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The Macroeconomics of Health Savings Accounts

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  • Juergen Jung

    ()
    (Department of Economics, Towson University)

  • Chung Tran

    ()
    (Research School of Economics, The Australian National University)

Abstract

We analyze whether the introduction of Health Savings Accounts (HSAs), which is a health insurance reform coupled with a capital tax reform, can reduce health care expenditures in the United States and increase the fraction of the population with health insurance. Unlike previous studies on HSAs, our analysis relies on a general equilibrium framework and therefore fully accounts for feedback effects from general equilibrium price changes. Our results from numerical simulations indicate that the introduction of HSAs increases the percentage of the working age population with health insurance in the long run but fails to control spending on health care. The outcome of a HSAs reform depends critically on the annual contribution limits to HSAs and the interplay of general equilibrium effects. Finally, the long-run tax revenue loss due to the introduction of HSAs is large and can amount to up to 5 percent of GDP.

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File URL: http://www.towson.edu/cbe/economics/workingpapers/2010-12.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by Towson University, Department of Economics in its series Working Papers with number 2010-12.

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Length: 43 pages
Date of creation: Jun 2010
Date of revision: May 2011
Handle: RePEc:tow:wpaper:2010-12

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Postal: Towson, Maryland 21252-0001
Phone: 410-704-2959
Fax: 410-704-3424
Web page: http://www.towson.edu/cbe/economics/
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Keywords: Health saving accounts; health care reform; privatization of health care systems; health insurance; stochastic dynamic general equilibrium model with health.;

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References

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Citations

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Cited by:
  1. Halliday, Timothy J. & He, Hui & Zhang, Hao, 2009. "Health Investment over the Life-Cycle," IZA Discussion Papers 4482, Institute for the Study of Labor (IZA).
  2. Kai Zhao, 2014. "Social Security and the Rise in Health Spending," Working papers 2014-04, University of Connecticut, Department of Economics.
  3. Sheng-Ti Hung & Kevin X.D. Huang & Hui He, 2013. "Substituting Leisure for Health Expenditure: A General Equilibrium-Based Empirical Investigation," 2013 Meeting Papers 1310, Society for Economic Dynamics.
  4. Zhigang Feng, 2009. "Macroeconomic Consequences of Alternative Reforms to the Health Insurance System in the U.S," Working Papers 0908, University of Miami, Department of Economics.
  5. Zhao, Kai, 2011. "Social security and the rise in health spending: a macroeconomic analysis," MPRA Paper 34203, University Library of Munich, Germany.
  6. Juergen Jung & Chung Tran, 2010. "The Macroeconomics of Health Savings Accounts," Working Papers 2010-12, Towson University, Department of Economics, revised May 2011.
  7. Juergen Jung & Chung Tran, 2014. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," Working Papers 2014-01, Towson University, Department of Economics, revised Feb 2014.
  8. Jung, Juergen & Tran, Chung, 2012. "The extension of social security coverage in developing countries," Journal of Development Economics, Elsevier, vol. 99(2), pages 439-458.
  9. Kevin X. D. Huang & Hui He, 2013. "Why Do Americans Spend So Much More on Health Care than Europeans?," Vanderbilt University Department of Economics Working Papers 13-00021, Vanderbilt University Department of Economics.
  10. Hui He & Kevin x.d. Huang, 2013. "Why Do Americans Spend So Much More on Health Care than Europeans?--A General Equilibrium Macroeconomic Analysis," Vanderbilt University Department of Economics Working Papers 13-00005, Vanderbilt University Department of Economics.

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