This Article offers the first comprehensive legal-policy critique of existing Health Savings Accounts (HSAs), arguing that the current approach is redistributively regressive, thus exacerbating inequality, and also fails to accomplish stated healthcare goals. We propose an alternative—Equitable Health Savings Accounts—which uses cash grants as a tool to address both of these problems. Equitable HSAs are a market-based social program that calibrates size and delivery of a government subsidy to help the least well off and to facilitate participation in healthcare markets. Equitable HSAs can serve as a model for using cash grants to bridge the gap between Republican social policy proposals that generally carry a market libertarian flavor, and Democratic proposals that are focused on redistribution and social safety nets. Contrary to conventional political wisdom and academic commentary on the tradeoff between equity and efficiency, these goals need not be mutually exclusive. Rather, as our Equitable HSA proposal demonstrates, cash grants can strengthen market forces, allowing policymakers to harness the benefits of markets to achieve policy goals while engaging in redistribution.
Samuel Estreicher & Clinton Wallace, Equitable Health Savings Accounts, 55 Harv. J. On Leg. 395 (2019).