Health savings accounts gaining as coverage option

The federal government is encouraging the success of HSAs, which some say will save the health care system and others say will hurt it.

By Joel B. Finkelstein, AMNews staff. April 26, 2004.

Washington -- With a nudge from federal regulators, health savings accounts are proving even more attractive than expected. But some experts fear what that might mean for the health care system.

Health savings accounts were added to last year's Medicare reform act and became available as of Jan. 1. Combined with a high-deductible health insurance policy, they create a new option for purchasing health insurance, one that seems to be catching on quickly.

"We've been very pleased with the market response," said Scott Krinke, vice president of Assurant Health, formerly Fortis Health, a national seller of medical savings account and HSA products.

In January, the company received 2,500 applications from new customers wanting to set up health savings accounts, he said. That number has steadily increased, reaching more than 4,000 in March.

Also last month, the Treasury Dept. published rules clarifying that high-deductible health insurance offered with HSAs can include first-dollar coverage for several categories of preventive care, including periodic health examinations, routine prenatal and well-child care, immunizations, tobacco cessation programs, obesity weight-loss programs and screening services.

The rules also allow people who had already bought high-deductible plans that include prescription drug coverage to keep that add-on benefit until Jan. 1, 2006, even though the statute doesn't really allow for the benefit under HSAs.