Recently issued Treasury Department rules on tax-free health savings accounts are stirring up debate over this new form of health insurance coverage.
HSAs, which go into effect Jan. 1, can be set up by an employer or individual who is covered by a high-deductible health plan, and unspent funds at the end of the year can be rolled over into the next year, the department says in a release from Monday.
To qualify, individuals must have a plan with a deductible of at least a $1,000 or already be contributing to a medical savings account, allowed for several years, the department states.
HSAs, part of the Medicare reform bill signed by President Bush on Dec. 8, are more flexible and more widely applicable than MSAs, the department says. For example, it says the minimum required deductible for an HSA is lower than for an MSA and, unlike with MSAs, employees of large companies are eligible for HSAs.
"We want Americans to be able to take advantage of HSAs as soon as possible," says Treasury Secretary John Snow in the release. "HSAs will help consumers have more choice in meeting their health care needs."
An editorial in the Wall Street Journal on Tuesday called the new accounts "a revolution in American health care" that "promise a new era of individual choice for health insurance."
But in a statement today, Don McCanne, M.D., a member of Physicians for a National Health Program, asserts that "healthy individuals purchasing the high-deductible plans will find that they do not provide adequate financial protection should they later have major health care needs."
McCanne adds: "The greatest concern is that HSAs will selectively attract those who do not believe that they will have to pay much out of their HSAs. Obviously, it is the healthier individuals, who happen to be the majority, that will be attracted to these plans."