Bush HSA with NASCAR stickers on the Podium?

Here we go again. One more SOTU speech, followed by more tickets only, screened ahead of time, soft ball questions from selected audience members; and, only photos from the White House PR photographer presidential speeches from the Potemkin Heartland. New subject same old format. The Health Savings Accounts the president will no doubt haul out tonight to make our "health care more affordable" will be nothing but "sop to Wall Street part deux." If the president were really honest the podium from which he speaks would have decals on it from Citigroup, Anthem Blue Cross, and US Bancorps. Maybe he'd like to have Number 43 with flames and some striping, and the bank's logo positioned so that it would appear in every rear camera shot? Some reasons for skepticism below.

HSA's are wonderful idea if you don't have small children, never intend to have any, or don't intend to repair them when they fall off their bicycles.

 Why? Kevin Drum summarized the problem:  "Technically, the idea behind HSAs is that you put, say, $2,000 in a tax-free account and then buy a health plan that doesn't pay anything until your expenses exceed $2,000. You pay for your normal healthcare expenses by drawing money out of the HSA, and if there's any left over at the end of the year you get to keep it." Washington Monthly

One "Look Ma, No Hands" move on the bike, and whoops there goes the HSA!

So in order to make the President's plan work, you have to buy a high deductible health insurance plan, put money into an acccount from which the management may draw fees, and IF there's anything left after the Bike Debacle gee whiz "you get to keep it."  But, it wouldn't even take a bike wreck to decimate your account. How about annual check ups and inoculations for a family of four? In fact, the more children you have the less likely you are to have anything left for your own medical needs as you meet and greet the debilitating effects of aging.   The president's plan actually penalizes you for preventive medicine.

Who would want this kind of system? Eric Dash explains:
"Banks, credit unions and money management firms are now quietly positioning themselves to become central players in the business of health care, offering 401(k)-type accounts to cover future medical expenses.

Bank of America, J. P. Morgan Chase, Fidelity Investments and hundreds of others are hoping to capitalize on the latest wrinkle in medical care paid by consumers: health savings accounts, which have been around since 2003 but are moving to the fore of the national agenda in anticipation of the State of the Union address on Tuesday.

These supercharged checking accounts, which must be linked to a high-deductible health insurance plan, allow consumers to invest their own money for current and future medical expenses and have it grow tax-free. ...

They are the centerpiece of President Bush's plans on health care, just as private accounts were offered as a Social Security fix." New York Times/Herald Tribune

Who wrote the plan? No surprises here:
"Banking lobbyists have met with White House officials at least three times over the last year to discuss the rules governing health savings vehicles. But until recently, most have been shy about their interest in such plans. Now, they have established a lobbying group, the H.S.A. Council, and are spending millions of dollars to roll the plans out." Herald Tribune

Fees and Fees and More Fees  not only does the management group get to withdraw fees from your HSA for their annual services, but the banks can get into the act too. Why are they so interested? There's money in those swipes!

"Even without the lucrative investment management fees, bank executives like Daniel Kelly, manager of H.S.A. services at U.S. Bancorp, say health savings accounts are attractive. Banks make money each time a customer swipes his debit card at a doctor's office. Payment processing alone could generate some $2.3 billion over the next five years, the DiamondCluster study estimates." Herald Tribume

From all this we can assume that besides the obvious fact that the HSA's do absolutely NOTHING for people without health insurance, who can't afford it in the first place. They don't even work for people who can.

Your HSA will work nicely for you--if and only if you don't need it in the first place.

For additional information see:
Uwe Reinhart on HSA's OrangeClouds115 Diary
National Doctor's Group opposes HSA proposals PNHP Nick Diary  point by point discussion of the problems with the proposal
War on Health Care Looms Captainebo
Two Stories of HSA Failure dead head

•  Retitle, please

  This is much more important that what your title implies, and you do a much better job of summarizing the issue than what your title suggested to me. It's not just about Bush scoring points tonight and you do an excellent job of explaining that.

  Do I have a suggestion for a better title? Nope. Hey, you're the one that writes well!  ;)

  by Jeff Boatright on Tue Jan 31, 2006 at 03:32:58 PM PDT

  •  I'm terrible at titles!

    and even worse today at getting the blockquote to work--which it wouldn't.

    The Dash article is really a must read.

    If you can afford the high deductible--then why do you need the HSA? Unless you want another tax break??

    If you can afford the preventative medical treatment and checkups, then why do you need a high deductible?

    The bottom line is that the insurance companies believe that if you have more health insurance you'll just "squander" it like a kid with too many candy bars.  Like we all want to sit in a Doctor's office reading 1994 editions of Field and Stream.

    by greatbasin2 on Tue Jan 31, 2006 at 03:37:22 PM PDT

•  Great

  Another scam written by lobbyists to steal our money.

  by Tux on Tue Jan 31, 2006 at 03:38:19 PM PDT

  •  three times in the last year

    The lobby folks show up three times in the last year to "help write" the proposals.  This seems par for the course with the Bush Administration. Pay for Play from the banking and health care industry?

    by greatbasin2 on Tue Jan 31, 2006 at 03:39:43 PM PDT

•  We already have healthcare spending

  accounts that come out pretax and can pay for just about anything.  So, isn't that the same thing, except without the fees?  It works for us.

  The only Republican part that I see is what happens with leftover funds at the end of the year - you forfeit them.

  Yikes.

  If you care about healthcare, I posted a diary earlier about the Medicaid cuts and loss of handicapped services.

  by chuckles1 on Tue Jan 31, 2006 at 03:38:37 PM PDT

  •  right

    remembering the Social Security bamboozle--we have private retirement accounts called 401K's. But the banking/investment industry wanted another pot of money to play with. You're right, this is the same kind of angle from the Bush team: You can go out right now and set up an HSA for yourself if that's what works for you.

    The problem is that the HSA accounts now are drawing enough money to keep the investment houses happy and they'd like a bigger influx of money.  This has precious little to do with either your health care, mine, or anyone elses. It's all about the banking industry...and the health insurance companies that are not chartering banks to "manage" the new accounts.

    Bamboozle Palooza Part II.

    by greatbasin2 on Tue Jan 31, 2006 at 03:44:09 PM PDT

•  I've had a HSA since July

  with a $2000 deductible PPO plan.  Fortunately, my employer kicks in $1800 in HSA deposits, so I'm only on the hook for $200 and since I'm single and healthy, it's not such a bad deal for me.

  Still it's a good deal for the insurance business -- our insurer, United Healthcare, even started their own bank to capitalize on the opportunity.

  by 3waygeek on Tue Jan 31, 2006 at 03:42:36 PM PDT

  •  But don't you pay full price for the care?

    When I get something paid by my PPO, the PPO gets 65% knocked off the bill. But when I pay for something myself, I pay "full price."

    Am I wrong, or are HSAs just a way to break up the combined buying power of large groups of people and dumping them out on the market where they have no ability to negotiate cheaper prices?

    by emptywheel on Tue Jan 31, 2006 at 04:09:58 PM PDT

    •  If I actually saw a doctor

      I suppose I might pay more under this plan.  I haven't seen a doc in a few years, but I do see a dentist regularly -- the dental side of our HDHP covers most of the common procedures (x-ray, cleaning) without requiring me to dip into the HSA.

      by 3waygeek on Tue Jan 31, 2006 at 05:37:31 PM PDT