Great point by Kate, asking whether we should have skin in the game at all:
Underlying all these arguments needs to be the recognition that, for the most part, individuals don't choose their health status. They get a terrible illness, have a costly genetic defect, are hit by drunk drivers. Conversely, we choose how fancy a car, how big a house we will buy. When it comes to health decisions, the amount we're able to choose, regardless of whether that's in a libertarian Utopian way (between prices for procedures) or whether we get procedures at all, is quite limited. Theoretically we could choose not to have cancer treatment, or not to have pacemakers, but no one should have to make that choice.
I've sort of made this point before, but HSA's stem from a bit of mathematical confusion. They're aimed at holding down costs, but since they're paired with catastrophic care, they only do so for moderate levels of spending. Since health care is suffering from the expenses incurred by individuals requiring massive levels of spending, it's not that useful to attack the cheap middle. But conservatives do it nonetheless.
The reason is that humans tend to think in terms of bell curve distributions, making policy to benefit the massive middle. But certain problems, health care being one of them, work off of hockey stick distributions, with all the action at a single end. As you've all heard before, health spending roughly follows the 80/20 rule: 80 percent of the spending comes from 20 percent of the patients. HSA's attempt to address a health sector with a 20/80 distribution -- and that simply doesn't exist. HSA's, then, are addressing a problem they don't understand by rejiggering incentives for those not at fault. And just like any unnecessary treatment, they'll only make things worse.
