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Do HSAs Improve Collections?

HSAs & Self Pay Collections

The goal of Health Savings Accounts (HSAs) is for individuals and families to be able to save for, and pay for, healthcare expenditures.  While HSAs do offer many benefits for self-pay patients in terms of pre-tax and tax-deductible contributions, in addition to tax-free withdrawals or earnings, the collections aspect of HSAs can present some issues for both self-pay patients and hospitals.

Increased Costs for Patients

In some cases, a HSA may result in higher costs for some medical services for certain patient groups.  If a patient has not been funding their HSA, or has been funding a smaller amount, they may have to pay more out-of-pocket because of higher deductibles. HSAs tend to benefit those that pay more in insurance premiums than they do in actual health care.

What About Increased Healthcare Costs?

One downfall of HSAs is that they do not account for the rising cost of healthcare.  A self-pay patient’s healthcare could exceed what they actually anticipated.  If there is not enough money in their HSA account to cover what the patient expected, the patient may not be able to pay for the medical care. The high-deductible of HSAs might be out of reach for lower income families who might not have enough of a cushion to cover unexpected medical incidents.

HSAs might even cause a shift of costs in the healthcare industry.  If healthier people choose to insure with HSAs and non-healthy individuals stay with traditional plans, the risk factor in the traditional plans could change.  This, in turn, would increase premiums for employers and patients with traditional plans.  The real impact of HSAs is not as apparent as just the rates themselves.

HSAs and Hospitals

Hospitals have different concerns when it comes to HSAs in terms of financial ramifications. Some claim that HSAs could increase their accounts receivable.  If hospitals do not manage their HSA’s promptly and correctly, they will have to reconcile accounting or non-payment issues in the future.  Therefore, obtaining information on a patient’s insurance coverage under a HSA is important.

Collection on HSAs: Billing Transparency is Key

It is highly recommended that hospitals be proactive in dealing with self-pay patients. Hospital staff should get into the practice of letting patients know as soon as possible what they are expected to pay for the best chance on collecting on HSA patients.  At the same time, hospitals need to educate self-pay patients as to exactly what they charge for common procedures and surgeries.  Patients in high-deductible plans will know exactly who they will have to pay, whether it be a co-payment or actual claim.

In order to make payments easier, hospitals may also consider getting permission from patients to deduct directly from their HSA debit cards to eliminate the need to mail bills, especially in the case where charges are not known right away.


By explaining to self-pay HSA patients the amount that will be due for payment, hospitals can increase their collection rates for this patient population.  Pricing transparency, when available, and better patient communication is key when dealing with HSA patients.

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