Carefully read Ezra Klein's piece on why Health Savings Accounts (HSAs) won't slow the growth of health care spending. Long story short: 5% of the population consumes 50% of the health care. To significantly cut costs, you've got to restrain these big spenders. But...
HSAs have a spending cap, and once it's broken, all care is covered. They do nothing but disincentivize basic care, which doesn't cost much anyway.
Still confused? People with HSAs normally have castrophic coverage for sums over, say, $10k/year. But if the sums below $10k/year don't add up to much, and sums over $10k/year remain fully covered, how would this give noticeably better incentives than the status quo? Ezra concludes that the percentage reduction in health care spending from HSA-type incentives is bound to be miniscule.
Clever, but not so fast. Imagine we had a government program that provided unlimited free travel to China. It's quite likely that 5% of Americans would consume 50% of the free travel to China. Most Americans would go there once, complain that they can't read the signs, and never return. But a few of us would go every chance we got.
Now a reformer comes along and says: Let's make people pay for the first $10k worth of Chinese travel, and only have the government pay for amounts in excess of $10k. Does that fact that 5% of travellers consume 50% of the travel dollars imply that this reform won't matter?
Of course not. There are plenty of people who, say, consume $20k for free, who would consume less than $10k if they had to pay for 100% of the first $10k. There might even be people who would consume $100k of free travel per year in China, who wouldn't actually spring for the first $10k themselves.
But is "catastrophic" health care spending in any way comparable to free travel to China? A lot of it is. For example, my grandpa got $300k of elective surgery in his last year of life - bad knee, plus complications. And he was a cheap, cheap man. I doubt that he would have paid for the first $10k out of his own pocket.
So I don't think that Ezra had dealt a mortal or even a painful blow to HSAs. But I would like to thank him for giving me an instructive example to use the next time I teach intermediate micro!