SOTU: Bush’s Health Savings Accounts Offer Americans No Meaningful Savings
SOTU: Bush’s Health Savings Accounts Offer Americans No Meaningful Savings
Bush said: “We need to expand Health Savings Accounts … help small businesses through Association Health Plans … reduce costs and medical errors with better information technology … encourage price transparency … and protect good doctors from junk lawsuits by passing medical liability reform. And in all we do, we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors.”
FACT — HSAs DO NOT OFFER MEANINGFUL SAVINGS FOR AMERICANS: “Low- and middle-income uninsured people will gain meager or no tax savings” from health savings accounts, according to a Commonwealth Fund study. Roughly 50 percent of uninsured adults pay no federal income taxes, meaning that “tax incentives for high-deductible health plans would have little impact on uninsured adults.” [Commonwealth Fund, April 2005]
FACT — HSAs PRIMARILY BENEFIT THE RICH: The Government Accountability Office (GAO) found “that the average income of HSA users was $133,000 in 2004, compared to $51,000 for all non-elderly tax filers.” Most low-income individuals “do not face high enough tax liability to benefit in a significant way from tax deductions associated with HSAs.” [CBPP, 12/7/06; Kaiser Familiy Foundation, 10/4/06]
FACT — HSAs WILL NOT DECREASE THE NUMBER OF UNINSURED: HSAs are “not likely to be an important contributor to expanding coverage among uninsured people” because most of uninsured Americans “do not face high-enough marginal tax rates to benefit substantially from the tax deductibility of HSA contributions.” [Commonwealth Fund, April 2005]
FACT — AMERICANS ARE DISSATISFIED WITH HSAs: Just 33-42 percent of enrollees in consumer-driven health plans were satisfied with their health care, compared to 63 percent of those people with traditional coverage. Two-thirds of people prefer an employer-selected set of plans over an employer-funded account and choosing insurance on their own. [Commonwealth Fund, December 2005]
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Delusional is an understandment…
January 23rd, 2007 at 9:28 pmBush’s proposals on health care are bogus and insulting, but I am more worried about him destroying Social Security!
January 23rd, 2007 at 9:30 pmMedical care is on life-support.
January 23rd, 2007 at 9:35 pmI failed to notice how giving me a tax refund for having work-provided health care is going to help the unisnsured. And what’s with the incessant ovations. The SOTU should have been over 15 minutes ago.
January 23rd, 2007 at 9:51 pmA family with a total income of $133,000 is rich?!? Geez, you guys really do hate mainstream, middle class Americans.
January 23rd, 2007 at 10:35 pmchad–News for you dimwit. “Work-provided” healthcare is a benefit, not a right nor an entitlement. Focus on the REAL problem: overpaid doctors, ridiculously high standards to practice medicine, and draconian laws on restricting alternatives to AMA-sanctioned healthcare.
January 23rd, 2007 at 10:37 pm$133,000 sounds rich to me.
January 23rd, 2007 at 10:40 pmAnytime someone says FACT before a sentence, you can be certain the statement that follows is FICTION.
I always enjoy when people pull out quotes from various studies that are setup to provide results & conclusions that will support the person’s political belief.
1. If you don’t make any money or pay any taxes, how do you expect to get a tax break?
2. You might want to look at the sample size of their study and the first page that claims non of the results can be conclusive because of the sample size of the data. Who is buying HSAs? Older people – what as crazy as it sounds, most people make more money at the age of 55 and older then that of a 20 something.
3. 40% of the people enrolled in HSAs were previously uninsured! Hmmm – this isn’t a opinion this is a real number! I guess you didn’t read that study….
4. If you were paying for your car and were driving a Mercedes, then all of a sudden you had to trade it in for a Honda, would you be satisfied? Probably not. However, i think that satisfaction would change if you had to make the car payment.
5. FACT – Why do I waste my time responding to people that have no knowledge or experience with health insurance.
January 24th, 2007 at 10:47 amI do applaud GW for finally trying to do something regarding those who are uninsured. I just think the way he wants to go about it is all wrong. HSA/FSA accounts are really not satisfactory in helping combat out of control medical expenses.
