Question

The Consumer Directed Health Plan especially the Health Savings Account (HSA) product is

              gaining popularity among purchasers of health care and managed care companies. Describe

             the HSA its origins, structure and key features. What are the advantages or disadvantages

            of the HSA. Take a position on this issue and explain your view.

Answer 1

Health saving account is a medical saving account available to the tax payers in united states who are enrolled in a high deductible health plan . It is a tax advantaged medical saving account . It was established as part of Medicare Prescription Drug , Improvement and Modernization Act ,signed into law by President George W. Bush on December 8, 2003 .

# Advantages of health saving account are :-

- reduced premium for base plan

- creates consumerism among insured people to reduce un- needed expenses .

- allows majority of employees with annual medical expenses to save premiums

- preventive care covered at 100% prior to deductible.

- insurance trends expected to be less over time

- used by higher payed employees as tax saving vehicle.

# Disadvantages of health saving account are :-

- increased exposure to the employees

- no risk dividend to the employers when employees do not use the funds and rollover to next year .

- family deductible is different than with what many insured are currently familiar.

- increased paperwork and tracking of progress toward deductible.

- treatment coverage is subject to the same deductible .

My view against this saving account is that as it is only available to those who are highly paid . This is injustice and it should be available to all the population irrespective of the income afterall health and treatment is one of the human rights .