Disadvantages of Health Savings Accounts

Posted in Health Insurance , Health Savings Account

February 24th, 2009

As everyone knows, health care in the United States is an extremely problematic situation. It’s incredibly costly – far costlier than it is in other countries – and many people with what they thought was good health care found themselves sick, and then bankrupt on top of it.

In recent years a law was enacted by Congress to create what are known as Health Savings Accounts, commonly referred to as HSAs for short. The goal of health savings accounts is to get the consumer more invested in his or her health care, and make health care more of a consumer-driven business.

Health savings accounts are for people who are enrolled in what are called high-deductible health plans (HDHPs). High-deductible health plans will cover lots of medical care costs should their members need to use them, but as their name implies, they have high deductibles, and a high deductible can leave a person with an enormous bill that can bankrupt them. Health savings accounts were created to help people afford their deductibles.

A Passing Trend?

Health savings accounts are such a new phenomenon that it’s not clear how they are impacting American health care as a whole. On an individual level, one of the disadvantages of a health savings account, according to those who have them, is that since they are linked to the stock market, their value can plummet – and if you get sick and need your health savings account when the market is sick itself, then you can find yourself without the money you need to pay off your deductible.

Health savings accounts aren’t for everyone. If you’re thinking of getting an HSA but you’re not sure about its advantages and disadvantages, then be sure to speak with a financial adviser about it, as well as a health care professional whose advice and opinions you trust. A health savings account could be just what the doctor ordered – or not.