POLICY: HSAs–The master speaks

Uwe skewers the HSA as a regressive tax shelter that impacts only the poor over at Health Affairs Blog. This time the cracks are at Bloomberg readers rather than certain crank health policy shops in Dallas, TX but it’s still a beautiful read.

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  1. gjudd, it seems that (1), (2) and (3) are designed to cleaverly fund the present healthcare cost structure of double digit compounded yearly increases while sheltering some income groups? Do you also see cost controls implemented at the same time? My problem with all of this HSA’s/HDHP’s discussion is that it only seeks to find ways to fund the present system – which by all accounts is unsustainable.
    “If the goal of the HSA/high-deductible construct is to force patients to have “[fiscal] skin in the game” – to use that dubious but common phrase — so that patients think more carefully about the benefits and costs of proposed treatments, then an argument can be made for lowering the deductibles and adding coinsurance instead.”
    This seems to back my questioning of Barry Carol’s high deductible cost control argument. But again we argue about what knowledge the patient is able to acquire and use to make rational medical decisions that control overall system costs. This is the specious consumer directed healthcare argument presented by those who want to cling to the present system and have their vested incomes protected. I think patients should be able to choose doctors and care, and question treatment, but only to get best care, not to control costs to any great extent. Cost control should be the responsibility of, “the system” which so far does not want to accept any responsibility.

  2. Matthew, as always, your taste in health care thinkers is nonpareil, but here your precis of the thinker’s actual thinking serves up a mouthful of spinach and spumoni.
    Rather than intimating simply that Reinhardt has fulminated against the horrors of health care that actually costs recipients something, which he has not done in the subject post, why not also share his musings on alternative cost-sharing formulae, which he includes late in the piece?
    His designs admittedly do not appear to champion either single payer or even universal coverage, but might still generate some stimulating contributions from your readership:

    Making the HSA/high-deductible construct less regressive: Should policymakers want to make the HSA/high-deductible construct considerably less regressive, they could do so by modifying three parameters of that construct.
    (1) The maximum out-of-pocket stop loss visited on individuals and families could be made to rise with disposable income (which raises the delicate question whether corporate executives who are paid annually in the millions of dollars should have any health insurance at all).
    (2) Instead of making deposits into HSAs tax deductible, any American individual or family, regardless of taxable-income level, could be granted a refundable tax credit of, say, 30 percent.
    (3) Chronically ill individuals and families could be granted risk-adjusted subsidies, so that the chronically ill are not forced to bear the entire maximum risk exposure under their health insurance out of their own resources.
    With these modifications, the HSA/high-deductible construct probably would meet much less resistance than it has hitherto.