Equitable Health Savings Accounts
42 Pages Posted: 26 Nov 2018 Last revised: 10 Jan 2019
Date Written: November 1, 2018
This Article offers the first comprehensive legal critique of existing Health Savings Accounts (HSAs), arguing that current policy is redistributively regressive, thus exacerbating inequality, and also fails to accomplish stated health care goals. We propose an alternative—Equitable Health Savings Accounts—which uses cash grants as a tool to address both of these problems. The Equitable HSA is a market-based social policy that calibrates size and delivery of a government subsidy to help the least well-off and to facilitate development of and participation in healthcare markets. Equitable HSAs can serve as a model for using cash grants to bridge the gap between Republican social policy proposals that generally carry a market libertarian flavor, and Democratic proposals that are focused on redistribution and social safety nets. Contrary to conventional political wisdom and academic commentary on the tradeoff between equity and efficiency, we make the case that in healthcare delivery, these goals need not be mutually exclusive. Rather, as our Equitable HSA proposal demonstrates, cash grants can allow policymakers to harness the benefits of markets while engaging in redistribution.
Keywords: tax, tax policy, health care, health care financing, HSA, health savings account
JEL Classification: H20, H24, H25, H29
Suggested Citation: Suggested Citation