The Legislature just passed a measure that allows for the sale of high-deductible health insurance plans accompanied by health savings accounts that allow for pretax dollars to be saved to pay for qualified medical expenses.

Unlike flexible spending accounts, the money put into HSAs would not be limited to a yearly maximum of $2,600,  and can be carried over from year to year, accumulating tax-free for the duration of the plan.

Proponents included insurance companies who want to offer plans with high deductibles for people who don’t foresee major health events and only want catastrophic coverage. These people are generally low utilizers of health care services, or those for whom the price of insurance is too high even with Affordable Care Act.

City and County EMS ambulance heads down Beretania Street near Chinatown with sirens and lights flashing. 4 june 2015. photograph Cory Lum/Civil Beat

Ambulance service is often only partially covered by insurance, but with health savings accounts the money for such a service could be set aside in advance, tax-free.

Cory Lum/Civil Beat

Detractors argued that this particular type of account is only available to those who are wealthy enough to afford it, and that catastrophic coverage takes healthy people out of the insurance market who would otherwise be helping to subsidize the care of those who were sick. They also argue that most people would not have any extra money to put away for current or future health care expenses.

The possible uses for HSAs include long-term care coverage, concierge care premiums, ambulance services and alternative health care.

But why can’t we all have one?

Health savings accounts should be available to everyone, no matter what type of insurance plan they have, whether high deductible, or even the most generous of plans with platinum benefits. No insurance plan covers everything — there are always limits on coverage for various services, and that costs patients money that has been taxed through their regular income.

This type of savings account should be available to everyone, regardless of income or employment.

Deductions on taxes are only available if total expenditures are greater than 10 percent of one’s adjusted gross income on an annual basis. That leaves a lot of care to be paid out of pocket with money that has already been taxed by the government.

Patients who have access to HSAs would have a multitude of benefits, both for current care and future needs.

Most insurance companies offer preventative services for patients through a yearly physical exam. However, many laboratory tests are not covered, and advanced diagnostic testing is not a benefit of most health plans. Genetic testing is also not covered for most people on a screening basis.

Preventative testing such as body scanning, either with CT scans or with MRIs, could be paid for with HSA funds. Although not medically necessary for most people, these tests and other screening are cost prohibitive except for the wealthiest of people.

Ambulance services, which are often covered by insurance on a limited basis, could be another use for HSA dollars.

Alternative care with naturopaths, acupuncturists and massage therapists are all benefits that are not available on all insurance plans but could be paid for through a pre-tax savings account.

Of course, some of these are already reimbursable through a flexible benefit plan, but with the annual amount capped at $2,600, these additional treatments can add up to much more than that.

Medical equipment such as portable electric wheelchairs, scooters and assist devices that are covered only after patients meet certain medical disability requirements could also be offered with less restrictive criteria.

Handicapped cars and vans could be purchased using pre-tax dollars, saving thousands. Fertility treatments, currently only covered for one cycle, could be paid for with a HSA, and the opportunities for those who may not have any coverage, such as same-sex couples, could also be less cost-prohibitive.

Cosmetic surgery could also become a qualifying medical use of HSA dollars. Not all plastic surgery procedures are for beauty alone, and even with medical conditions that justify insurance coverage, not all patients meet the strict criteria until their symptoms reach a level of severity that can leave them suffering for years.

Future uses of HSA dollars are also an untapped resource. With the ever-increasing costs of long-term care, those who need assistance but do not have insurance for these costs can also have their care at a lesser cost, using these pre-tax dollars. The account accumulates yearly, and with the average care in a nursing home costing almost $100,000, it only makes sense to allow people to start saving early for this expense when they get older.

After all, odds are that the majority of people over 65 will need some type of care assistance in their lifetime.

Insurance does not pay for home health aides for most people, and anyone who wants to age in place is most likely going to need help, and this comes with a high cost. If HSAs could be self-funded throughout life, then any care at any age could be provided tax-free.

Current rules allow HSAs to be passed down to spouses, another benefit of the plan for families. This could help take the stress away from adult children who find difficulties balancing their own financial needs with that of their elderly parents.

HSAs are a financial invention that should not be restricted to just those with high deductible insurance plans. This type of savings should be available to everyone, regardless of income or employment.

Retirement accounts are an excellent way to save for future spending, but it’s often not enough to cover medical expenses in addition to travel, housing, food, clothing and other costs. Having another option to cover the difference only makes sense.

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