29 May 2010

So long to that

HSA, not yet gone, but certainly forgotten

This sort of reform was overlooked very early in the process (Wyden-Bennett was basically a plan to force everybody to get a private HSA for example, more or less what Singapore does). The positive side is that final law didn't quite kill it. Yet. Which means that there are businesses and individuals still getting these types of plans. The negative side is that the door is wide open to kick them out of the marketplace as an option for consumers who seem to feel they need health insurance. If, or more likely when, catastrophic health coverage of the type aligned with health savings accounts is no longer considered as meeting the government's mandated level of coverage, then there won't be HSAs and their associated low-cost insurance plans. This is personally inconvenient for those of us who have them, but it's also significantly more expensive for the system as a whole. One reason people get them is that their health expenses are traditionally low enough that they can afford them out of pocket. This, in light of rules requiring (finally!) transparency of medical care prices but not for two years, would be pretty easy to take care of routine and preventive medical care then by essentially paying tax-free cash for most of it, reserving the insurance itself for true medical emergencies (serious injuries, dread diseases, major surgical procedures, etc).

If that's not an option, expect health care spending as a percentage of GDP to keep climbing and placing more burdens on taxpayers. People who have made these market choices and are pleased enough with them over their alternatives need to start (shudder) lobbying in order to keep the mandated forms of health insurance out of and away from the HSA market.

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