Health Savings Accounts (HSAs) are a crucial tool for bringing consumerism to health care. An HSA allows an individual or family to put tax-free dollars in a savings account to use for future health care expenditures. Coupled with a high-deductible insurance policy, an HSA encourages individuals and families to consider price and quality when making health care decisions, and discourages over-consumption of health care.

HSAs also compel health care providers to compete for the business of patients. This results in innovation – finding ways to make health care both less expensive and more convenient for the patient.

Today, some 4.5 million Americans receive health coverage through this type of plan. The good news for HSAs keeps rolling in. In December, Congress passed legislation that permits people who have flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), or individual retirement accounts (IRAs) to make a one-time transfer of funds from these accounts into an HSA.

More than a quarter of the people with an HSA were previously uninsured. United Health Group recently released a study that adds to the mounting evidence refuting the shopworn criticism of HSAs as primarily for the “healthy and wealthy.”

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