Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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SECTION THREE: Classical Health Savings Accounts: Many Surprises
One of the originators of Health Savings Accounts describes their advantages over existing health insurance. Improvements are suggested for the regular HSA. More dramatic cost improvement emerges from a lifetime HSA version, substituting whole-life approaches for pay-as-you-go. Most of this requires legislation, but could reduce health costs dramatically.

Health Savings Accounts: Classical Model
New topic 2015-09-03 22:42:59 description

Eligible Health Expenses

Back when Health Savings Accounts were started, just about anything you could buy in a drugstore was a healthcare expense. However, if you go into a drugstore today, especially a chain drugstore, you can buy ice cream cones, cosmetics, shaving equipment and so many other things, you have a little trouble finding the pharmacist. Therefore, a debit card receipt from a purchase of a drugstore item will cover many more things than the Health Savings Account originally contemplated.

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Eligible-item Debit Cards {bottom quote}

Evidently, a number of people exploited this loophole, and it isn't surprising the regulators responded with regulations. The drugstores could have responded by making debit cards only apply to eligible items, but many didn't. So now you need a prescription from a doctor for the item, and you are subject to a 20% fine if you use the accounts for a non-eligible service. Some congressman could devise a system which would serve the purpose without the red tape, and Congress might get rid of this nuisance on behalf of the (now) 14 million subscribers to HSA, and the already beleaguered clerks in the drugstores. Next thing you know, the medical supply stores will start selling ice cream cones, followed by more regulations to prevent such evasions. That's of course the problem with depending on the stores to give up the illicit sales, in preference to giving up the red tape.

Several websites have started broadcasting lists of eligible items, hoping you will buy such items from them over the Internet, and eventually competition will sort this out. Meanwhile, we have to advise you to check the websites before you shop.


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