Friday, September 03, 2004

Health Savings Accounts are a bad idea.

Why you're right:

1. It will make health insurance more expensive. Health Savings Accounts (HSAs) allow workers to save money in a tax free account to pay for deductibles, co-payments, and uncovered medical costs. But there is a catch. Currently, yearly deductibles average around $300 for individuals and $600 dollars for families. Health Saving Accounts must be accompanied by an insurance policy with a $1000 deductible for individuals and $2000 for families. Nearly ¾ of employers are expected to offer the accounts by 2006 as a mechanism to "shift some of the cost of health care to workers." (USA Today)

2. It will cause people to lose their insurance coverage. According to M.I.T. economist Jonathan Gruber "The combination of HSAs and the availability of the new tax deduction to workers who obtain health insurance in the individual market (rather than through their employer) would almost certainly be regarded by some employers as lessening the need for them to offer coverage." As a result, he estimates 1.2 million people will lose their coverage because their employers stop providing it and they can't afford to purchase it themselves. (CBPP)

Why they're wrong:

President Bush touts HSAs as part of his "ownership society." According to Bush the tax free accounts will allow people to own a piece of their health care. That makes no sense. You don't want to own your health care you want to receive health care. The whole point of health insurance – and the reason why it is so attractive people – is that it allows people to share responsibility for the cost of their health care.