Here’s why health savings accounts may contribute to inequality

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A popular way to save for out-of-pocket medical expenses might be contributing to health-care inequality, new research suggests.

Health savings accounts are tax-advantaged accounts available to Americans with high-deductible health insurance policies. Federal law established them in 2003. Since then, HSAs have grown quickly as employers have adopted high-deductible plans for their workforces to save money.

HSAs offer a three-tiered break on income taxes: contributions are tax-free, as are investment earnings and withdrawals for eligible medical expenses.

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When used optimally, they’re among the most efficient ways to save and build wealth, according to financial advisors.

However, Black and Hispanic savers, women and low-income individuals aren’t using the accounts as effectively as others, such as men, higher earners, and white and Asian savers, according a new report published by the Employee Benefit Research Institute.

The former groups tend to contribute less money to HSAs, have smaller balances and invest these funds less often — dynamics that may reinforce and exacerbate health inequities already present along racial, gender and income lines, according to the report.

“Racially based, ethnicity-based and income-based discrepancies in the usage of HSAs are troublesome,” according to the report, which was authored by Jake Spiegel, a research associate at the institute.

“To the extent that those enrolled [in high-deductible health plans] do not also enroll in HSAs, do not take full advantage of the tax benefits HSAs offer or do not save a sufficient amount, they may find it more difficult to pay for medical expenses, and may delay necessary care…

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