Tuesday, December 10, 2013

What If Health Savings Accounts Replaced The "Affordable" "Health" Care Act?

"Health Savings accounts (HSAs) are like personal savings accounts, but the money in them is used to pay for health care expenses.  You own and control the money in your health savings account.  The money you deposit into the account is not taxed.  HSAs and high-deductible health care plans were created as a way to help control health care costs.  The idea is that people will spend their health care dollars more wisely if they're using their own money.  In addition, doctors and other health care providers will have an incentive to lower their rates because they are competing for business." 
                                          The Mayo Clinic

The idea of health savings accounts has been floating around for some time.

Why hasn't it taken hold generally?  There is a one word answer:  politics.

Why has politics squashed the general acceptance of health savings accounts?  There is a one word answer:  control.

As with everything, there are advantages and disadvantages.

HSA Advantages:
  • People are in control of their own money and how it is spent.
  • Employers can contribute to your health savings account as a company benefit, but since people own the money in the account there is portability from employer to employer.
  • The money is always yours.  If, for example, all of the monies contributed to the account are not spent in a given year, it rolls over and becomes part of the next year's account.
  • The money, deposits and all, is not taxed.
HSA Disadvantages: 
  •  What happens if there is a dramatic and expensive illness that costs more than the account can pay?
  •  People would be required to research and decide on their own health care.
  •  Many people cannot afford to put much money aside in such an account.
  •  Some might avoid needed health care simply to maintain the money in their account.
  •  If/when money is withdrawn from the account, instead of paying for health-care-related expenses, it is taxed.
Does anyone understand how quickly the free market, and free enterprise, would spring up companies and organizations that would completely handle those disadvantages?

When I was a kid my mother had a health insurance policy through her work, but it did not cover huge expenses, the "dramatic and expensive illness" above.  For those, which we fortunately never had to use, she had another policy called "major medical."  It was an additional policy, but as such a small population of the entire insurance pool used it the costs were minimized.

If there are those who would say that researching and deciding on individual health care paid for by HSAs is too difficult for some, the free market would provide its own "navigators" (as provided now by the "Affordable" "Health" Care Act) who would not be politically rewarded or motivated.  Experts would develop and operate businesses that would help people navigate health care decision making.

Can anyone say that researching personal health care needs within an HSA is more complicated than a system devised by bureaucrats, in secret, with zillions of pages of rules and regulations, with intentionally hidden regulations, fees and costs, personal data collection, with identity theft, and with hundreds of new bureaucracies and tremendous uncertainty as regards peoples' futures?  If that case can be made, let me know.

Make it so HSA monies cannot be withdrawn until a certain age - 65, or 68, or 70 - and then at a lower tax rate.  And make it so any monies left over at death can be bequeathed as inheritance.  It would be private property.

How about this idea:

The gubment claims to have spent many years, a $Trillion to set up a system, and more than $650 million to develop a website that still doesn't work (plus advertising).  We know the website is substandard because it was recently touted that the website was "fixed" and operating with speed and efficiencies similar to websites in the private sector.  Wow, what?!  That is a huge admission that the private sector could have done it better, but I digress.

And it STILL is not operating anywhere near to what people expect from websites.  Will it ever?

The more cynical among us would say that the current chaos surrounding the implementation of the "Affordable" "Health" Care Act, and the website, is intentional.  The more cynical would say the chaos is right out of the Alinsky Model.  The more cynical would say that there are those in gubment who follow the Alinsky Model religiously and who think that a "crisis should not be wasted."  The more cynical would say that the problems are baked into the system so that the only entity big enough and wonderful enough to "fix" it is gubment, which then rides in on its white horse to "solve" the problems.

Do the problems ever get solved?  Or are they more exacerbated?

Here is the idea.  What if, instead of spending $3000 per person, per year, to develop this chaos, that instead, INSTEAD, the gubment lets people choose for themselves.  If they want, some can choose the AHCA.  But what if another choice was a personal Health Savings Account into which the gubment starts off the individual HSA accounts with $9000 per person?  Forbes a year ago calculated that annual per capita health care expenditures are nearly $9000 per person.  That will only increase.

Currently only $3000 per individual, or $6000 per family can be contributed annually toward an HSA.  How about starting off an HSA with a one-time gubment contribution of $9000 per person?  PER PERSON!

If the gubment is going to spend the money, why not spend it wisely?

Yes, a family of four would start out with $36000!  And, AND, the owned account is portable state to state, employer to employer and can be bequeathed as inheritance.  When a child leaves the family to start out on his/her own life, their share of the money goes into their own, new personal/family HSA, or the rules extend to creating a new, one-time contribution toward the new start.  Additionally, and with the HSA, the family can purchase a major medical policy.

Imagine the relief and comfort of knowing we have such monies available?  Would not most health care worry disappear?

Now certainly there would have to be rules.  But let the market and experts, not bureaucrats, decide the rules!  I can think of a big one - that only bona fide American citizens receive such money.  No phony balonies.  No moochers.  No illegals.  No money sent to people overseas.     


And don't say it would be too complicated.  And don't say it would be more difficult than what we have now.  What we have now is going to be so burdensome and so expensive that it will be what some have called a train wreck (and what the more cynical among us would say is an Alinsky-model-planned train wreck). 

But, you say, there would be fraud - there is always waste and fraud with gubment anything!  Then privatize it!  Once the gubment gives Americans back some of their own money, it gets out of the HSA program and free enterprise manages the system.  I bet it would operate at the "speed and efficiencies of the private sector."  And nobody in gubment would have to "apologize..."


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