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Monday, September 18th 2006

Tax Credits & Subsidies

How can HSAs work? Well, only if the government throws tax credits and subsidies at “low” income family (and that’ll have to be a generous definition of low income).

While HSAs may have some benefits in terms of increasing consumer awareness of costs, for two rather obvious reasons, HSAs will not help reduce the number of uninsured in the US.

[W]hile HSA plans may be less expensive than comprehensive plans, they are still beyond the reach of most in the lower-income brackets.

The second reason (not that you need another one after figuring out that HSA plans are just too costly for most of the people currently without health insurance) lies in their favorable tax treatment.

That’s wonderful, but only if you actually pay taxes. Turns out that over half of the uninsured (55% to be precise) pay no taxes. Another 16% are in the 10% bracket, and 23% more hit the 15% level.

CDHP can be part of improving healthcare access. Its important for other reasons as well, since I get riled up over the fact that quality information (yes, P4P can work!) and reimbursement info (corporate secrets my ass) are not publicly available.