The Health of a Nation

I’ve been laying off John Hood, stage manager at the John Lock Foundation Puppetshow, for the past few weeks because he hasn’t had anything interesting or relevant to say. But today he’s back to his usual form, this time flacking a CATO Institute Report on the wisdom of Health Savings Accounts. As you would expect from a free-market Libertarian think thank, this particular report has all the earmarks of a Puppetshow “report:” foregone conclusions based on ideological bias, sketchy data, weasel words and false choices.

This is the concluding paragraphy of the report. I encourage you to go read the whole thing - both to get a better understanding of HSAs and to see what a high-class con-job looks like in black and white.

Health savings accounts are an important step toward restoring market forces and reducing government involvement in the health care sector. Proponents expect that HSAs will make medical markets more efficient by encouraging patients to be more parsimonious consumers. There is some evidence that this is happening. Many of the criticisms that have been lodged against HSAs are unfounded. However, not all criticisms can be easily dismissed. HSAs are not a panacea, and the rules governing them make them less appealing than they could be, particularly to sick or low-income individuals. Those rules should be relaxed with an eye to letting individual consumers control all of their health care dollars and decisions. Whatever the strengths and weaknesses of HSAs, they are now a reality and appear to be growing. Nonetheless, it is important to build a constituency for preserving and expanding HSAs in order to forestall legislative or regulatory efforts to undermine them. The most important thing Congress could do to encourage HSA growth would be to allow HSAs to be coupled with any type of health insurance. That would allow millions of Americans to open HSAs without giving up the coverage they now have. Further, Congress should allow workers to take the full amount of their health benefits as a cash deposit in their HSAs, and then allow workers to use those funds to purchase health insurance of their choosing from any carrier they wish. Those steps would give workers ownership of every one of their health care dollars, solidify support for HSAs, and truly put consumers in the driver’s seat. (emphasis added)

Only a free-market wacko could conclude that the best way to fix something that is fatally flawed is to relax rules to create even more of the problems they’re trying to fix. In this case, the two fatal flaws of HSAs are clear: they suck for people who are poor and really sick.

When you’re blinded by the light of free market fantasy, it’s impossible to see and appreciate the way the world really works. And when John Hood and the CATO Institiute try to put bright red lipstick on the HSA pig, all we get is an uglier and fatter pig. Because the truth is, the entire system of healthcare in America is built on the shaky ground of free-market delusion. Rather than being driven by a commitment to well-being of people, regardless of their job status, health, income or intellect, it is driven by a single-minded obsession with corporate profit. And HSAs do nothing to address that issue.


I've had a lot of admissions of

ignorance this week. Most are on policy issues. I'm just going to have to leave the nuts and bolts of these things up to the rest of you b/c I'm up to my eyeballs in other research.

Here's the part that jumped out at me....

Proponents expect that HSAs will make medical markets more efficient by encouraging patients to be more parsimonious consumers.

I want to know how exactly. More parsimonious consumers????? (The word means excessively frugal for those who don't know.) What, so we are supposed to decide between a procedure/medication that will save our lives and having a few more dollars in our HSA for a rainy day when this is the effing rainy day? That just doesn't make sense.

If it doesn't work for the sick and the poor then it's just another broken system.

Maybe I just don't get it and my mind is too busy with other things to delve in and give it a shot. Sorry, A. No intelligent discussions from this corner today.

Vote Democratic! The ass you save may be your own.

Medical Terms by the conservatives! Not Real Libertarians?

I want to know how exactly. More parsimonious consumers????? (The word means excessively frugal for those who don't know.)* SD

SD! That means if you are a conservative, you take the
generic Kroger discount pain killer baby aspins for the
inpending Bird Flu. Also Krogers has a senior discount day
in which you can purchase the baby aspins at even more discount.

The Kroger personal refers to this day with another name
" God waiting discount room"

Health & wealth

Individuals don't stand a chance self-insuring with health savings accounts. A 3 mile ambulance ride alone costs $450 "list price".

Insurers get medical "list prices" knocked down and even then copay fractions can be a burden for those lucky enough to find affordable basic insurance with high deductibles.

The only thing the "invisible hand" of the "free market" does is pick your pocket.

I want some

of whatever you and Robert are drinking. You guys have maxed out on waxing poetic today. Nice, tight summary of the lunacy of HSAs.

HSA + high-deductible plan

Blue Cross is offering low(er)-premium plans with high deductibles and HSAs. The idea is that you can contribute tax-free up to your deductible for the year (usually $1100/person). If you're young and healthy, you can save up, because you still get the BCBS preferred provider rate, though you pay it in full (up to your deductible.) This would be a good plan for a single or couple in their 20's whose employers don't provide health insurance, and who are generally healthy. The money you don't spend stays forever, so when you do get sick (or old) it's there as a security blanket. I've thought about getting my husband to ditch his group plan from work (I think he's the only person left on it) and signing up for one of these. I'd need to see more numbers and some actual figures before making a decision, though. [I've almost got him to agree to ditch the dental benefit, since it's not worth it. What we pay in premiums every year is more than they pay out.]

