In her old health care world, Karen Zapata used only HMO doctors, faced high insurance premiums and forked out the inevitable co-payments.

Now, with her health savings account, she pays lower premiums and enjoys more freedom in choosing her doctors. But she also has become a more savvy shopper for health care, learning when to ask for a lower-priced prescription.

It's a trade-off: Her new family insurance policy may offer cheaper premiums, but the first $2,500 comes out of her pocket. So Zapata sticks money into her tax-free health savings account (HSA) to pay medical expenses and offset the high deductible.

"I'm in control of my health care now," says Zapata, a DeKalb Medical system integration analyst. "I'm much better informed on how things work."

The popularity of health savings accounts has grown over the past few years, attracting employers and workers with a price tag that's significantly lower than other forms of insurance. Similar to a 401(k) account, HSAs are funded with pretax dollars. The money in an HSA grows tax-free. And it's tax-free when spent on health care. But, to be eligible for an HSA, an individual must have a high-deductible health plan.

Republican leaders increasingly have embraced HSAs as a private-market answer to both rising health costs and the uninsured. This year, proposed legislation in the Georgia General Assembly promotes use of the accounts. Proponents, including those with Newt Gingrich's Center for Health Transformation, say that with tax exemptions and credits and other proposed legislative changes, a new crop of HSAs could eventually extend coverage to 500,000 of Georgia's 1.7 million uninsured.

The idea is that policies with cheaper premiums and tax benefits will help small businesses provide insurance while helping to lure currently uninsured workers. Even financial rewards for healthy behavior —- extra money added to a worker's HSA —- are envisioned.

Skeptics say HSA growth potential is exaggerated, and that the accounts target healthy people, siphoning them out of insurance pools and leaving a sicker pool of patients —- and higher premiums —- behind.

Another problem: the lack of good, consumer-friendly information that allows people to make informed decisions on services, such as a comparison of hospitals and doctors' prices and effectiveness.

"We are a long way from the time where consumers can make cost-effective decisions," says Bill Custer, a health insurance expert at Georgia State University. The Georgia legislative target of insuring 500,000, Custer says, "is totally unrealistic."

A national employer survey by consulting firm Mercer found that just 5 percent of covered workers were in HSA-based or similar health plans last year, up from 3 percent the year before. The cost per employee —- $5,679 —- was much less than the price for an HMO ($7,120) or PPO ($7,352).

Among 33 large Atlanta employers surveyed by Mercer, though, 10 percent of workers had such consumer plans.

With the deductibles and tax-sheltered savings accounts, more of the patients' money will be on the line as out-of-pocket medical costs occur, HSA proponents say. So patients presumably will take time to shop for the best price and quality of services —- and not seek unnecessary care. They will have a financial incentive to lead healthier lives. That way, health spending will be contained, along with employer costs.

Republicans say that something must be done to address the high number of uninsured or there will be more government involvement in the system —- exactly what many Democratic reformers seek.

"We are at a crossroads in health care," says state Sen. Judson Hill (R-Marietta), lead sponsor of Senate Bill 383 that aims to expand HSAs. "We have to change the fundamentals of health care to get a different outcome."

DeKalb Medical launched its health savings accounts three years ago and now has 10 percent of covered employees in those plans. It also puts $125 to $325 into the accounts annually for each worker.

With an HSA plan, Cheryl Iverson of DeKalb Medical now challenges medical bills. That's because any extra charge comes out of her health savings account.

Iverson, vice president of marketing, recently found a $150 hospital charge that wasn't justified and kept that money in her account.

"You have to pay attention," she says. Because of the substantial deductible, HSAs "are not for everybody," Iverson says. "You have to have some disposable income."

Kirsten Girguis, DeKalb Medical's benefits manager, says the HSA option —- with premiums 50 percent cheaper than the HMO —- has helped restrain the cost of insurance for all employees.

Leftover money in the HSA carries over into the next year. If a DeKalb Medical employee spends more than the deductible in medical care under her family plan, then regular insurance kicks in. Preventive care such as a mammogram is paid at 100 percent and is not subject to the deductible.

At Miami-based Burger King, HSAs have attracted a cross-section of employees, says the company's benefits manager, Susan Kunreuther.

Burger King has deductibles of $2,500 for a single and $4,500 for family, but also puts $500 into the workers' accounts. HSAs have increased from 10 percent to 17 percent of the company's salaried and restaurant management personnel. The key to growth is to educate the work force, because HSAs can be complicated, Kunreuther says.

How much can HSAs grow? Custer of Georgia State says the accounts will continue to increase, but mainly from already-insured people switching from another type of policy.

"They won't have that big an impact on cost inflation," he says. "I don't see them becoming a dominant type of health insurance."

Consumer group Families USA says the majority of uninsured can't spare the extra money to stick into their savings account or even cover the deductibles.

Consumers must check the insurance benefits first before signing up for one, says Janice Barrocas, lobbyist for the Women's Policy Group, a Georgia advocacy group.

"It may be the illusion of coverage," she says. "They need to cover preventive care and offer comprehensive coverage."

Meanwhile, the Republican-controlled state Legislature appears ready to push HSAs. A bill sponsored by Hill has cleared the Senate and is awaiting House action. The state's medical community supports the changes, as do the state's leading health insurers and business groups. And Gov. Sonny Perdue said recently that legislation sponsored by Hill and Rep. Mickey Channell (R-Greensboro) "will incentivize small-business owners to provide low-cost health insurance to employees and their families."

About 70 percent of Georgia businesses with fewer than 10 employees don't offer insurance to their workers. So the potential is wide open, HSA proponents say.

"The private insurance market is already in chaos," says health care consultant Ron Bachman, who helped develop the Georgia HSA initiative. "This will offer a lot of choices, especially for younger people who want to see their dollars accumulate tax-free."

HOW THEY WORK

> COVERAGE: HSA policyholders pay medical costs up to the deductible at discounted rates negotiated by an insurer. After the deductible is met, the policy works like traditional insurance, paying a percentage of the medical costs up to an out-of-pocket spending limit. Some policies pay 100 percent after the deductible.

> ACCOUNTS: HSA members can put tax-exempt money into a 401(k)-type account. Many employers contribute to the accounts. The policyholder can use the tax-free funds to pay medical costs, including some not typically covered by insurance, such as orthodontia and eyeglasses. Unspent money can be rolled over year after year —- there's no use-it-or-lose-it provision.

> PRICE: A consumer buys health insurance, either individually or through an employer, with a deductible of at least $1,100 for an individual and $2,200 for a family. Usually high-deductible policies have lower premiums.

> OTHER FEATURES: The accounts can be invested. HSA members can use a debit card or a check for medical spending. Any money used for nonmedical spending is subject to income tax and a 10 percent penalty. The accounts are portable, so they can be taken from one job to another. At age 65, an account holder can use HSA funds by paying income tax on withdrawals for nonmedical expenses.