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December 01, 2009
What Will The Senate Health Care Bill Do To Health Savings Accounts
Senators like to tell us how their bill will help the free market. They say the "public option" or government run plan would just be another choice on healthcare to compete with other insurance plans. They say the government-run health care exchanges will make it easier for individuals and employers to choose the best health care plans.
But the reality is quite different. The Senate health care bill would severely limit choice. And in one key area, it limits choice on Health Savings Accounts which allow individuals and families to save their money tax free and use it for their healthcare.
The Reid bill in the Senate assaults Health Savings Accounts which allow individuals to accumulate tax-free funds for future medical expenses when coupled with low-premium, high-deductible HSA insurance plan. The Reid bill changes tax provisions to make Health Savings Accounts less attractive, but the real threat comes via increased regulation.
HSA insurance plans will likely be barred from the insurance “exchanges” that will demolish and supplant today’s individual market. Employers will also find them more difficult if not illegal to offer once the government has new powers to “define the essential health benefits” that all plans must eventually offer. Plans that focus mainly on catastrophic health expenses, instead of routine procedures, aren’t generous enough for Democrats.
Health Savings Accounts enhance choice. Citizens can choose the insurance plans to couple with their Health Savings Account and customize them to cover what they need. They can then use the money they put into their tax-sheltered Health Savings Account to cover a lot of HSA qualified expenses that normal health insurance plans don’t cover... like vision, dental, or Orthodontics.
What’s more, with an HSA people are essentially spending their own money. Meaning that they’ll be more frugal in seeking care, something that will in turn drive down health care prices through competition.
If we really wanted to introduce more choice into health care, if we really wanted to drive down prices, then enhancing things like Health Savings Accounts is what we should be doing. Not hamstringing them.
But that’s presuming that those pushing this health care bill really want you to have more choice in health care. Which, sadly, they do not.
Posted by Wiley Long at December 1, 2009 05:23 PM