Jefferson Review

"Your Liberty is Our Interest"

Home /  Archives / Links / Quotes / Book Reviews / Advertise /Contact us / Subscribe / Calendar

HSAs provide healthy alternatives

From the Bluegrass Institute

Health Savings Accounts (HSAs) are becoming more popular and offer Kentucky lawmakers a useful alternative when considering health-care plans for state workers.

An HSA policy combines a Health Savings Account with a “high deductible” health insurance plan. While the insurance plan exists to cover the cost of catastrophic medical needs, the savings account itself – used for low-cost expenses – is the unique part of the HSA program.

The savings account feature allows individuals to save money, earn interest and withdraw these funds when needed – all free of taxation. They are the first tax-free savings accounts in American history. Employers also can contribute tax-deductible funds into their employees’ HSA.

An increasing number of companies are implementing HSA plans in an attempt to address the high cost of employee health-care plans.

A recent assessment by America’s Health Insurance Plans (AHIP) shows that the number of people covered by HSAs and HDHP (High Deductible Health Plans) more than doubled between September 2004 and March 2005. A survey conducted by Watson Wyatt and the National Business Group on Health indicates that 8 percent of 555 large employers now offer HSA plans and 18 percent plan on doing so in 2006.

State government, which obviously is one of Kentucky’s largest employers, should move in this direction. Its bloated health-care system for government workers is costing taxpayers dearly.

During a special session in October, politicians in Frankfort poured nearly $200 million in additional taxpayer dollars over the previous year’s budget appropriation into a health-insurance concession for state workers. This spending brought the one-year total cost of the employee health-insurance program to $700 million – a 40-percent increase in a single year.

Kentucky’s taxpayers cannot continue to withstand such increases in future years. Real reform is needed – the kind that comes with introducing the free-market principles found in HSA plans.

Sources:

"What's next for HSAs?" by Victoria Craig Bunce and Merrill Matthews, The Council for Affordable Health Insurance’s Issues and Answers

"Health Savings Accounts Can Make Employers, Employees and State Governments Feel Better" by Michael T. Bond, The Buckeye Institute for Public Policy Solutions

"Changing the system one HSA at a time" by the Bluegrass Institute for Public Policy Solutions

Weather (Louisville) / Mapquest /  White Pages / Business Search / CNN / Dictionary / E-card / MSN