Health savings accounts - a good idea that doesn't fix the problem.

I just listened to a conversation about repealing Obamacare and replacing it with something better. One suggestion was health savings accounts as though somehow having a saving account would actually do something about the cost of health care. Of course it will not have ANY EFFECT on medical cost. NONE.

Health care savings accounts have been around for some time as a way of allowing people who are able to save to set aside money in a tax advantaged account to deal with uninsured health care cost. If you have money you can save and are disciplined at saving such accounts allow you to reduce your health care cost by your marginal tax rate at the time the money is deposited and at the time it is used for a medical expense. That's all they do. Period.

As it happens, we have a health savings account and my wife needs some dental work done that is not fully insured. Of course we will use the health savings account to help pay for the work. But here's the thing, how we pay for the dental work has no impact whatever on the cost of the work. None whatsoever.  Health savings accounts have absolutely no impact on the cost of medical care.

The skyrocketing cost of health care and insurance is a real problem. Health savings accounts are simply not a solution. Perhaps as a country we might want to consider approaches that actually address the cost of medical care and insurance. Just a thought.