Universal Eyes:

The idea of Health Savings Accounts (HSAs) seems good, but certain things are not clear to me.

I am curious about what restrictions people have to withdraw money from the accounts. Reading more about it, I found certain details:

"HSA participants do not have to obtain advance approval from their HSA trustee or their medical insurer to withdraw funds."
"Funds can be withdrawn for any reason, but withdrawals that are not for documented qualified medical expenses are subject to income taxes and a 10% penalty."

What happens to somebody who is having money problems? Imagine that somebody lost their job and is defaulting on their mortgage payments. They can go, take their HSA money (paying the 10% tax) and save their home, but they would be left without the HSA. Somebody who for some reason needs money in a hurry could find themselves with no coverage of any kind all of a sudden, and knowing human nature, when people have money problems they will go for whatever they can grab.

The HSA is suppossed to accrue value over time, like an IRA.

"income tax is paid on the withdrawal, and in effect the account has grown tax deferred (similar to an IRA)"

I imagine that there is somebody managing that money, most likely some financial services firm. If for some reason they lost money (like IRAs do when the financial markets take a tumble) then people could find themselves with less money for medical expenses than they may have expected.

I Imagine that like IRAs, there is some degree of protection from bankruptcy filings. In some states bankruptcy proceedings or creditor lawsuits cannot seize assets in an IRA account. I Imagine that something similar must exist for HSAs. Otherwise somebody who goes bankrupt could lose healthcare coverage to creditors seizing the account.

I am curious to know too how the plan works for people who cannot afford to fund the HSA account. Would those people have to opt for different insurance plans, or rely on government-provided care? A larger family might be unable to fund an account for many children. I imagine that some government-sponsored child coverage would help those families.

Is the system fair for all age groups? As we grow older, our health can deteriorate. A senior's medical expenses are not the same as those of a person in their 30s. The assumption is that the HSA account grew over time, but if for some reason the account did not grow (like many retirement plans in the last 9 years), the senior would end up losing in relation to a younger, healthier person.

Well, these are technical details in an otherwise interesting idea, like educational savings plans (529 Plans) that allow parents to save money towards a child's future education.