"Health savings accounts would be most attractive to the healthy and wealthy, drawing this group out of traditional coverage. That would leave the sick and poor in the higher-cost insurance plans, which then would sink."
"So the Bush proposal actually would cause more Americans to lose coverage than to gain it." http://www.omaha.com/index.php?u_pg=609&u_sid=2116519
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Obviously, Ms. Harrop missed the whole point of HSA benefits. When I owned an MSA (precursor to the HSA), I shopped around. Any costs under $1250 were my responsibility and paid from my savings account. Assuming the whole cost from your HSA savings is very different than a flat $25 regardless of what the procedure costs. When it was time for my mammogram, I asked for 3 or 4 competent providers. When I first asked, no one knew what it cost. Later, I found the range of prices to be from $80's to the $120's. When I needed an ultrasound, I asked about a cash discount -- guess what, discounts are available as providers don't like the waiting and paperwork, either.
Its human nature to shop around and that hasn't been happening with healthcare for some time now. The result has been staggering increases in costs.
Why are prices on HDTV's dropping and healthcare escalating? Reagan was correct when he said "Our system freed the individual genius of man. We allocate resources not by government decision but by the millions of decisions customers make when they go into the market place. If something seems too high-priced, we buy something else. So resources are steered toward those things people want most at the price they are willing to pay." Healthcare is no different.
Health insurance today is pre-paid medical. No self-respecting insurance company of yesteryear would have covered well-baby checkups or childbirth. Young families have babies. Insurance is for 'unexpected loss', not expected losses like the expense of having children. When we allow insurance companies to cover 'expected losses' (like our 'traditional coverage' today), they must not only pay for the loss (medical expense) from our premium, but also add the cost of heat and cooling of the insurance building, the paper and postage of the EOB forms, the salaries of the clerks, the extra employees at the clinic and the agent's commissions to name a few. My first child was paid for with five monthly payment from month 3 to month 9. We had great insurance but childbirth was not covered. If either my child or myself had needed expensive special care after childbirth, that would have been covered. That would have been an 'unexpected loss'.
As more people get HSAs and start to "shop around" for non-emergency procedures, prices will fall for all. When we purchase insurance for catastrophic loss, our premiums are low. HSA major medical policies have lower costs because they practically eliminate the overhead involved with payment while still protecting into the $millions$ for true catastrophic accident or illness. Sometimes the difference in premium between what Ms Harrop calls 'traditional coverage' and the HSA high deductible actually funds the savings account plus has money left over. Even a Medicaid parent would stop twice before heading directly to the emergency ward, if s/he was given a savings account for day-to-day expenses and got to keep any remaining funds. The parent would take the child to the doctor's office like the rest of us had to do.
It seems Ms. Harrop is more concerned about deductions and loss of taxes to the government, rather than making sure folks get healthcare. She seems to have bought into 'tax the rich' until it hurts which often means 'tax the producer'. She should investigate the fairtax.org site for a better mouse-trap with no deductions or exemptions. Current bullet-hole ridden tax codes are killing our tax system and it doesn't have anything to do with healthcare.
She also said "Demonically, the Bush proposal would give employers new reasons not to offer traditional health coverage or any medical benefits at all." But HSA's would allow employees between jobs to afford to keep their low premium insurance and their premiums can be paid directly from their savings. Isn't this better than only allowing COBRA which generally results in 'sticker shock' for employees? Linking insurance to our employer is a fairly new phenomenon and it has wreaked havoc as people change jobs. Lutheran Brotherhood and WOW were insurance companies run as fraternal organizations.
Aside: If you haven't heard of HSAs as an option from your agent, remember commissions are based on premium. If I sell a policy that costs $750 a month and has all the bells and whistles of a prepaid medical, I make about 3 times more in commission than if I sell an HSA policy that costs $250 a month. The $500 savings X 12 makes $6000 available for savings the savings account. If the family involved, opts for a $5000 deductible, their employer can give them full coverage and still save $1000 a year for themselves. As prices fall, so will insurance premiums. The only reason I got an insurance license was to give people the truth about HSAs.
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