As an individual, health savings accounts simply provide for a tax-advantaged way to self-insure and save for out-of-pocket medical expenses while keeping health insurance costs to that individual lower (through high deductible "catastrophic" plans that only pick up after the initial deductible is met).
It's still generally the individuals' money that is going towards these medical expenses though (unless they receive a HSA contribution from their employer). Typically there are limitations to the amount of money that can be contributed to an HSA, though... so I'm not sure how an HSA would help for "major" surgeries (for instance, $10-20k, etc) since the HSA would be maxed out and then the high-deductible health plan should kick in.
I agree that there is a "competitive" nature to costs for noncovered medical procedures (such as LASIK) and that is natural given the marketplace, and I would also agree that with health insurance, costs do inflate unnecessarily for medical services. As for how HSA's affect all of this, there are truly opposing views. I'll leave you with something from Wikipedia:
"Proponents of HSAs believe that they are an important reform that will help reduce the growth of health care costs and increase the efficiency of the health care system. According to proponents, HSAs encourage saving for future health care expenses, allow the patient to receive needed care without a gate keeper to determine what benefits are allowed and make consumers more responsible for their own health care choices through the required High-Deductible Health Plan.
Opponents of HSAs say they worsen, rather than improve, the U.S. health system's problems because people who are healthy will leave insurance plans while people who have health problems will avoid HSAs. There is also debate about consumer satisfaction with these plans."
