Health Savings Accounts: Will They Impact Markets?

National Tax Journal, 60:3, pp. 455 - 467, 2007

14 Pages Posted: 24 Mar 2020

Date Written: September 15, 2007


Recently, the federal government began redirecting health care tax subsidies towards tax–exempt Health Savings Accounts (HSA). This tax program requires selection of high–deductible policies—shifting government tax subsidies away from the premium (pure insurance) component and towards the out–of–pocket (self–insurance) component of health insurance contracts. We analyze price sensitivity and relative risk burden effects from this policy change. Regarding risk burden allocations, we show HSA–eligible contracts can redistribute substantial health risk onto households. HSAs may reduce the moral hazard associated with traditional health insurance contracts but may increase adverse selection problems. Overall we find that HSAs are limited in their ability to effect heath care spending.

Keywords: Tax Policy, Health Savings

JEL Classification: H2, H51, I11

Suggested Citation

Richardson, David P. and Seligman, Jason, Health Savings Accounts: Will They Impact Markets? (September 15, 2007). National Tax Journal, 60:3, pp. 455 - 467, 2007, Available at SSRN:

David P. Richardson (Contact Author)

TIAA Institute ( email )

8500 Andrew Carnegie Blvd
Charlotte, NC 28262
United States

HOME PAGE: http://

Jason Seligman

The Investment Company Institute ( email )

1401 H Street, NW
Washington, DC 20005
United States
2023265866 (Phone)
20005 (Fax)

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