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Commentary

Is Healthcare Cost Sharing the Answer?

Policy research suggests consumers are not good at distinguishing high-value services from low-value.

Republicans talk up the appeal of consumer-directed healthcare spending. This is often a health savings account, or HSA, usually combined with a high-deductible insurance policy. Consumers can save and invest, tax-free, in their HSA and then use that money to pay out-of-pocket costs.

This approach assumes that consumers overuse health-care services and that, when faced with spending their own money from the HSA, they will be smart about spending on high-value services from the lowest-cost provider.