Health savings accounts, not Obamacare - East Valley Tribune: Opinion

Health savings accounts, not Obamacare

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Posted: Saturday, February 6, 2010 2:48 pm | Updated: 3:24 am, Sat Oct 8, 2011.

Tom Patterson: A California physician tells of a patient who came in for a checkup. She appeared to be in good health, so he ordered a few routine tests from a page of laboratory procedures. The patient had other ideas. She demanded that every test on the menu be performed.

A California physician tells of a patient who came in for a checkup. She appeared to be in good health, so he ordered a few routine tests from a page of laboratory procedures. The patient had other ideas. She demanded that every test on the menu be performed.

The doctor explained that this was inappropriate and would costs tens of thousands of dollars, but she persisted. Since she had insurance it would cost her nothing, and she felt entitled to excessive testing just to ensure “nothing was wrong.”

What is wrong is the incentives in our health care system.

For most Americans, their employer or the government pays for a comprehensive use-it-or-lose-it insurance policy that relieves them of financial responsibility for health care costs. Their rational motivation becomes to consume as many services as possible since the cost is fixed.

The arrangement may seem comfortable at the time, but this flaw has resulted in a health care system that is unaffordable.

Unfortunately Obamacare in all its iterations makes this problem worse, not better. Obama may play to the masses by kicking around the hated insurance companies, but his plan forces Americans to buy their product. That’s the reason Obamacare can’t possibly “bend the cost curve down” as was originally claimed.

Every serious analyst thinks it will be horrendously expensive. The promised savings for businesses and families aren’t going to happen, and they know it. The insurance companies, though, are all for it. Why wouldn’t they be? Government mandates to consume your product are sweet.

In his State of the Union speech President Barack Obama claimed to be open to alternatives to his failing, unpopular plan. What a phony. He and his colleagues know very well about health savings accounts (HSAs) and their potential for actually saving money. In fact, they’re actively working to eliminate them in their “reform” plans.

HSAs are tax-deductible accounts that can be opened at any bank and used only to pay for health care expenses.

For financial protection, they must be combined with a catastrophic insurance policy. HSAs are typically funded from the premium savings that come from buying the less expensive insurance, usually a few thousand dollars per year.

Since the account balances in HSAs roll over from year to year, HSA owners have the money to pay for their own medical care but also have an incentive to not waste money. They don’t have to ask for permission from anybody to purchase services, including preventive measures, that they and their doctor think are important.

The Obamacare crowd needs to get HSAs off the playing field because they’re the main obstacle to the long-term goal of bringing all medical care under (their) government control. It’s a clash of ideologies.

Obamacare is based on the notion that by turning even more of our health care decisions over to federal bureaucrats, we will see mandated savings.

But that has never worked. Medicare is headed for bankruptcy, unsustainable in its present form. Medicaid is the fastest-growing budget item in most states, threatening to crowd out other spending. Even the cost of private insurance is choking the economy.

The alternative is to turn medical decision-making over to patients and doctors with incentives to economize where possible — in other words, to purchase medical care with HSAs in a free-market environment like we do for food, clothes, cars and other necessities.

Leftists criticize HSAs as “tax cuts for the wealthy” and claim patients wouldn’t know what to do with their freedom. But the experience (millions of Americans already have HSAs) is far different. Because HSA owners and their doctors are more thoughtful about costs, HSAs save 33 percent compared with regular insurance.

That means that millions of people unable to afford insurance could benefit from an HSA. Yet HSA owners report high levels of satisfaction and good health outcomes compared to those with traditional insurance.

Obamacare can’t be fixed. It’s based on a bad idea that no amount of tweaking can improve. As 70 percent of Americans now know, it’s time to start over. With HSAs, we can look to our traditional American strengths — free markets, innovation and personal responsibility — to create a medical care system that works for all of us.

East Valley resident Tom Patterson ( is a retired emergency room physician and former state senator.

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