Washington Examiner | Political News and Conservative Analysis About Congress, the President, and the Federal Government
Remarkably, the plan would effectively eliminate one of the most powerful tools for constraining health spending and saving patients money — health savings accounts, or HSAs.
That’s backward. HSAs give patients more control over their healthcare dollars and expose our health sector to the market forces it sorely needs. Policymakers should be putting them within reach of more of the public — not plotting their demise.
HSAs let patients set aside tax-advantaged money for future medical expenses. Unused dollars remain the patient’s property and roll over from year to year.
That gives account holders an incentive to consider costs and shop around when they can. And there’s evidence that HSAs can reduce healthcare spending. One study of more than 76,000 people at 709 employers found that HSA enrollees spent roughly 5% to 7% less on healthcare than people who remained in traditional health plans.
To contribute to an HSA, an account holder generally must have a qualifying high-deductible health plan. The Georgetown proposal would effectively do away with such plans by capping annual deductibles at $1,000 for individuals and $2,000 for families. The authors explicitly acknowledge that the change would “sunset” HSAs.
Lower deductibles don’t make the underlying cost of healthcare disappear. They require insurers to pay more of the bill — costs that are ultimately reflected in higher premiums. That’s the basic trade-off in health insurance. Plans with lower deductibles generally charge higher monthly premiums.
Congress has moved in the opposite direction of the Georgetown study authors by making all Bronze and catastrophic plans sold on the Obamacare exchanges HSA-compatible.
Policymakers could build on that approach by making it easier for employers to contribute to workers’ HSAs and providing targeted help to lower-income households with less money to save. That would give more families healthcare dollars of their own to manage while preserving access to lower-premium coverage.
HSA-compatible coverage could also work better for patients with chronic conditions. Federal rules allow qualifying plans to cover certain high-value treatments before patients meet their deductibles. Expanding that flexibility would make HSA-compatible plans useful to more people.
If the Georgetown authors want to make healthcare more affordable, phasing out HSAs is the wrong approach. Give more Americans the ability to save tax-free for healthcare, preserve access to lower-premium coverage, and let patients keep the savings when they spend their healthcare dollars wisely.
Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy—and How to Keep It (Encounter 2025). Follow her on X @sallypipes.
