Health Savings Account

8 Health Care Glossary Items #4

To many a conservative, Health Savings Accounts (HSAs) are a panacea to reducing the cost of health care in the US. They believe that the injection of the free market into health care will bring prices down. How do HSAs work?

Well, HSAs are only available to those who forgo a traditional health insurance plan. Instead, a person would purchase a high-deductible policy that covers catastrophic expenses only. They would then be able to deposit money into their account tax free to use for all medical expenses not paid by the catastrophic policy. Whatever money isn't used would remain in the account year after year. After retirement, the individual can withdraw the money or even will it to a family member.

The problem with HSAs is that they are only feasible for those select few who can afford them. Most Americans cannot afford to pay even the most basic of medical bills out of pocket. As an idea for an entire health care system, they are simply dead on arrival.