Health Savings Accounts Favor High Income Consumers: GAO Report

Sen. John McCain’s plan to reform America’s health care system by expanding Health Savings Accounts took a hit last week when the General Office of Accountability, an investigative arm of Congress, showed that HSAs benefit high income tax payers more than the Average Joe.

It’s the second study released in less than a month that suggests high deductible plans aren’t the affordable health care option that many proponents claim. The Kaiser Foundation released a report last month that said many uninsured families with HSAs may not have the means to pay the high deductibles associated with the plan, (“High HSA Deductibles Could Lead to Medical Bad Debt: Kaiser Study,” April 21).
 
According to the GAO report, the average adjusted gross income of tax filers reporting HSA activity was about $139,000 compared with about $57,000 for all other filers. The GAO said the income differences existed across all age groups. Among filers reporting HSA activity, the average annual value of contributions was $2,100, compared with the average annual withdrawal of $1,000. The GAO report said average contributions and withdrawals generally increased with income and age.

“HSA’s clearly are attractive to higher-income people who are looking for tax shelters,” Rep. Henry Waxman of California told The Wall Street Journal. “But they aren’t the answer for providing adequate health insurance coverage for the average American.”  Waxman also serves as the chairman of the Committee on Oversight and Government Reform.