Keep Pushing for Health Savings Accounts

Despite enactment of the Democratic health law, one reform Republicans and market advocates should fight to keep alive is the Health Savings Account (HSA), which allows people to put pre-tax money into an account dedicated to health-related expenses.

Experiences my wife and I have had this week illustrate the power of paying for one’s own health care, which an HSA encourages. Rather than pay a hundred plus dollars each to a doctor and an out-of-state testing facility, we each paid King Soopers $20 to test our blood cholesterol. I’m not saying this is a good substitute for seeing a doctor, but we wanted to get a test between regular doctor visits. Our actions illustrate the fallacy of claims that self-payers don’t get preventive treatment. We are highly committed to doing what we can to prevent long-term health problems by taking care of ourselves and paying for preventive care.

Yesterday we checked out Good Samaritan Exempla in Broomfield (more on this later). When we asked for referrals for local doctors, the hospital’s representative told us, “You’ll probably want to pick a doctor based on what your insurance allows.” I proudly replied, “No, we will pick a doctor based on who we judge is the best doctor.”

Paying for one’s own health care encourages the health consumer to be active-minded and pro-active. It encourages the consumer to seek good value for the money. In short, it promotes better long-term results for lower costs.

By contrast, ObamaCare in its core elements will promote wasteful and frivolous health spending and irresponsible behaviors, and it will contain costs only through bureaucratic rationing.

On the health bill, the Democrats won. But, even as free-market advocates fight for the full restoration of freedom and individual rights in medicine, they should push to keep the HSA alive.

It is unclear to me when and if ObamaCare will forbid or make impossible my high-deductible insurance. (It would indeed be unfortunate if one result of ObamaCare were to push me from having insurance to not having it.) Currently, an HSA is tied to such insurance (as I understand it), so if high-deductible insurance goes away, that would quickly phase out HSAs. An easy fix to this would be to sever HSAs from insurance, or allow an HSA to be linked to any sort of health insurance. To appease the “soak the rich” crowd, limits on annual contributions could remain (so that people couldn’t get too good of a tax shelter).

A key reform to HSAs would be to allow the funds to purchase health insurance policies too, as well as health care.

I suspect, as I have heard others claim, that ObamaCare will encourage some people — those who want to remain in control of their own health decisions — to utilize “medical tourism” and cash-only clinics. HSAs would help enable the latter. (Indeed, a selling point to Democrats could be that HSAs would encourage people to seek medical treatment in the U.S. rather than in Costa Rica or India, if HSAs were valid only within the U.S. Of course, I would rather see HSAs valid for any health-related expense anywhere, but that’s probably wishful thinking at this point.)

The Democrats may have changed the law, but they have not altered the basic fact that people take charge of their own health care by directly paying for routine or moderate-cost care, drawing on insurance only for high-cost emergencies. ObamaCare will continue to disempower patients and empower bureaucrats (including employees of nominally “private” insurance companies), but HSAs could help keep some remnant of consumer choice alive.



John Ansted April 18, 2010 at 2:36 PM

Agree, Ari! We also have, use, and like our HSA-compliant high deductible health insurance and savings account. Such has made us much better health-care consumers. Something I think we all need to become: people just as good at shopping for a blood test vendor as for groceries, cars, or other goods and services we purchase.