Today, President Obama made an announcement outlining his health care plan. In his revised proposal, he incorporated four Republican policies and calls his plan ‘bi-partisan’. Though he recognizes the benefit health savings accounts bring to health reform, the specifics concerning how he will incorporate HSAs into his revised health reform bill were not discussed and are not known. What is known is that HSAs are helping save money by decreasing health care costs and spending in our current health care system. So why are we not focusing our attention on the evidence we do have?
By connecting health care services with actual health care costs, health savings accounts are decreasing health care costs. Evidence supporting these claims continues to surface causing many to question why HSAs are not being considered as an option in the Obamacare health plan. Obama’s goal is to provide affordable health insurance to all people, which is something all Americans agree is needed. However, increasing taxes and putting our nation in more debt should not be the price paid in order to make health insurance more affordable and readily available to all citizens.
Also, Obamacare does not address the fundamental problem of rising health care costs. The reason health insurance is not affordable for a majority of Americans is due to the excessive health care costs and the overuse of services. When people do not understand the costs of services (because the health insurance company covers most of the costs), they tend to overuse services unintentionally. With the knowledge of the actual cost per service, the individual can be more responsible with how they use these services. For example, let’s say you go to a restaurant and you do not know the prices of the dishes available. Let’s also say you will only pay a flat fee no matter what you order. You are more likely to order the most expensive meal on the menu, whether you are hungry or not. This analogy can be applied to how flat rate fees per service can lead people to using more than what they actually need when visiting health care providers.
The Cato Institute’s Michael Tanner writes that for every health care dollar spent in the United States, just 13 cents is paid by the consumer. If a co-pay is all that is required for health care services (whether the full costs are covered by your health insurance or the government), the rest of the service fees must be paid by someone. If the health insurance companies and the government continue to incur the majority of the costs, then health insurance premiums will continue to rise to compensate for increasing health care costs and usage. If the government incurs the majority of the costs, then taxes will continue to rise to account for these increases. Therefore, allowing every American access to standardized health insurance will definitely not decrease health care costs. Instead, it will actually decrease health care quality, increase health care costs, and increase taxes!
Instead, the root of the problem should be treated first. Increasing customer responsibility by connecting health care cost with service will allow people to begin to use the services that are only needed, not expected. Once health care services are better understood and maintained, the costs of health insurance will decrease. Once health insurance premiums decrease, more Americans will be able to afford quality health insurance. It is not a quick fix, but it is a better option than our country continuing to plummet into financial ruin.
Evidence of this concept working has been reported in states such as Indiana. In a recent article by Indiana governor Mitch Daniels for the Wall Street Journal, 70% of the state’s 30,000 employees use the HSA option available to them. The state deposits $2,750 a year into an account controlled by the employee, who uses it to pay health care costs. The state of Indiana also pays the premium for the high deductible HSA-eligible health insurance plan. Money left over each year belongs to the employee. A study conducted on these employees’ use of health care services show that they do not skip needed services, such as routine physicals and mammograms. Daniels claims this program will save the state about $20 million this year.
Before we endorse a health care reform bill that could cost us billions of dollars without addressing the real health care problem, we should look at what IS working to decrease health care costs and aid Americans in getting the health care services they need.
