The Macroeconomics of Health Savings Accounts

Juergen Jung and Chung Tran

No 2007-023, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: We analyze whether a consumer driven health care plan like the newly established Health Savings Accounts (HSAs) can reduce health care expenditures in the United States and increase the fraction of the population with health insurance. Unlike previous literature, our analysis relies on a dynamic general equilibrium framework with heterogenous agents. We endogenize health care expenditure and insurance choice, so that the model fully accounts for feedback effects from both factor markets and insurance markets. We then highlight the importance of including general equilibrium effects into the policy analysis. Specifically, our results from numerical simulations indicate that the success of HSAs depends critically on the productivity of health and the annual contribution limit to HSAs. In addition, we find that taxpayers can face substantial costs when HSAs are introduced to insure more people and to curb aggregate health expenditures.

Keywords: Health Savings Accounts; Consumer Driven Health Care Plans; Health Insurance; Privatization of Health Care; General Equilibrium Health Uncertainty Model; Numerical Simulation of Health Care Reform (search for similar items in EconPapers)
JEL-codes: H51 I18 I38 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2008-04
New Economics Papers: this item is included in nep-cmp, nep-dge, nep-hea, nep-ias and nep-mac
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Citations: View citations in EconPapers (21)

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Working Paper: The Macroeconomics of Health Savings Accounts (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:inu:caeprp:2007023

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