Sunday - March 12, 2006

Health Savings Accounts

Alright, everybody! It’s time to pile on BMEWS member Z-Woof. You all know he sells HSA’s and he has a ton of information on them. Well, the Washington Post has an article in today’s business section that covers HSA’s in detail. When you read this below, keep in mind that the Post has a certain bias against conservatives. Go read the whole piece at the Post and then jump all over Z-Woof for a rebuttal ....

Uncertain Cure
Early Reaction to Health Savings Accounts Is Two-Sided
_{Sunday, March 12, 2006}

(WASHINGTON POST)

Two years after they became legal, President Bush has begun to champion health savings accounts as a salve for the nation’s ailing health care system, proposing $156 billion in tax breaks to encourage Americans to buy an unorthodox kind of insurance that is favored by conservatives but whose merits are largely unproven. Early studies of HSAs—and the early experiences of a small but growing number of people who are trying them—do not match the White House’s certainty that this recent concept in health insurance is, as Bush put it recently, “good for you.”

Health savings accounts differ sharply from traditional insurance by requiring people to pay more of their own medical expenses in exchange for significant tax benefits if they set aside money for that purpose. The arrangement consists of two parts: an insurance policy—less expensive than most ordinary health plans—in which people pay at least a few thousand dollars up front before the coverage begins, combined with a special investment account into which they and sometimes their employers may save money tax-free for current or future medical expenses.

According to the White House and other proponents, the plans can tame medical costs, turn patients into smarter medical consumers and make insurance affordable for more people. HSAs, however, remain so new and rare that there is little evidence on whether they curb overall health care expenditures or overuse of care. Meanwhile, research hints that they are most appealing to people who are relatively affluent, not poor and uninsured.

Some people who have switched to the plans are delighted. “So far, it’s been very, very good for myself and my family,” said Daniel Reisfield, 47, a Wall Street headhunter who lives in San Diego with his wife and two children. Reisfield said he thinks it makes more sense to invest more than $5,000 a year in mutual funds through his HSA than to pay a large insurance premium for his healthy family, which rarely seeks medical care.

Others have been disenchanted quickly. Felix Meschke, 32, a business professor at the University of Minnesota, did careful calculations of medical probabilities before he, too, switched his family to an HSA on Jan. 1. Less than two weeks later, his 11-month-old son, Jason, developed an ear infection that progressed to a fever and persistent cough so worrisome that a pediatrician sent him to a hospital, where he stayed for two days. By Jan. 24, Jason was getting better, but Meschke faced a $3,700 bill. If he still had his old insurance, he would have owed a few hundred dollars.

- There’s a lot more to this story at the WAPO ...

Posted by The Skipper     on 03/12/2006 at 08:32 AM   
Filed Under: • Medical •  
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