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November 01, 2009
Health Savings Accounts and Obamacare
Health Savings Accounts could very well be the answer to our current healthcare mess. They are tax-exempt accounts which allow employees and employers to contribute thousands of dollars annually toward paying for health expenses. In conjunction with high-deductible health insurance, most people much less in premiums than a regular insurance option. Often, an employer will save enough to pay the deductible amount into the Health Savings Account, and still be able to cover the high-deductible health insurance plan's premium.
In other words, if all Americans got Health Savings Accounts overnight, we would immediately begin saving about one-third of our health care spending, and would instead put that money away for when we need it most. The results...
This would increase family savings (a good thing) and would drastically lower the cost of healthcare for everyday Americans (an essential thing). Additionally, Health Savings Accounts bring price transparency as well, since all health care costs—up to the high deductible amount have to be bought by the consumer, not the insurer, again encouraging shopping around, competition, higher quality, more innovation, and lower prices.
Unfortunately, Health Savings Accounts and HSA Plans are also under the gun in the house bill released: Health Savings Accounts will have to shoulder a medicine cabinet tax. That means while you used to be able to buy over-the-counter medicines with tax-free account money, you’ll now only be able to use after-tax dollars. The bill raises the additional tax on non-qualified withdrawals from a Health Savings Account (raising the tax from 10% to 20%). Health Savings Accounts will effectively be killed by a final provision, which requires that most plans provide first-dollar coverage for most services.
So, while Health Savings Accounts could save the system, our government is instead trying to kill them without thought of consequence. Pelosicare would destroy one of the best aspects of the current system.
Posted by Wiley Long at November 1, 2009 11:12 AM