ABC's 20/20 co-host John Stossel, a former consumer advocate who turned into a cranky libertarian - much like Dennis Miller, presented only one side of the story about America's healthcare system during a recent show.
While he tried to sell how great our current health system is, he tried to also sell a load of crap about Health Saving Accounts (HSA). HSAs are a sham that will hurt people unless you educate yourself.
According to Media Matters:
During the program, he interviewed five advocates of free-market approaches to health care but only one advocate of increased government-mandated health coverage.
....Stossel and his interviewees advocated Health Savings Accounts (HSAs). But Stossel aired only a five-second criticism of HSAs from an unidentified person and did not note that several progressive groups oppose HSAs.
In health-care special featuring mainly free-market advocates, Stossel endorsed Health Savings Accounts
This is an issue I have some knowledge about and hope more people see through the scam of HSAs.
Basically a HSA holds some money, usually not more than $1000, provided by the plan sponsor. In return you have to have a "High Deductible Health Plan" where the deductible is from $1000 or more for an individual to $2000 or more for a family. I have seen some plans that have $5000 to $10,000 deductibles.
Plan administrators and supporters of these so-called "Consumer Directed Health Plans" claim that they are "empowering" people to shop for medical care. They remove the usual plan rules and oversight and you can pretty much see any doctor and get any treatment you want.
Sounds great, right?
A deductible is the amount of money *you* pay out of pocket before the plan pays anything. They may give you a tax free $1000 but that is a lot less than what they would pay under a regular plan that has co-pays.
HSAs shift almost all the costs to the user. The only people who can benefit are single people who never get sick and the plan sponsors who make you pay more of the cost. In most cases you still have to pay a premium which is deducted from your paycheck.
Supporters of such plans say that it would open competition and lower medical costs.
An average person should see it is really the difference between buying groceries at a chain like Kroger's or down at the corner market. Kroger will be cheaper overall because of their bulk purchasing power while Fred's Market has to pay what the price is and pass that on to you. For example I can get a frozen dinner at Kroger for $2.00 or less depending on any sales but that same dinner at Fred's Market costs me $2.99 or more.
There is no incentive for a medical provider to offer an individual a lower price no matter how many providers there are. A risk pool of one is a lot different than a risk pool of hundreds or thousands. That's the whole point of group health plans. The plan is able to get a better price because of the large number of people in the plan.
The last time I went to the Doctor she charged my insurance company $150 for the visit, the contracted price was $60 and I paid $15 co-pay. Does anyone really think the Doctor will charge me $60. They will charge me their cost and a profit built in. That is common business practice. You can also bet other Doctors in the area will charge the same. They are looking to make as much money they can with the fewest number of customers. Medical providers aren't into a volume business.
My cousin is a chiropractor and he tells me that he has to see a ton of patients just to cover his costs since insurance plans pay so little. He wishes he could work less. An HSA plan would let him work less because he would jack his prices up so that his break even point would be lower than it is now.
Healthcare is not a product. It doesn't operate on simple supply and demand. We are talking about people.
The AFL-CIO also list some reasons why HSAs are a bad idea:
HSA plans will discourage preventive care, ultimately increasing the cost of health care in the United States.
HSAs and high-deductible plans don't prompt individuals to become "smarter shoppers" for health care. An August 2006 U.S. Government Accountability Office (GAO) report (Early Enrollee Experiences with Health Savings Accounts and Eligible Health Plans, GAO-06-798) noted that few participants actually researched the cost of medical or hospital services. In addition, there is no evidence that individuals will be better than their employer or health plan at negotiating hospital and doctor rates.
Most uninsured Americans could not save large amounts of money to put into HSAs. Because most low-income people have little disposable income after paying for housing, food and other necessities, it is unlikely they could manage to spare $2,850 in 2007, increasing to $2,900 in 2008 (or much more, in the case of a family) to put into an HSA. And many uninsured don't even have enough income to see any benefits from the tax breaks.
Health Savings Accounts
The next time your employer or health plan talks about empowering you in your health care decisions, follow the money and just say NO! - that is if you even have a choice.