Health Savings Accounts

Mark Schmitt has the definitive explanation of why HSAs are a bad idea:

What the administration is doing, first with health savings accounts, which are now the law, and then with this [catastrophic insurance] proposal, is to confer enormous tax advantages on a type of insurance that is already advantageous, but only for the relatively wealthy. But the consequence of it would be that, as young and healthy people withdraw from the standard, low-deductible insurance market, premiums in that market would go through the roof, insurers would desperately try to find ways to deny coverage to higher-risk people, and the whole delicate balance would surely collapse.

The problem is very similar to the problem with the recently passed Medicare Drug Benefit that I pointed out in this post and the one just before it. Basically, the only way around the adverse selection problems that plague the various Republican health care proposals is to make the programs mandatory, which I doubt will happen.