Much has been written lately about the repeal of the Affordable Care Act, or "Obamacare." Once the ACA is repealed, the question of course becomes what will replace it.
Insurance Claims and Issues Blog will take a look at four of the main replacement proposals and the health care policies behind them, drawing on the far more granular observations in the easily understandable essay by Allison K. Hoffman, "The Unhealthy Return to Individual Responsibility in Health Policy" published on January 16, 2017 on RegBlog, the University of Pennsylvania Blog on Regulation.
We begin with a look at Health Savings Accounts (HSA's).
Health Savings Accounts are not insurance policies. Nor are they health plans. Rather, they are financial instruments. HSA's are available as a matter of choice right now. If HSA's are made to replace the Affordable Care Act, presumably their tax benefits will be expanded beyond the present level of tax benefits they afford, so as to make them even more attractive to health insurance policyholders.
HSA's are maintained by individuals like savings accounts in a bank. The individual deposits money in the HSA, just as in a savings account, except that in the case of an HSA the money is to be used for health care.
HSA's enjoy tax advantages right now. Currently the Internal Revenue Service "stipulates that these accounts must be paired with a high deductible plan -- at least a $2,600 deductible -- and have a maximum annual contribution of $6,750 for family coverage in 2017." Allison K. Hoffman, supra.
So, the reason that an HSA is attractive to anyone is that it affords tax savings. The purpose of the tax savings is to encourage saving for medical expenses. If a person saves her money "for a rainy day" in an HSA, or in this case, saves her money in an HSA to pay medical bills, then she will either be able to spend that money on out-of-pocket health expenses, tax free, or at least get a tax break for her HSA deposits.
The health care policy at work behind HSA's is clear: HSA's are offered to attract individuals who may be responsible enough to manage their health care expenses, by providing a tax incentive to save for them. This may be true for people who are fortunate to have enough money to deposit in the HSA's.
How large a set of persons the health care policy may reach, however, remains to be demonstrated. In the meantime, it may legitimately be asked of HSA's, "what if any benefit is there for a person whose tax reduction if any would have no effect on their household budget?" What difference would it make not paying taxes on out-of-pocket medical expenses, if there is no food on the table, no fuel for the heater, or gasoline in the car (if there is a car at all)?
This kind of jumps the gun, however. The first question to ask is how many people can afford to make deposits in health savings accounts in the first place?
Where are the numbers to answer these questions? Once the answers are proffered to support HSA's as an actual, viable alternative health care proposal, what are the numbers based on?
Answers to these and other questions should be found first, before HSA's become the law. Unless we want to base the law on speculation without evidence. That would not be stepping backward. In the final analysis, that would be law supported only by force, without any reason for public obedience.
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