How HSAs with High Deductibles Can Slash Healthcare Costs

ARTICLE | July 29, 2024

Authored by Vasquez + Company

Research indicates that Health Savings Accounts (HSAs) paired with high-deductible health plans can significantly reduce healthcare spending over time. The article "HSAs with High Deductibles May Save Cost" discusses findings from a major company's data, showing an initial 25% cost reduction per employee in the first year compared to traditional health plans, with continued, albeit slower, savings in subsequent years.

Key Points:

• Initial Savings: First-year costs dropped by 25% per employee with HSAs compared to traditional health plans.
• Long-Term Trends: Savings continued over the next three years but at a slower rate.
• Contribution Limits: For 2024, individual coverage limits are $4,150 and family coverage limits are $8,300.
• High-Deductible Plans: Annual deductibles must be at least $1,600 for self-only coverage and $3,200 for family coverage.
• Spending Categories: Significant reductions in laboratory services and prescription drug costs, with a notable 40% reduction in pharmacy spending for lower-tier spending individuals.

For more details on these findings and how HSAs can benefit employers and employees, read the full article here.

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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