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