Health Savings Accounts: Financial Elixir?

Opiela, Nancy
June 2005
Journal of Financial Planning;Jun2005, Vol. 18 Issue 6, p38
Academic Journal
The article provides information on health savings accounts in the U.S. According to the Employee Benefit Research Institute, health care spending totaled $73 billion in 1970, rising to $1.3 trillion in 2000. And while spending on health care accounted for 7 percent of the nation's gross domestic product in 1970, it accounted for 13.2 percent of GDP in 2000 and is projected to reach 17 percent by 2011. Today, the rising cost of employment-based health benefits is prompting some employers to take a more consumer-driven approach with their health insurance, primarily by adding health savings accounts (HSAs) to their traditional health insurance options. Planners stress that it's important to remember that, like 529 college savings plans, HSAs are complex investment vehicles wrapped in fees and, because of differences in deductibles, difficult to compare. In the meantime, in the absence of an organized educational effort, planners say there is a great deal of confusion with newly created HSAs. Common misunderstandings underscore how different an approach an HSA takes with health care. Whether or not an HSA is right for individual clients, planners agree that the conversations sparked by all the recent publicity will have a positive impact on how clients think about health care costs. INSET: Health Saving Accounts: The Basics.


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