Health savings accounts
According to the U.S.
Treasury Department, health savings accounts were created by the Medicare bill
signed by President Bush on Dec. 8, 2003, and are designed to help individuals save
for future qualified medical and retiree health expenses on a tax-free basis.
Some pros and cons for
HSAs
Opponents argue that HSAs
have the potential to undermine the healthcare system, will do little more than
add another tax shelter for the wealthy, and will increase the number of
uninsured Americans if they encourage some employers to drop healthcare
coverage for workers. (J.B. Finkelstein, “New Health Savings Account Perk
Pushed,” American Medical News, June 2004) In addition, critics say they will
not help the uninsured working poor, who do not have discretionary cash to
contribute to HSAs.
Another problem with HSA
plans is that insurance doesn’t cover anything until the consumer pays a large
deductible. Some HSAs pay for basic preventive care, such as annual physicals
and mammograms, but others do not. For example, a patient with a suspicious
mammogram may have to pay $1,000 out of pocket for a biopsy to find out whether
the cause is cancer. Because there is no mandatory funding minimum, there may
be a temptation by some users to underfund the account and later be caught
short of funds. Expenses may also be incurred before planned funding has taken
place through scheduled payroll deductions. (Source Wikipedia)
In testimony before the U.S.
Senate Finance Committee’s Subcommittee on Health in 2006, Commonwealth Fund
Assistant Vice President Sara R. Collins, Ph.D., said that all evidence to date
shows that health savings accounts and high-deductible health plans worsen,
rather than improve, the U.S. health system’s problems.
Proponents of HSAs counter
that, in the long run, the plans will reduce an employer’s health costs and are
“consumer-directed,” designed to let a participant select the timing and level
of health expenditures. (R.B. Barker and K.P. O’Brien, “Health Savings
Accounts: Many Issues, Fewer Solutions,” Benefits Law Journal, Summer 2004) The
growing popularity of HSAs is evidenced by the increased number of employers
who are adding this option to their employee benefit plans. A survey by the
U.S. Chamber of Commerce found that two-fifths of the 1,000 employers surveyed
were likely to offer an HSA in 2005, and almost three-quarters indicated that
they were likely to do so in 2006. (Finkelstein, 2004) The number of HSAs
reached 391,000 in 2005, and some experts expect the number to reach 6.3
million by 2008. (Lee Conrad, “For the Enterprising, Health Savings Funds Are
Anything But Bitter Medicine,” US Banker, June 2005)
According to the
Congressional Budget Office (CBO), there are currently 47 million Americans
with no healthcare at all. The CBO report also said that in 2006, 87 million
Americans went without healthcare at least part of the year.
One more note from the CBO
report that should open up the minds of Republicans: the report said that due
to the escalating costs of healthcare, by 2012, 150 million Americans will no
longer be able to afford any healthcare.
In 2001, a family of four
was paying $5035 for health care; in 2006 the average family of four was paying
$11,500, with the employer paying much of the costs. Instead of Bush trying to
move the costs to the individual, he might try to streamline the actual costs
of healthcare and give a bigger tax break to the employer for his part of the
costs of healthcare.
HSAs will give less healthcare
to those that need it, and will result in more people with no coverage at all.