It was the pre-tax HSA that I partially questioned in my second paragraph. If there’s a serious need to use it in order to balance incentives, this can only mean that there are significant undesirable incentives to be balanced. Which is clearly the case at present.

That said, to me the main reason for a tax deductible HSA is to ameliorate the bad effects of the employer tax exclusion. In that regard it has proven very effective. But if the tax exclusion were replaced by a tax credit specifically designed not to cause a great deal of price distortion, then there shouldn’t be as much need to have HSA deposits also qualify for the tax credit. In that case Roth-style HSAs would be easier on the Treasury.

I have mixed feelings about this development. It allows the government to avoid responsibility for the problem and pretend that it knows what it’s doing, and Canadians who used to scream bloody murder about inadequate access to care can now just say to each other: “You can’t fight city hall. Let’s just pay a few hundred bucks and work around it”.

Where is the Commonwealth Fund to sound the alarm for the “underinsured” when you need them?!?!?