But it's absolute crap if you're already sick or have chronic conditions or can't afford to put $100/month into the HSA, which is the population these reforms target, naturally.

I have a beautiful social-democrat dream of basic health care (annual exams, dental cleanings, eye exams) being paid for, and necessary procedures (cardiac caths, preventive/wellness programs, disease management) being covered at a low cost to the patient, and non-necessary procedures being paid for in full by the patient. It's the "give everyone a Hyundai" model, where we currently have the "a few people have Maseratis, a few more people have Lexuses, a bunch of people have a Toyota, and a whole bunch got nothin" model.

It'll never happen. The American psyche is too focused on the individual to consider the group.

Thanks, C. Diane.

I confess to having a mental block in the health insurance department. It all seems like a scam to me, and I have too many friends who are out of work and can't even think about $100 a month for anything like this.

I also share your dream of basic care and am not quite so pessimistic as you. Everyone with half a brain knows our current system is a disaster. The only question is taking action to dump it in favor of a more workable alternative. We need a "Manhattan" type project to take such a big step, and one of these days we'll elect leaders either at the state or federal level who are willing to take that on. One of these days.

Health insurance is a scam, really.

I mean, why have insurance for things you *know* you'll need, like annual physicals, eye exams, and cleanings? Cover those with taxes. Insurance should be for emergencies.

I'm pessimistic by nature, but in this case also because I work with physicians, who all want to know a) how it will affect their paycheck and b) how it will affect their paycheck.

There have been task forces to design sweeping reforms -- there was one for the Clinton-era healthcare policy, which never got off the ground. There were some back in the 50's or 60's, too.

We need a mindset change of tying health coverage to employment, as well as a shift to a single-payer system, which would reduce paperwork and administrative costs (which currently comprise 20% of all healthcare spending) as well as overall costs. Because if insurers just pay for things, there's no motivation for providers to keep costs low.

In order for nationwide reforms to happen, smaller-scale reforms need to happen first. A single-payer plan in a state, which would have to be proven in a smaller setting, such as a several-county region, first. When there's data to support that the world didn't end in a half-dozen counties, it could go state-wide. Then when the world fails to end yet again, it could go regional or national.

Of course, that leads into the ugly question of whether we think the federal government is capable of enacting policy that doesn't suck big hairy ones. Medicare Part D is a prime example of shitty federal policy, influenced far too heavily by business interests. So many "gimmes" for Big Pharma it makes me ill.

Why do you say such hateful

Why do you say such hateful things to John Hood? He is a good man, and he has a family. Shame on you for being such a hate monger! He is good citizen.

Fair & Balanced Blogging?

Why do you say such hateful things to Anglico? He is a good man, and he has a family. Shame on you for being such a hate monger! He is good citizen.

Gaming the HSA systems

It is too easy to "Game" these systems.

For example when young and single and healthy you opt for the HSA and build a pile and let it start to compound. Get 10 years of 2,000 dollar a year premiums put aside and when you retire 35 years later you have several hundred thousand bucks. Meanwhile you are out of the normal group insurance pool for those 10 years - all which stay in are sick and those who know they will get more then they put it...

When you get married - plan a family - wham re-join the plan and enjoy all the perks while you consume services... you never paid in when you did not need the services so you are killing the plan when you join back in when you enact your PLAN to spend on services covered by the non HSA plan...

Its simple math -- the good risks leave and the expensive risks - those who do not take care of themselves because they are poor, already sick, or unhealthy end up staying in --- guess what rates have to rise or the plans go broke.

All the good risks get "Cherry Picked out" --- you end up with socialized medicine via indigent care models. The plans go broke or people do and the feds pay anyway.

Its a total boondoggle – A better way is to offer high deductible healthcare plans with lower premiums. Keep the premiums that do get paid in the system to help offset the “Bad” risks.

Letting the premiums escape the risk pool is a disaster - People will absolutely float in and out of these plans and “Game” the systems to exploit those who do not have the financial freedoms to do likewise.

The whole premise that we can control what we pay for medical services is ridiculous. Doctors charge what the insurance companies and feds reimburse - you think if I pay the rate changes?

The premise here is that we all will feel sick and opt to stay home and do not go to the doctor so we can preserve our HSA wallet. It will in no way lower health care costs. What bargaining power do I and other individuals have against the medical establishment? Are we saying our boycott of services will make them lower process so we consume -- are you kidding?

Bad policy making and a grossly over simplified solution to a complex issue. There is no “Magic Bullet” and this problem of rising medical costs will take a strategic application of a whole host of policy tools to control.

Yes – I am saying it means more government not less.

I wish the followers would lead... With a voice so strong in would knock me to my knees...