Senate Republican Policy Committee Releases Policy Paper: 'Health Savings Accounts: Defying Critics' Dire Expectations'
To: National Desk
Contact: Mary Sutcliffe of the Senate Republican Policy Committee, 202-224-2946
WASHINGTON, May 5 /U.S. Newswire/ -- Following is an executive summary of a Senate Republican Policy Committee paper titled "Health Savings Accounts: Defying Critics' Dire Expectations," released May 5:
Executive Summary
-- As the Senate attempts to move to legislation designed to reduce the dramatically increasing cost of quality health care, advocates would do well to remember that one Republican-backed innovation -- health savings accounts -- is already proving its worth in the marketplace.
-- In 2003, Congress created health savings accounts (HSAs) as a means of curbing rising health care costs. HSAs are personal and portable accounts that afford individuals the opportunity to set aside pre-tax dollars as savings toward medical and long-term care expenses not covered by their insurance plans.
-- Critics charged that HSAs would benefit primarily those who are young, well-off, or very healthy; however, the available data show that HSAs are being purchased by individuals with varying incomes, ages and health statuses.
-- In the two years that HSAs have been available for purchase, more than 3.2 million individuals have signed on.
-- Data reveal that nearly one-third of these participants were previously uninsured.
-- Studies show that many are not young: one major individual and small-group insurer has reported that 62 percent of its HSA- eligible plan purchasers were over the age of 40, while another insurer's web-based survey indicated that the largest group of HSA purchasers were in the 45 to 54 age range.
-- Many are not well-off: nearly 45 percent of HSA purchasers from one online health insurance broker earned less than $50,000 per year. Another insurer reported that 20 percent of its HSA purchasers earned less than $40,000 per year.
-- Many are not in excellent health: a survey conducted in 2005 reveals that nearly as many HSA purchasers rated their health condition to be merely "fair" as did those who rated their health as "excellent."
-- HSA participants are discovering what proponents have long asserted -- that ownership and portability of HSAs are two characteristics that set this health insurance option apart from traditional insurance plans. No longer will employers and insurance companies be in charge of making health care decisions -- with an HSA, control of one's health care lies with the individual.
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Copies of this paper are available at http://www.rpc.senate.gov. This site offers an up-to-date publication archive, as well as links to current RPC products.
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