Health Savings Accounts, High Deductible Policies, and the Uninsured: Simulating the Effects of HSA Tax Policy

The researchers explored how Health Savings Accounts (HSA) and various tax-based health insurance proposals impact the uninsured population. They also simulated how tax deduction and credit policies for non-group insurance affect the employment-based group market. Through an innovative approach, the model considered employer choice and individual preferences in the face of the risk of uncertain medical expenditures. The behavior of three important consumer groups was examined: (1) the currently uninsured who do not have access to group coverage; (2) the currently uninsured who have access to group coverage but choose to be uninsured; and (3) the currently insured group in group coverage. The researchers modeled a variety of policy changes and assessed the value to each consumer group and the likelihood of changing from the status quo. The objective of this project was to inform policymakers about the impact of HSAs and various tax-based health insurance proposals on the uninsured and group market.