Gingrich praises HSAs. Watch out!
The Atlanta Journal-Constitution
11/30/03
Condition of health care system has been upgraded
By Newt Gingrich
The historic Medicare and health savings account legislation that the House and Senate have passed, and which President Bush has promised to sign, is an extraordinarily important first step in the transformation of the American health and health care system that will save lives and money.
… the impact of this legislation extends far beyond the drug benefit. Through its creation of health savings accounts, the measure will begin to address the crisis in health care that affects all Americans.
If you are a fiscal conservative who cares about balancing the federal budget, the new legislation may have no more important feature than the health savings accounts. The new account will begin to move us away from the current model in which insurance companies dominate the health care transaction. Instead, the HSA will enable transactions between doctor and patient in which the patient controls how dollars are spent.
… the HSA represents the single most significant transformation that can be made in saving the country from skyrocketing health costs and steadily increasing calls for taxpayers to finance more and more of the health care system through higher taxes.
The next balanced budgets will only be possible once there is a transformation of the health system, and part of the key to this transformation will be the existence of health savings accounts. Without the first dollar interest in the payment of health expenses, there is little incentive on the part of the patient/consumer to scrutinize a doctor’s bill.
Health savings accounts will encourage individuals to shop for health plans that best fit their needs and to make cost-conscious decisions about how they spend their own health dollars as opposed to a third party’s money. Individuals who control their own health dollars will be wise purchasers of health services.
… all Americans will receive the opportunity to take control of their own health care spending so that they can provide better health for themselves and contribute to the better health of the economy.
http://www.ajc.com/opinion/content/opinion/1103/30newt.html
Comment: Laudatory comments about HSAs coming from Newt Gingrich should
alert us all to the intent of this isolated provision that was tacked onto the Medicare drug and “modernization” bill. HSAs are not about Medicare. Instead, they lay the foundation for a fundamental revision of the way we fund health care for all of us.
The individual accounts provide a tax “subsidy” for health care at the marginal tax rate which results in health care funding that is inversely proportional to income, the poor paying more for health care than the rich.
That alone should cause us to reject this model of health care “reform.” The
health policy literature is replete with other examples of the fundamental
flaws of these medical savings accounts.
Of perhaps greater concern is the flexibility that will be allowed in the design of the high-deductible plans. Although the plans would limit out-of-pocket expenses for families at $10,000, this does not include payments made for outside-of-network services. To keep premiums affordable, insurers will fail to provide adequate reimbursement increases for providers, limiting the numbers of providers who are willing to sign the contracts. Also, to provide options with lower premiums, insurers are deliberately diminishing the number of providers available thus saving costs by limiting access. Those families that purchase plans with affordable premiums will find that they do not have the protection of the $10,000 stop-loss limit when they are forced in urgent circumstances to accept available but non-contracted providers. A person with major trauma or an acute myocardial infarction cannot ever be an informed shopper of health care services. Those with high-cost, chronic problems may also find that restricted provider lists could significantly impair accessibility.
The claim that the catastrophic plans will take care of all costs after the HSAs are depleted is a fraud. The managed care PPO products will prove to be severely deficient for those with significant health care needs, but with modest or meager resources. Traditional indemnity catastrophic plans have almost disappeared already and, in the future, will surely not be an affordable option for the average-income individual.
Splitting the health insurance pool into millions of segregated accounts will adversely impact only those who have significant needs by depleting their accounts: the very individuals for whom insurance was designed. Providing catastrophic coverage by marketplace plans that compete on premium pricing (by reducing benefits and increasing cost-sharing) can only result in financial disaster and impaired health care access for the average individual with significant needs.
Title XII, authorizing HSAs, goes into affect one month from today. If it is
not repealed immediately, many of us will be left with the option of shopping for bankruptcy attorneys who will best meet our need to be relieved of a morass of medical bills. But after all, isn’t consumer-directed, personal bankruptcy the American way? Gingrich and friends apparently believe so.