Some how or other even though Reggie Herzlinger is apparently having some doubts about how effective HSAs are going to be, the movement is throwing up new intellectual champions. The latest is R. Glenn Hubbard of the AEI who has somehow managed to become Dean of the Columbia Business school in his spare time. He wrote this as part of his latest article in the National Review Online
Critics from the left sometimes say that HSAs put more of the onus of health costs on individuals. Tell that to the 46 million Americans who currently don’t carry any insurance. By making such insurance for major medical events — such as emergency hospitalization and chronic illness-more affordable, HSAs and other consumer-driven health-care policy ideas broaden access to essential health care. That will help millions of Americans get the health care they currently can’t afford.
Is he really saying this? Is he really saying that cheaper insurance products will reduce uninsurance? Let me repeat something in a way that’s simple enough even someone from Columbia business school can understand it.
We have had “cheap” high deductible insurance products for years and years. I personally have had one off and on since 1998 and they were around for long before that. And as the old high deductible “major medical” policies were around when health care was cheaper, and therefore were less expensive than they are now, according to Hubbard’s logic we should never have had any uninsured in the first place. And yet in California we have more than 6 million uninsured who somehow have failed to buy one. Is it possible that price isn’t the only issue here?
The only difference with HSAs for insurance is that they allow people to put money away to spend tax-free on medical care. But guess what? The people who don’t have insurance in general have low incomes, and are unlikely to have spare money to put away in their HSA. And for that matter many of them don’t have spare money to buy insurance policies. And even if they do, they may not buy one if it’s not compulsory.
And let’s not start on his (and other HSA advocates) inability to do basic math….something else I assumed was tested on the way into business school, but apparently not in the Dean’s office.