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POLICY: HSAs, what are they really?

Buried in this somewhat balanced article about HSAs which postulates that the healthy & wealthy may get most out of health-savings accounts, is this gem from a leading “free-marketer” and HSA advocate:

John Goodman, the president of the National Center for Policy Analysis in Dallas and an advocate of HSAs, said that the tax incentives are appropriate because the accounts serve two purposes. “This isn’t just a savings account,” he said. “It’s self-insurance for health care.”

Meanwhile, veteran Democratic Congressman Jim McDermott tells the other side of the coin. But it’s the same coin.

A bedrock principle of this nation is to pool our resources and share the risk, because it benefits us all. That’s why we collectively support police and fire departments, national defense and a host of other essential services. The alternative would turn back the clock to the early 20th century, when people were wiped out by one moment of misfortune.

Is HSA any different? No. HSAs would accelerate a trend that has seen the percentage of employers offering health insurance drop 15 percent during the Bush Administration. A HSA would be an incentive for employers to transfer more of the burden to the individual. The outcome is inevitable, even for forward thinking, employee-focused, responsible corporate citizens. How long can they last when the competition abandons providing health insurance?

So the left and the right agree—HSAs et al move us to self-insurance or self-pay for health care and away from the idea of pooling. Of course rational people think that for health care with its uneven distribution of risk and costs, that’s nuts. The right (or at least the honest right) just thinks that it’s all OK. But at least we’re all agreed on what it is.

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Steve Beller, Ph.D.Donald BryantpgbMDMatthew HoltTom Leith Recent comment authors
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Steve Beller, Ph.D.
Guest

Tom, I certainly understand your frustration and struggle to be optimistic! And the Marie Curie quote is beautiful. There are several things I see happening in the world today that give me much more hope for a better world than I had just a year or two ago. For example, consider the following observations. 1. Thanks, in part, to the Internet, the world is “flattening” (see Thomas Friedman’s fine book, “The World is Flat”), which enables people from all over to communicate with each other efficiently and inexpensively. The whole blog and wiki phenomenon is case in point. This means… Read more »

Tom Leith
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Tom Leith

I tripped over this, and it seem apropos:
“You cannot hope to build a better world without improving the individuals. To that end, each of us must work for our own improvement and, at the same time, share a general responsibility for all humanity, our particular duty being
to aid those to whom we think we can be most useful.”
— Marie Curie

Tom Leith
Guest
Tom Leith

We agree mom & apple pie are great; the question is how all these things, which require stunning changes in behavior, will come about. Lappe’s “relational self-interest” sounds at least on the surface like like what Pope John Paul II called “solidarity” — an attitude that rejects both the glorification of self and free-riding. Either way, a genuine conversion of individuals is required, which is why I am not sanguine about the prospect of finding Real Solutions(tm). I think what has destroyed community in the USofA are television and air conditioning. Outlaw both and the visions of Lappe and Karol… Read more »

Steve Beller, Ph.D.
Guest

Well, Tom, how’s this for a start: > what health and well-being are How about defining the objectives of healthcare reform as being: 1. Increasing the percentage of patients/people who: • Are better* after receiving care than before care was rendered • Fare better* long-term compared to how they would have done without the care • Take better* care of themselves. * “Better” means: •Reducing the frequency, severity and duration of a person’s physical, emotional, and behavioral problems •Increasing a person’s sense of well-being and quality of life (e.g., having a more positive emotional state, having greater physical comfort, being… Read more »

Tom Leith
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Tom Leith

> To me, this is all about human nature
> and boils down to two things, our
> country’s [Focus and Beliefs]
We are in complete agreement about this. And if we could agree on what health and well-being are, what makes the world better and by corollary which causes are worthy, whether commitment can ever be demonstrated through coercion, and the degree of maternalism proper to the state, then we’d agree on nearly everything. And who knows? We might already. But there is little agreement generally…
Thanks for the pointer to the book; I shall have to read it.
t

Steve Beller, Ph.D.
Guest

“…rugged individualism vanished replaced by the coroporatism deal that lasted till the late 1970s and is still predominant in our organization of most shared services” “Our culture is being eroded by promising Free Cookies” “Congressional budget bill that authorizes a kickback for alternative energy producers” “…the mercantilist booty-capitalism that we’re in now” Frances Moore Lappe’, in her book “Democracy’s Edge,” presents an insightful perspective on such things. To me, this is all about human nature and boils down to two things, our country’s: 1. Focus. What things do we focus on most strongly in our society? Where is our attention… Read more »

Donald Bryant
Guest

Last week Time magazine had an article about a little known clause in a Congressional budget bill that authorizes a kickback for alternative energy producers which is a sham. It pays these guys millions to spray some chemical stuff on coal dust and coal leftovers to make an alternative energy. The problem is, it is just a way to subsidize some rich individuals as the product is useless. The article stated that the money wasted is enough to provide healthcare to the poorest 10 million or so Americans. So, whatever your point of view, there is plenty of waste in… Read more »

pgbMD
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pgbMD

Matthew:
You can go join the US Army and deploy to Iraq and at the same time you would be recouping some of that $200 billion in the form of E1 pay and also display your rugged individualism in the sand box. You would be welcomed with open arms.
Prody

Matthew Holt
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Matthew Holt

OK. For my rugged indivdualism I volunteer to take over my own defense from the invading Iraqi army should they show up any time soon. So I want my share of the $200 billion we’re pissing away there back. That was our 19th century culture Tom, and as soon as enough people got the vote (here and in Europe) the so called rugged individualism vanished replaced by the coroporatism deal that lasted till the late 1970s and is still predominant in our organization of most shared services. Of course the mercantilist booty-capitalism that we’re in now is a third phase,… Read more »

Tom Leith
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Tom Leith

The bedrock principle of this nation (I do not know where Jim McDermott is from) has been called Rugged Individualism, and on a political level this is expressed with a strong bias towards subsidiarity — Federalism is a particular example of this. For McDermott “collectve support” always implies “coerced support”. But this notion is far from universal in our society: witness volunteer fire departments. Our culture is being eroded by promising Free Cookies — just like ancient Greece.
t

Trapier K. Michael
Guest

Goodman is actually mispeaking. HSAs are not “self-insurance” mechanisms. They are savings mechanisms. If the concepts of “savings” and “insurance” have any distinct meanings at all, then we must say that one is not the other, and, more specifically, that savings is storing up personal wealth for the future while insurance is paying someone a fee for taking on the risk of losing wealth that has been stored in the past. HSAs are the former applied to healthcare. As far as “pooling” goes…theoretically there should be a way for an individual to gain through trade with a larger group or… Read more »