Say what?

I found this kind of puzzling, an article in the LA Times describing how the insurance commissioner for the state of California criticizes health care savings plans and some insurance plans. He even apparently called such savings accounts as part of the problem with rising health care costs. I, for one, am puzzled on exactly how health care spending accounts would make health care more expensive. For those of you not familiar with such plans (I have been a participant of one for the past year and a half), in a typical health care savings account it works like this: A certain amount or percentage of each paycheck is witheld by your employer to be put in a health care savings account, the money is often deducted pre-tax (reducing your taxes a tiny bit) and then you submit a receipt for health care costs incurred and you are reimbursed from that account up to what you contributed for that year. Even things like OTC medicine are covered in such an account. Such an account may make it possible to pick an insurance plan with a higher deductible (with lower premiums) since you can set your annual contributions to your health care plan equal to or close to your deductible. Many plans include a co-pay for office visits, so the higher deductible does not always apply anyway, in those cases the deductible may only apply for more expensive treatments.

As far as I can tell, the only drawback of a health care spending account is that if you have no eligible health care expenses to be reimbursed for, you lose the money at the end of the plan year. But most people are going to go to the dentist at least twice a year, and to the doctor at least a couple of times a year, as well as buying things like Tylenol, Advil or cold medicine. All of those are eligible for reimbursement from a health care savings account.

You can read the article at the link below, but its kind of scary that the insurance commissioner of a state with rapidly rising health care costs takes such a view of a plan that can reduce health care costs.

http://www.latimes.com/business/la-fi-insure3aug03,0,4020693.story?coll=la-home-business