Directions: Read the given passage carefully and answer the questions as follows:
Passage
After a slow start, Health Savings Accounts (HSAs)-tax-free savings accounts designed to help people save for their and their dependents' medical needs-have become increasingly popular with individuals who buy their own insurance, and with employers who provide it. The advantages of HSAs are fairly easy to understand: Funds placed into an HSA are sheltered from taxation, just as is the case with money put into Individual Retirement Accounts (IRAs). Unlike funds in IRAs, however, funds in HSAs (and earnings they have acquired through investments) are also exempt from taxation (and penalty) when they are taken out at any time, as long as the funds are used for medical purposes.
An HSA, however, must be combined with a high-deductible health plan. In addition, the amount that can be contributed annually to the account is restricted. Currently, an individual must have a deductible of at least $1,050 to participate, and can contribute as much as $2,700 per year. For families, the figures are higher. Because of the high deductible, out-of-pocket expenses can be substantial, though premiums are relatively low, making HSAs especially attractive to people who don't expect to need much medical care.
This last point is not lost on those who claim that low-income individuals with serious health issues are unlikely to derive any benefit from HSAs. If you don't make much, you will not be able to contribute much to the account. And because the deductible is so high, low earners will pay for a good deal of medical care before the deductible takes over. As a result, people who can't afford (in any sense) to gamble with their health may forego a trip to the doctor. Furthermore, since HSAs are increasingly perceived as attractive to relatively healthy and wealthy Americans, companies that provide traditional insurance may lose business and attempt to make up for this loss by raising their premiums or cutting benefits to low-income clients. Another argument against HSAs is the swelling effect that tax-free accounts will have on the national budget deficit.
No single initiative can solve this nation's health care problems. Many factors, including malpractice insurance, high-tech research costs, an aging population, and yes, old-fashioned greed, play a role in the rising cost of medical care. HSAs represent a move in the right direction, but they will almost certainly need to be adjusted and supplemented to make it easier for all individuals to get access to competent health care.
MULTIPLE CHOICE QUESTION
Try yourself: According to the passage, some critics of HSAs believe that _______.
A
those responsible for devising this type of account have not taken into consideration the effect it can have on the budget deficit
B
some people will not be able to put enough money into HSAs to make them worthwhile
C
only relatively healthy and wealthy individuals will sign up for one of these accounts
D
the relatively low premiums are still too high for many individuals
E
individuals who are interested in HSAs should not be forced to choose a high-deductible policy
Correct Answer: B
The 3rd paragraph states that\.. low-income individuals with serious health issues are unlikely to derive any benefit from HSAs. If you don't make much, you will not be able to contribute much to the account.” (A): No one in the passage ascribes ignorance of the facts to anyone. (C): The critics say that HSAs are a good deal to healthy and wealthy individuals, but not that only they will sign up for HSAs. (D): They may feel this way, but this is not mentioned in the passage. (E): As in choice D, critics might very well feel this way, but we don’t know for sure that they do. Critics might want to do away with HSAs completely.
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MULTIPLE CHOICE QUESTION
Try yourself: The passage is chiefly concerned with _______.
A
proving that HSAs are not yet sufficient to address the nation’s health care problems
B
giving a balanced view of governmental approaches to making health care more affordable
C
making the point that HSAs, despite what critics have said, have become increasingly popular with individuals and employers
D
providing a basic understanding of HSAs, and presenting opinions on the subject, including those of the author
E
comparing HSAs to more traditional health insurance systems
Correct Answer: D
Using STOP to find the Purpose of this passage is an excellent way to answer this question. The first two paragraphs provide the basic understanding; the third paragraph presents some opinions; the last paragraph gives us the author's take on the subject. (A): The author does not imply that HSAs will one day be sufficient to address the nation's health care problems. They are, more modestly, a step in the right direction. (B):This choice does not mention HSAs. (C):The author does mention that HSAs are increasingly popular, but this is a subsidiary point not the main one. (E): There is very little comparing in the passage.
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MULTIPLE CHOICE QUESTION
Try yourself: According to the passage, low-deductible policies _______.
A
offer several clear-cut advantages over HSAs
B
are limited by the quality of the health care they cover
C
have certain restrictions regarding how much they will cover in a given year
D
are offered by companies that are less motivated by greed than those that offer HSAs
E
may become increasingly expensive or less comprehensive
Correct Answer: E
The 3rd paragraph states that "since HSAs are increasingly perceived as attractive to relatively healthy and wealthy Americans, companies that provide traditional insurance may lose business and attempt to make up for this loss by raising their premiums or cutting benefits to low-income clients." (A): Besides the low deductible itself, no advantage is described. (B): The quality of the care is never mentioned. (C): This restriction may be common, but it is not mentioned in the passage. (D): This comparison is not made.
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MULTIPLE CHOICE QUESTION
Try yourself: The last paragraph performs which of the following functions in the passage?
A
It presents a moderate view on the main topic and offers a generalized remedy for a relevant problem.
B
It summarizes the viewpoints expressed earlier in the passage.
C
It acknowledges that some problems are too complex to be completely solved.
D
It criticizes both of the main viewpoints that had been expressed earlier in the passage.
E
It offers statistical evidence to suggest that the problem discussed in the passage cannot be addressed through any one initiative.
Correct Answer: A
The author's Tone is moderate: "HSAs represent a move in the right direction, but..The generalized remedy is that the HSAs "need to be adjusted and supplemented to make it easier for all individuals to get access to competent health care." (B): Viewpoints are not summarized. (C): Nowhere does the author say that some problems can't be solved. (D): The author does not explicitly criticize earlier viewpoints. (E): No statistics are presented.
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The document Practice Test: Reading Comprehension - 46 is a part of the GMAT Course 100 RCs for GMAT.
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