I just received my September edition of The Atlantic with a great article on a different approach to health insurance reform.
David Goldhill writes in How American Health Care Killed My Father:
A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care -- with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.
He goes on to describe an expanded and less restrictive HSA type account for the "routine care" and "major, predictable expenses" (such as pregnancy). The "massive, unpredictable" expenses would be for things like heart attacks or strokes or accidents.
His claim is that such a system induce:
- transparency in pricing and quality
- providers to improve quality and efficiency
- patients (consumers) to be more informed shoppers for health care services
While it had some appeal, it doesn't appear to get at root problems ... unemployment, for example. Nor does it deal with non-compliance. One of our regulars recently said he didn't have insurance and wouldn't get it under any circumstance because he's young and healthy.
So what if he falls and breaks his back, having had no income to build up an HSA, and no cash to cover his treatment? How does Goldhill imagine we'll deal with that?
I have to go back and read the article again.
The max HSA contribution for individuals is $3000 annually
and about $5500 for a family. I suppose if you start young (us older folks wouldn't have time to create a large sum) you might be able to accumulate a reasonable amount to help pay medical expenses and create a retirement fund if your medical expenses didn't eat up the HSA. OTOH putting one's money in any savings vehicle where access is controlled by numerous onerous tax laws and penalties often turns out to be a problem. Some of life's difficult situations don't consider whether or not you're 59.5 years old...and so on. As an aside, I wonder what happens to a HSA if there is a divorce? NC is not a community property state. Something else for folks to litigate?
My reading tells me HSA's are not heavily utilized for a variety of reasons. Those who do use them are often earning 2X+ the median family income and can better afford to put the money aside. If one is scraping by, where does the money come from? Certainly won't help anyone who has a pre-existing condition or who otherwise isn't currently in great health
My sense is that HSA's have a place in the spectrum...but are not the answer for most.