Brian Schwartz on Health Savings Accounts

The August 31, 2007 Denver Post website includes the following eLetter by Brian Schwartz:

Health Savings Accounts

Health Savings Accounts offer fairness and choice to rich and poor. The tax code’s discounting employer-based insurance is unfair. It ties us to our employer’s expensive non-portable policies and hence limits insurance companies’ incentive to satisfy patients.

Imagine you want a more economical insurance plan. A less expensive plan could save you $50 per month, which you could save for medical expenses without your insurance company interfering. But since you’ll be taxed on this investment, you’re left with much less. To avoid this penalty, you’ll probably keep the expensive plan, hence wasting money on premiums instead of saving for medical expenses in the future.

Health Savings Accounts are the first step in eliminating this injustice. If a qualified high-deductible insurance plan is best for you, you can invest income saved on premiums in a tax-free HSA - equivalent to a 401(k) plan for medical expenses.

Since the tax code should not discriminate between money spent on health care or health insurance, HSAs should be available to anyone, regardless of their insurance policy. Further, to free us from our tax-preferred employer-based plans, we should be able to buy health insurance with funds from our Health Savings Accounts.

Brian T. Schwartz, Boulder