Tuesday, January 31, 2006

Wealth-Care, Not Health-Care

this is an audio post - click to play

Here's a shock: A Republican President proposing health care "reform" that benefits the rich and big business, while throwing crumbs to the poor and middle class.

Not that this is a new flaw feature of the Bush attitude towards health care. The Health Savings Accounts that Bush is going to tout tonight have been around since Congress passed them in 2003, and on the face of things, sound pretty reasonable: you sock away a little money, like in an IRA or 401(k), and when you really need it, you can withdraw it to pay for medical expenses that aren't covered by your insurance. Assuming you have some.

So what's new? Let's let Forbes.com tell us
Passed into law in 2003, HSAs allow consumers to save pretax dollars for health care expenses as long they are enrolled in a high-deductible plan. This year, people can either deposit up to the amount of their deductible or $2,700 for individuals and $5,450 for families--whichever is lower. Bush wants to lift this limit and let consumers pay their deductibles with tax-free HSA dollars.

But he may go further and call for legislation that would link portable electronic health records to HSAs and allow interstate competition among providers of the high-deductible policies meant to link the accounts, says Stephen Parente, an HSA expert at the University of Minnesota. Along with his colleague, Roger Feldman, Parente has been contracted by the Bush administration to model the growth of HSAs under varying assumptions.
A feature of this plan is that if you don't use the money in any one year, you can roll it over to the next.

But note two things: 1) A high deductible is required and b) You must have the savings plan in place in order to qualify for the insurance.

Now, who has that kind of money lying around? The answer's pretty obvious. So who stands to benefit the most from this plan? And once someone has retired, that money they've been socking away (mind you, the wealthy probably haven't spent nearly so much on health care, what with access to better food, better housing, transportation, and healthier neighbors) can be used to help pay for post-retirement health care.

Which tells me that Bush intends to phase out Medicare in favor of this useless plan. What he'll likely do is continue to phase in privatized health insurance under the guise of Medicare, so that once a 30 year old today retires, if he or she hasn't been socking money away (and staying away from catastrophic illnesses like cancer or heart disease), well, he or she is screwed.

And how many twenty or thirty year olds do you know that are even taking full advantage of their 401(k) plans at their jobs? Not many. And studies show that medical insurance for these age groups is historically underused and underbought.

Understandable. When I was twenty, my health insurance came with my job. When we were asked to kick in a little, I was OK with it, but I've worked jobs where I simply opted out, assuming that my immortality would prevent me from getting, you know, sick.

But who else benefits from this?:
Wall Street, too, will be eager to tap a fresh pool of investable assets. But it won't be quite the windfall that IRAs were to investment firms, because people will accumulate HSA cash slowly--one paycheck at a time--and then draw on it regularly in order to pay medical costs. "Eventually, you'll have to have big accounts to make this attractive to financial services," says Joe Antos, a health care expert
Uh huh. Nevermind that, companies who offer higher deductible policies to their employees on a shared-pain basis usually end up sloughing off a higher percentage of a lower premium onto the backs of the employees.

So this is wealth-care, not health-care.

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