The Health Savings Account, or HSA, is the centerpiece of conservative health reform today. Much as the new Medicare prescription benefit has descended on seniors, the HSA is a latest healthcare wrinkle that will probably find you whether you want it to or not.
An HSA is a personal savings account that can be funded tax free. The money in the account can then be invested, if the owner prefers, for growth. Any money, whether deposited or interest made on prinicpal, can be applied to healthcare expenses, again tax free.
Sounds pretty benign, but here’s the catch – to qualify for such an account, you have to enroll in a health insurance plan with a high deductible, what the government calls a Qualified High Deductible Health Plan (QHDHP). This means a plan with a minimum deductible of $1,100 for an individual and $2,200 for a family.
High deductible health plans have been around for a long time, and the can make sense for young, healthy individuals who do not see the doctor much. For a cut in premium of several hundred dollars a month, the insured assumes the cost of routine visits. Insurance only kicks in when there is a serious expenditure, such as an appendectomy or orthopedic surgery for a torn knee ligament.
Advocates say HSAs will help patients in several ways. First, they offer a tax break to those who are willing to assume some of the cost of their healthcare through higher deductibles. Secondly, HSAs will allow employers to offer health insurance to more employees, because the premiums employers pay for high deductible plans are so much lower. Finally, they argue that consumer driven healthcare, that is, healthcare in which the patient decides what to buy and how much he wants to pay for it, will drive healthcare costs down. A patient who has to pay for a tetanus shot out of his own pocket, for example, will shop around to find a good price. The weakness of the current system, HSA fans argue, is that patients never see the entire bill. They are not aware of the full cost of their care, and so have no incentive to shop around, or to dispute unnecessary expenses.
As a practical scientist, I am not against giving the HSA idea a whirl. HSAs will probably reduce healthcare expenses a little and will likely make insurance more affordable for some people. I am in favor of trying anything that will improve healthcare. The problem is, I think the benefits of HSAs are limited, and that this concept is only a temporizing measure that may slow but will not prevent the long term healthcare problems this country faces. In the interest of brevity, I will not tackle every concern I have with HSAs now, but will spread them out over several articles. I will spell out my biggest concern here and now.
HSAs will not extend healthcare to everyone. If we assume for the moment that HSAs will in one way or another reduce health costs (which is not proven), it follows that the savings can be used to insure more people. This is a good thing, but “more people” is not everyone. Though HSAs will make it easier for workers to afford insurance, it does nothing for the unemployed. The insurance may be cheaper, but you still have to buy the it, or get it from an employer. Let’s say a full policy costs $600 a month and a high deductible plan costs $350 a month. A premium of $350 a month, or $4200 a year, may be an affordable option for someone who drives trucks for a living, but for a cashier at Denny’s who makes minimum wage, it may still be unaffordable. Extending healthcare coverage to a greater number of people is a good thing, but not at all the same as extending healthcare coverage to everyone.
Here I think is the greatest disconnect in the healthcare debate. There are some people who think health insurance is a personal right that should be extended to everyone, regardless of their ability to pay. There are others who think it should be available to everyone as a choice, but it should not be legally mandated. The choice people believe that our only responsibility is to make access to healthcare inexpensive enough so that everyone has a fair shot at getting it. The rights people think as long as someone is left out, for whatever reason, that injustice is being committed.
I am a rights person.. As a doctor, I spend most of my life’s waking hours helping people overcome the scourge of disease. The care system I am part of can help anyone and everyone, and I am opposed to any approach to healthcare that would leave anyone out. It does not make sense to me that a system dedicated to helping people should select who it helps depending on his or her ability to pay.
Purists like to look at the Constitution and the Bill of Rights and say there is no mention of healthcare as a personal right. No, there is not. But our country is built on the assumption of equal opportunity and social mobility. The freedom to compete on equal footing with others and rise out of poverty is the very heart of the American Dream. We do not consider it just that a child who grows up in the ghetto should be required to go to a terrible public school while one who lives in a wealthy suburb gets to go to a good one. This does happen in America, but that is not to say that we endorse it as right.
In the same way, access to quality healthcare is very important if individuals are to compete on a fair playing field. Why would it be fair that a man from Upper West Side New York can have his asthma properly treated, allowing him to continue to work, while a minimum wage earner in the Bronx goes untreated, resulting in missed work days and eventually in the loss of his job?
From a Constitutional standpoint, it is not obvious that everyone should have healthcare insurance. But from a moral standpoint, it is. Allow me to turn the question on its head: If everyone is not entitled to health insurance, who should be excluded? Should the lazy, or the uneducated, or the immoral, or even the downright evil be excluded? In out country even imprisoned murderers have access to doctors. It is one thing to say that a lazy unemployed man should be denied luxury housing, or a car, or a steak dinner. But how long, in the richest nation in the history of the world, should he be allowed to cough up blood before he gets an X-ray? If the U.S. can’t afford to care for everybody, then hang it up – no one can. The problem is, poorer nations can afford it, and they do.
Giving everyone the opportunity for good healthcare isn’t just good ethics. It is good business. As I noted above, a large part of the American Dream is about giving everyone who wants to try a fair shot. Good health is a basic possession that frees people who want to better themselves to go out and do just that. By giving everyone healthcare access, we unloose the full creative force of America. A healthy workforce is a productive economy. I think even the staunchest conservative would have to admit that our economy would benefit from a work force that is medically fit.
And that is the problem with the HSA. It offers healthcare to more people, but not all of them. Both morally and economically, it falls short.