Health Savings Accounts

Introduction

A health savings account is an individual medical savings account that is tax-advantaged and is available to taxpayers. It is more like a personal savings account but the money saved in them is used to pay for expenses in healthcare. This health account is available to the members who register for a high deductible health plan. A health savings account is beneficial because its interest and withdrawals are tax-free, and the funds that are not used are carried over yearly.

Health care plan accounts have captivated a lot of attention from employers, individuals, and lawmakers because they are perceived to minimize healthcare prices. In the health insurance market that is sponsored by the employer, the health savings accounts have grown remarkably. The contributions to the health savings account earn interest and belong to the individual (Lo Sasso, Shah & Frogner 2010). Even after workers leave their job, the contributions remain their possession. Research shows that individuals who have enrolled for the health savings account have initial lower spending in health and are healthier compared to those that have not enrolled in the account. The enrolled individuals who were found to less likely have a chronic condition could report their health as excellent. This means that a healthcare savings account is a good idea for healthcare because of the less spending in healthcare and even in the pharmacy.

According to the United States, United States. Congress. Senate. Special Committee on Aging (2004), health care savings account gives better patient control and the choices of using health services. They support the patient-doctor relationship and very affordable medical costs. The development of health savings accounts is a trend geared towards consumer-directed health which gives patients a bigger control of making decisions regarding healthcare. It also enables consumers to clearly understand the healthcare costs. These accounts enhance the doctor-patient relationship because the high-deductible health insurance minimizes treatment decisions from outside and provides doctors and patients incentives to keep away from excessive spending. The cost incentive minimizes the need for controlled care regulations that limit the accessibility of care. This enables the consumer to be flexible in choosing the kind of care they prefer. For uninsured people, the healthcare savings account plays a significant role. Health savings accounts are less expensive compared to other insurance plans despite their medical expenditure. As a consumer, health savings accounts expand the options of healthcare.

In many economies, healthcare costs are a major problem and health savings accounts have been viewed as a good way to reduce healthcare costs. The tax advantage that is put for the health saving accounts expands the group health insurance market by making healthcare more affordable (Ye 2015). Health savings accounts enable individuals to save money and get a valuable health insurance plan. They improve the effectiveness of insurance, increase the choices of the customers, and reduce health expenses.

Conclusion

Health savings accounts have very many benefits in terms of quality healthcare. These accounts enable a patient to get access to affordable healthcare. The contributions that are made towards the savings account belong to an individual even when they decide to stop working. The contributions are not taxed when withdrawing. The customer can have the opportunity to make their own choices and preferences because they are no controlled care rules in the health savings accounts, therefore, expanding the options as a healthcare consumer.

References

Lo Sasso, A. T., Shah, M., & Frogner, B. K. (2010). Health savings accounts and health care

spending. Health services research, 45(4), 1041–1060. https://doi.org/10.1111/j.1475-

6773.2010.01124.x