Are HSAs Good?

There have been many articles written about the growth of Health Saving Account compatible health plans and their value to consumers.

I have many clients that have found these plans valuable. The reason, in many cases they are cost effective for the purchaser of the plan and can provide a tax shelter for medical expenses.

One thing that is often not mention when discussing the benefits of the HSA compatible plan is that since the policyholder has a high deductible and has to pay the first dollar expenses, you can create a more informed consumer.

The articles state three things often happen when using a HSA compatible plan: the communication between the doctor and patient increases resulting in less unnecessary tests, the consumer brings to understand the true cost of medical services, and consumers will often shop for services.

One of the problems with our medical system today is that the patient normally does not understand the costs of services and therefore uses the most expensive service available. For example, when I was a baby, if a baby starts crying, parents first though was that the baby was teething and would rub a little whiskey on their gums, this would often solve the problem. Today, we have trained the parents to run down to the ER. So instead of a solution that costs a few cents, we use the most expenses door in the healthcare system and the cost is hundreds of dollars.

So if HSA compatible plans can make us smarter consumers, then we should promote them and the concept of understanding the true cost of services. If we all spent the time to learn more how to reduce the cost of services, then cost health insurance will also go down.