Health or Savings (But not Both)

Banks are being given the chance to get a lift from the multibillion-dollar opportunity offered by health savings accounts (HSAs). But before boarding an elevator, it's always a good idea to check whether it's headed up or down.

Proponents claim that HSAs will bring market discipline to healthcare. If people have to spend their own money on healthcare, the argument goes, doctors will act like they're in a LendingTree commercial.

But the law of unintended consequences has yet to be repealed. If most working Americans have a pot of tax-advantaged funds in an account that can be used only for either (a) savings or (b) healthcare spending, then the healthcare and pharma sectors will direct their formidable energy toward separating fools and their money. This will create an unhealthy tension between fear of today's illness and fear of tomorrow's financial ruin.

Is your bank ready for that marketing battle?

The consumer, rather than the insurance company, will bear the responsibility for making the decision to approve or deny care. Even if people make the right choices in aggregate (a questionable proposition), specific individuals will make horrible choices.

On one end, hypochondriacs will spend their entire savings on dubious cures and practices, while on the other end, the miserly will jeopardize their own health and the health of others by foregoing routine expenditures in order to bolster their rainy-day accounts. Either way, are those customers good for your brand?

Right now, HSA deposits seem riskless. Banks aren't responsible for enforcing IRS rules about where the money can be spent, so HSAs are just another deposit account with no consumer protection headaches or compliance gotchas. But do you really believe it'll stay so simple?

Healthy skepticism is in order.