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The solution is a Health Savings Account

Cal

Well-known member
The Ugly Truth About Healthcare (and What We Can Do About it)
By Rod. D. Martin
http://www.intellectualconservative.com/2006/the-ugly-truth-about-healthcare-and-what-we-can-do-about-it/
The solution is a Health Savings Account — much like your IRA or 401(k) –and its enactment (in limited form) in 2003 is just the beginning of what could become a health care revolution.

President Bush was addressing health care again Tuesday morning. But the President many conservatives assail for his gargantuan prescription drug benefit wasn't talking about socialism.

In fact, he was promoting its exact opposite. And it may well be the cure or virtually all of America's health care disease.

The problem is not resources. America is the richest country in human history, with the best-trained doctors and nurses, the highest qualitymedical schools, and technology that is nothing short of miraculous.

The problem is also not the free market, as socialized medicine proponents always claim. The proof is as close as your television or Victoria's Secret catalog. High quality plastic surgery is a booming business in America, and is largely uncovered by insurance or Medicare. As a result, it faces none of the government price-fixing applied to most basic health care, and guess what? Prices drop each year, while plastic surgeons make more and moremoney.

No, the problem is distribution; or more precisely, the left's failed "solution" to that problem.

Born in an era of wage-and-price controls, our system was designed to allow employers — but not employees (i.e., patients) — to purchase completely tax-free health care. This benefited the unions who voted for Democrats and the fat-cat businessmen who contributed to their campaigns.

But it also largely destroyed the market in medicine: tiny groups of people in a handful of businesses and government agencies make the health carechoices — and fix the prices — for everyone else.

The result is greater and greater centralization. Millions of consumers are forced into HMOs — or government programs, or overtaxed emergency rooms — to get the care they need, reducing choice and increasing bureaucrats' power. And given her way, presumptive Democrat Presidential nominee Hillary Clinton would put us all in what amounts to a radical expansion of the VA system.

There's just one problem: none of this works. It's like a crack-user increasing his dose to cure his addiction. Costs keep spiraling — as government's "fixed" prices always do — while consumers have no means to comparison-shop, and no way to even take their insurance with them from job to job.

President Bush has a solution, one I've strongly advocated for many years. That solution is a Health Savings Account — much like your IRA or 401(k) –and its enactment (in limited form) in 2003 is just the beginning of what could become a health care revolution.

An HSA makes whatever you save or spend on health care tax-free (a benefit FDR gave to big corporations decades ago). It also allows every American toeasily own his own fully-portable insurance: changing jobs is no longer a problem. And it encourages vastly more employers to give better health benefits (or even just give benefits at all), by reducing the cost andincreasing the flexibility in providing employees a health plan.

And it gets even better. HSAs are a tremendous savings vehicle. Right now, if you have medical insurance, you or your employers likely pay severalhundred dollars each month to an insurance company. But when it's gone, it's gone. If you don't get sick and "use" that money, you'll never see it again. And if you fail to pay next month, you're cancelled. Adios.

Not so with an HSA. With an HSA, you — or your employer — contribute monthly to a tax-free savings account. If you don't use the money, it'sstill there. In fact, it's growing, either through compound interest or capital gains or both. If you get sick, you use some of your money to paythe doctor of your choice: no one can turn you away because they don't take your brand of insurance" when your insurance is cash. And if you getreally really sick, your HSA has a catastrophic insurance policy on top of it to cover costs you can't afford.

It won't happen overnight, but HSAs will change everything if we let them. Young people — who rarely get sick — will amass enormous sums oftax-exempt money in their HSAs: by the time they're old, they'll effectively be self-insured; if they stay healthy into old age, they'll passthat money — potentially hundreds of thousands of dollars — to their children.

HSAs can solve America's health care crisis. Over the next generation, they can also largely eliminate poverty in America. And they can create a freemarket in most health services that sends costs spiraling downward instead of forever up.

President Bush wants to expand his HSA law, which just since 2003 has dramatically expanded coverage of the previously uninsured among the poorand employees of small businesses. We won't fix health care overnight. But we need to start right away.

Copyright: Rod D. Martin, 4 April 2006.


Profile: Rod D. Martin is Founder and Chairman of TheVanguard.Org (http://www.TheVanguard.Org). A former policy director to Arkansas Gov. MikeHuckabee and Special Counsel to PayPal.com Founder Peter Thiel, he is a member of the Board of Governors of the Council for National Policy, Executive Vice President of the National Federation of Republican Assemblies (NFRA), and editor and co-author of THANK YOU, PRESIDENT BUSH, the definitive handbook to the second term.
 

Brad S

Well-known member
HSAs sound interesting, but I have some thoughts.
1) all health insurance premiums were supposed to be deductible soon, but they certainly are to incorporated entities.

2) My health insurance is about $350/month for my family with a $2500 deductible max of 2 deductibles payed per anum + another 5k in copays. So it sounds like the Bush plan would tax exempt savings to cover my part.

3) 60 Minutes did a piece on hospital's multiple pricing schemes where paying cash nearly doubled the rate the paticient was billed when compared to insurance cos' bills
 

Cal

Well-known member
Hey Brad S, glad to see you back on the board. I sort of thought #3 was the opposite, and the hospital usually worked with you on a non-insurance deal.
 

Steve

Well-known member
#3 was the opposite, and the hospital usually worked with you on a non-insurance deal.

in the rare times when My insurance did not cover, the bill was "much" higher.....

My wife had to get a scan, and the insurance cost was about $800 plus....

when we screwed up and let the dr. get a second scan (which the insurance didnot cover) the cost was nearly $1200 .....and they got every cent.....

Dr did later admit he shouldn't have requested the scan again.....but we decided to see a diferant Dr.....(who found my wife's cancer) so I just kinda wrote off the $1200...as a blessing.....

but in every instance that the insurance didn't pay the bill was more....and if the insurance later covered it they recieved a discount...
 

Brad S

Well-known member
"Dr did later admit he shouldn't have requested the scan again.....but we decided to see a diferant Dr.....(who found my wife's cancer) so I just kinda wrote off the $1200...as a blessing..... "

Very wise thinking.

Cal, I think you are right that they'll settle some bills to stay out of medical bankruptcy. I understand not watching 60 minutes and the CBS antitruth squad, but they show 3 bills that were fraudulently more expensive because of cash pay. This isn't a MSA deal breaker though because we regulate everything anyway, so we could stipulate no preferential pricing.
 
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