Not mentioned much in the current arguments over the health care “crisis,” and never mentioned in the selling of the federal takeover of the system, is the existence of Health Savings Accounts (HSAs). These are special purpose savings accounts to which contributions are tax-deductible for the individual, with amount saved plus interest earned useable for any qualified health care expense.
HSAs are used as an alternative to insurance by the self-employed, freelancers, part-time job holders and others not provided with insurance as an employee benefit or who cannot get conventional health insurance. Some people prefer the HSA.
HSAs are instructive in the healthcare debate because they illustrate an important fact about human behavior: those with HSAs are more cost-conscious and proactively, responsibly engaged in their health decisions than those with traditional insurance, according to an extensive study conducted by Blue Cross Blue Shield Association. For example, 72 percent of those with HSAs track their health expenses, compared to 42 percent covered by insurance. 24 percent discuss health expenses with providers and may shop and negotiate, vs. 18 percent covered by insurance. When it comes to preventive care, HSA account holders win too; 69 percent have regular check-ups vs. 62 percent covered by insurance. 25 percent of HSAers exercise regularly vs. 14 percent of those insured. In short, those paying for health care with their own money are much more involved and responsible in taking care of themselves and controlling costs than those receiving insurance as an employee benefit or otherwise covered by insurance.
Duh. This is why casinos give you chips – so it doesn’t feel like you’re spending money. It’s why rental cars are so badly abused: not my car.
Let’s say we shift from private to public health coverage, give the government control over another 20 percent to 30 percent of the economy, and have it tax, tax, tax in order to give health care to everybody. We can be certain of one thing: that careless consumption of ill-health care will go up, self-disciplined behavior to prevent illness and injury will go down and individuals will pay no attention whatsoever to cost control.
The Amazing Ozama promises mysterious, magical cost savings to be had by replacing paper files with online medical records. Other, less specific legerdemain will pay for the trillion dollar+ yearly costs. Even if he really believes that, he’s ignoring the certain boom in demand and consumption. The other re-distribution of responsibility and earnings schemes run by the government – Social Security and Medicare – are in looming crises, fundamentally bankrupt. There’s no reason to assume this one can be any different. It is a bankruptcy in the making.
The answers to the admitted flaws of American health care are not to be found in socialism and government bureaucracy, control, transfer of responsibility, and confiscation of earned income. If it were to achieve equality of care, care would be equally horrible; poor quality, rationed care for all, at substantially higher costs.
The right answers lie in the opposite direction. The American direction. Getting health insurance out of both government’s and employers’ hands (like all other insurances), creating unrestricted competition, private and individual ownership, mandating having a minimum level of coverage (just as is done with auto insurance or home insurance if if the consumer borrowed money for the purchase) if we must, and giving equal tax deductibility for all. That way lies self-reliance and responsibility, not dependence on the socialist state.
The worst situations: catastrophic, major medical problems or end of life care wiping out individuals’ or families’ finances and forcing them into bankruptcy; children not getting appropriate health care; people with coverage in place cancelled when they become ill and need coverage must be addressed. But doing so does not warrant a monstrous power grab with the federal government taking control of the entire health care system.
This is part and parcel of a bigger discussion, a bigger battle. What is the American way? What is inherently un-American?
Maybe its part of an even bigger discussion: what causes a society and a nation to sustain itself, what causes its destruction?
A piece of advice from
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.
