Yearly health care spending in the United States is now over $3 trillion and represents more than 17% of the country’s gross domestic product. These figures are projected to increase substantially over the next decade, but such growth is unsustainable and would hamstring economic progress in the country. The traditional justification for the higher health care costs in the United States is that Americans receive superior care and are healthier. However, data shows that despite higher medical costs and greater public and private spending than in other countries, the United States has inferior population health and access to care. A key cause for these deficiencies is the preferential treatment in the Internal Revenue Code given to employer-sponsored insurance. This results in a distorted market economy that promotes hyper-consumption and gratuitous medical coverage because consumers are unaware of actual health care costs at the point-of-service. A shift to a consumer-driven health system would ameliorate many of these inefficiencies. Health savings accounts, in particular, are the ideal vehicle for such a transition because they preserve the tax benefits employees receive under the current employer-sponsored insurance model while also promoting rational and conscientious use of health care by consumers. Studies have substantiated this position, demonstrating that a shift to a health savings account system would save the United States as much as 400 billion dollars a year in health care spending. In order to begin the process of a sustained reformation of health care, however, health savings accounts must be implemented on a larger scale across the United States. Two legislative changes are required to achieve this: First, the scope of health savings accounts should be expanded and their current statutory restraints removed. Second, health savings accounts should become compulsory for all Americans and lawful residents.

Keep Reading Mandatory Health Savings Accounts and the Need for Consumer-Driven Health Care