Health Debtor Accounts

Cindy Zeldin
January 30, 2006

Cindy Zeldin is a senior program associate in the Health Policy Program at the New America Foundation.

In tomorrow's State of the Union address, President Bush is widely expected to promote an expansion of Health Savings Accounts, or HSAs, as the new cornerstone of his ownership society agenda. His rhetoric will be about personal empowerment, but his push for insurance that exposes consumers to more individual risk belies the financial squeeze faced by a growing number of middle-class Americans.

Authorized by the 2003 Medicare prescription drug bill, HSAs allow people who purchase a high deductible, or catastrophic, health insurance policy to set aside money in a tax-sheltered account that they can tap for out-of-pocket health expenses. The HSA marketplace has been taking shape over the past two years as insurance companies have teamed up with financial services firms to offer the catastrophic coverage and HSA combination, frequently referred to as “consumer-driven health care.” United Health Group has even started a financial institution, known as Exante, while Blue Cross announced last fall that it planned to open its own bank to handle the accounts.