HSA's: a great way to burden individuals & govt; I mean, consumer driven health care, yeah!

"To summarize, I estimate that the President’s budget proposals will cost almost $12 billion dollars per year if fully phased in. I estimate that these proposals will on net raise the number of uninsured (by 600,000 persons), as those left uninsured through firm dropping of insurance exceed those who gain insurance through taking up tax-subsidized high-deductible plans attached to HSAs." (source: Jonathan Gruber's CBPP/MIT study)

And from the press release of the study:

The analysis, conducted by Jonathan Gruber of M.I.T., projects that while 3.8 million previously uninsured people would gain health coverage through HSAs as a result of the President's proposals, 4.4 million people would become uninsured because their employers would respond to the new tax breaks by dropping coverage and they would not secure coverage on their own. The net effect would be to increase the number of uninsured Americans by 600,000.

"The Administration estimates that its HSA-related tax proposals would cost $156 billion over the next ten years, which would worsen the nation's fiscal problems," Robert Greenstein, the Center on Budget and Policy Priorities' executive director, noted. "Professor Gruber's study raises very serious questions about the wisdom of these proposals."...

These proposals would eliminate all tax advantages for employer-sponsored coverage (as compared to coverage purchased in the individual health insurance market). Those tax advantages were designed to encourage employers to provide insurance to their workers. As a result, some employers -- typically, small business owners -- would respond to the new HSA tax breaks by dropping coverage for their workers or (in the case of new businesses) electing not to offer coverage in the first place...

To estimate the impact of these proposals on health coverage, Professor Gruber employed a micro-simulation model that is very similar to models used by the Congressional Budget Office, the Congressional Joint Committee on Taxation, and the Treasury Department. His findings include:

-- Under the proposed tax breaks, the number of people with individual health coverage would increase by 8.3 million when the proposals were fully in effect. Some 3.8 million of these people would previously have been uninsured; about 4 million of them would have switched from employer-sponsored coverage to individual coverage coupled with an HSA; and 500,000 would previously have received coverage through Medicaid.

-- Some 8.9 million people would lose employer-sponsored coverage as a result of the tax breaks. About half of them -- 4.4 million people -- would become uninsured, while another 4 million would switch to individual coverage coupled with an HSA, and 500,000 would enroll in Medicaid...

Adding to the concerns that Professor Gruber's paper raises, Greenstein said, is the strong probability that the currently uninsured people who would be most likely to gain coverage as a result of the Administration's proposals would be relatively healthy, since they would best be able (with the help of the new tax subsidies) to obtain affordable coverage in the individual market. In contrast, the people most likely to become uninsured would be less-healthy employees in small businesses that dropped coverage, since less-healthy people have the most difficult time obtaining affordable coverage in the individual market.