Yes Virginia, There is an Alternative to Government Health Care Part 2
Welcome back to the second entry in a three part series about what can be done to fix the healthcare system without a big government plan. As previously stated this article is inspired by and heavily sourcing the following article that appeared on foxnews.com.
I am taking the five points mentioned in this article and expanding on them based on information from the author’s website and other sources.
Reform #3: Encourage Health Savings Accounts
Some of you may already use Flexible Spending Accounts (FSA) or Heath Savings Accounts (HSA). They are accounts that you can put money into pre-tax for use towards upcoming medical expenses. They currently have huge drawbacks. Flexible spending accounts have to be carefully monitored because if you do not spend the money in the account by the end of the year it disappears into the ether. The heath savings account doesn’t disappear and actually gains interest. However, it can never be used for anything but approved health care expenses without being vulnerable to the income tax as well as a ten percent penalty. Also, the Health Savings Account is only available for certain insurance plans that have very high deductibles so that they can pay for routine medical expenses (doctors visits, medication, etc.) pre-tax. So, here is what the article suggests which I think is a great idea. We should promote health savings accounts and open them up to everyone. They should stay pre-tax and be used for things like doctor visits. This frees up insurance for what it was originally for, catastrophic events that can’t be planned for like surgery, cancer, etc which in turn should lower premiums. There already is quite a difference between the premiums of normal insurance and “high deductible” plans which are basically just catastropic insurance. The difference between the costs of the two would make a nice funding for a health savings account. This will also make people more savy in their own health care. As you are actually paying from your account for the care you get, people are more likely to ask how much things really cost and what tests are necessary and not just to prevent a lawsuit (more on that later.) Finally, according to the article this money should then be available to roll into a retirement account if it is not spent. This would encourage younger people to create savings accounts as both healthcare coverage and an investment with interest. These funds if not used could then be rolled into an IRA after a certain period tax free. That point makes the whole thing worth it. Yes your putting money into an account for health care, your saving for the future at the same time.
For more information on health savings accounts click here.