Additionally, trying to entice people to purchase high deductible medical insurance is not an adequate solution either. They are trying to cater that approach to people who are of low income. Does anyone realize that a low income person will be facing a monumental task of trying to pay the deductible in the event of a catastrophic medical event? This will most likely lead to bankruptcy, but since the fantastic 109th Congress made it more difficult to declare bankruptcy on the grounds of medical expenses, these people are going to be still left to fend for themselves. It really does not solve the problem. Health care, under this proposal, will still largely be a benefit afforded to those who can afford to pay for it. This plan just shifts around how the unemployed or low income people get screwed financially by the system.
Additionally, removing the benefits to work sponsored healthcare plans does a disservice to people who work very hard, who have careers, who may be just scraping by as it is. I personally recently landed a new job, with fantastic medical insurance. Now, under GW’s new plan, I am going to be screwed for having a good job, with excellent medical benefits. Six months later, I’m still trying to pay off my deductibles from the insurance I had at my previous job after having a baby, and other immediate family medical issues.
I say provide medicare/medicaid for the poor, unemployed, uninsured and the uninsurable, and stop screwing the middle class.
January 24th, 2007 at 12:20 pmI just do not understand why our current mentality is that of an entitlement society. Why in the world would anyone want to go to socialized medicine. Google the health care system of Canada… their own govenment states how their current system is not sustainable.
The United States was founded on an ownership mentality… not an entitlement attitude…
Grow up America – start taking responsiblity for yourself ! I love the Health Savings Account approach… I get to keep my own money and only spend it when I need to!
January 24th, 2007 at 12:24 pmThis post misses the point of HSAs entirely. HSAs are not intended primarily to be a tax deduction. HSAs replace insurance for routine procedures, but get the same tax deductible treatment as health insurance policies.
Would you want your homeowner’s insurance to cover lightbulbs? Would you want your auto insurance to cover gasoline? Of course not! Why pay a middleman (insurer) when you don’t have to?
Incidentally, this post should be cited on this site whenever opining against “unfair tax cuts for the rich” instead of cuts for the working class. I wonder how a post that admits that a good chunk of the working class doesn’t pay ANY federal income taxes slipped past the Think Progress editors?
I’d like to see some research from unbiased sources, rather than only the Commonwealth Fund.
January 24th, 2007 at 8:10 pmThis makes health care benefits much more attractive to me as a small business person (13 employees) with much more flexibility in benefits. I would rather protect my employees from catastrophic loss and not pay for every case of the sniffles too.
February 14th, 2007 at 8:58 amIt seems to me that some of the previous posters have missed the point entirely. I’ve just gone through an almost maddening process of trying to compare a high-deductible/HSA plan to my current one, and it’s almost impossible to tell which is the better course for me personally:
HSA type plans are a great idea, but they only make sense if 1) you are young and healthy or 2) if you otherwise have the cash flow to support them. The yearly cash outlay for fully funding one of these plans can be much higher than a standard plan, because the cost saving is not enough to make up the gap in the higher deductible. Further, since one can spend HSA funds on medical expenses that are not covered by the insurance but still eligible under the HSA rules (think “orthodontist”), one can be covering medical expenses at “retail” and draining the HSA, which has a yearly limit on contributions. So the plans can have the effect of increasing the exposure of the insured to unexpected medical expenses, especially chronic ones that require satisfying a deductible year after year.
Over time and with (again) sufficient cash flow, the above does not matter. But for anyone with a stretched income or worse, it seems very possible to fall into a cycle of financial drainage that never builds the HSA to the level needed for the long run, so that they are, bottom line, simply increasing their medical expenses along with their risk with this approach.
This is the main point of the objection to the way “consumer driven” plans are marketed. It seems quintissentially Republican to create a plan that claims to help the uninsured while requiring a level of cash flow that this group is truly unlikely to have. It proves once again that liberals are hardly unique in pursuing flawed “solutions” that conform to their world view.
February 17th, 2007 at 9:30 am