By all accounts, in the upcoming State of the Union speech Bush will be proposing an increase in Health Savings Accounts as his “solution” for the health care crisis, under the rubric of “consumer-driven health care.” As you might expect, it’s just another Republican scam to shift more costs and risks to consumers and reward GOP donors, in this case the health insurers and large employers. Insurers get to charge premiums and cover less costs; employers get to push more health care costs onto their employees.
If you’re not familiar with HSA’s, there is a terrific post explaining them at TPMCafe, Me and my HSA (alternate link, searched for and added in March 2012, because the original link rotted), by a surgeon who has had an HSA for some time. It’s a great deal for her, because she’s young, single, ridiculously healthy and has a high income. But she details the pros and cons for her and for most people, and concludes:
This is my reward for earning in the top 1% or so of George Bush’s America – I make a profit on something that bankrupts people who aren’t as fortunate. Note to self: avoid getting sick. Avoid getting old too.
Now I don’t know what, or even if, George Bush thinks, but it seems to me that this is unfair, and borderline immoral. Like the proposed social security reforms, the Republicans are pretending to offer me more control and opportunity, but what they’re really offering is the opportunity to eat all the risk myself. I can probably do that, but my situation is very rare. And I am so atypical of the standard American health care consumer that portraying HSAs as a national solution is ridiculous to the point of absurdity.
From personal experience, I can attest that HSA’s suck, even if you have a relatively high income, but are not absolutely healthy. In October 2004, we were forced into a high-deductible insurance policy, which is coupled with an HSA. We are financially able to save money to the HSA, but because we have ongoing health care costs, we’ve needed to draw down the saved funds. The health insurance has paid for exactly nothing in the time that we’ve had it, though of course we’ve been paying the premiums. All of our heath costs have come out of our pockets, sometimes (but not always) laundered through the HSA. There are only two “good” things about the insurance. One, we would have 80% coverage in the event of a hospital stay, after paying $4,000 out of pocket (that high deductible). Second, though we pay for virtually all of our health care costs, we pay at the rate that the insurer has negotiated with the providers, so at least we don’t pay the full retail price. It’s hard to call paying $90 instead of $150 for a routine doctor’s visit a terrific deal, compared to the days when we had real health insurance.
Oh, and to get the most out of the policy, you have to be diligent about following all of the famously confusing paperwork and making sure that the insurer has credited all visits towards the deductible. If you want prescription costs to count towards the deductible, you have to keep all the pharmacy receipts, make copies, then submit each receipt as a separate claim. Mind you, you won’t get any money back for doing that bookkeeping; it just counts towards the deductible, so if you do get catastrophically sick, it will cost you a bit less out of pocket.
In short, I’ve already seen the Bush future. It has cost me more money, and I’ve gotten less health care for that money. It incentivizes me to put off going to the doctor because of the cost, thereby increasing the chance that I’ll put off getting early treatment for illness. It’s more complicated and bureaucratic. It sucks.
For more smart thoughts on health care and HSA’s, I heartily recommend Ezra Klein’s recent posts over at Tapped.
Thank you thank you thank you to the Canadian socialized medical system. I’ll be talking a bit about why it’s a good thing on the diabeticfeed podcast this Sunday, incidentally.
I too have crappy insurance with a high ($5000) deductible. As a self employed person in the state of Maine, I have exactly 3 choices available to me and this is the one I can afford. It seems we are returning to the way life was at the turn of the last century– if you don’t have the money for the operation, you die. “Good old days”? I don’t think so.
Current Tom Status
Tom’s still pretty darn sick. He went into the ICU on Friday afternoon, and as of tonight (Sunday), I was told that he’d be there at least through Tuesday. I’m expecting he’ll be in the general ward from 1-3 days…
Another option may be the group HRA or Health Reimbursement Arrangement. The HRA can only be employer funded, no employee contributions. Even sole proprietors can hire a spouse and use this method to writeoff 100% of insurance and medical expenses. The most popular way HRAs are used is in conjunction with a high deductible health plan. The employer buys a much higher deductible and uses some of the premium savings to fund an HRA that will pay all employee deductible expenses in excess of the companies old $250 or $500 deductible. Employees are cushioned from the new financial burden and expenses become 100% write-off for the employers. How many employees are likely to have a deductible expense? Actuaries will tell you 15% to 20% of a standard group will experience a deductible expense claim. The bottom line is the employer save substantial amounts of money.