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.