The president claimed not to have heard any good health care ideas from conservatives.
Maybe he should have tried actually listening.
President Obama faced the nation during his first State of the Union speech and said, “If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know”. Taking him up on his offer, here’s an idea:
Medical Savings Accounts in a consumer based system.
A Medical Savings Account (MSA) is a separate account individuals can use to receive healthcare
coverage with greater individual control over their medical finances. Reminiscent of Health Savings Accounts that were enacted through the Medicare Modernization Act of 2003, MSA’s help provide coverage to those who are self-employed, uninsured, and do not qualify for Medicare benefits.
Two components of an MSA account include a High Deductible Health Plan (HDHP) and a Tax Preferred Savings Account.
HDHP require individuals to cover a higher amount of their medical bill before an insurer picks up the rest of the bill up. Specifically, for insurance policies for individuals, the suggested minimum requirement is $1,000 and for family insurance policies, the suggested minimum is $2,000. Every year, you are required to contribute some amount of dollars to your medical needs, if you have any. This resembles most your car insurance where you can pay less for a policy which includes a $1000 deductible or more for a $500 deductible before your insurance company kicks in and covers the remaining bill for damages.
HDHP is combined with a tax-preferred savings account allowing an individual to make deposits with pre-tax dollars into an account which is used exclusively to pay for health care expenditures. This would be most like your IRA. Rather than a deduction taken from your paycheck by your employer for your health insurance premium, an employee may deposit and control that money, and more importantly spend or save that money when he chooses. Money accumulates during your younger healthy years for your later life when you likely will need medical intervention. This money can be applied to the yearly deductible for medical costs.
MSA’s help consumers create more custom designed health insurance policies because they are in greater control of the money in these savings accounts. MSAs incentivise patients to demand better and more efficient care from doctors because patients will be directing their own resources in the same way they direct dollars toward personal expenditures for mechanics, housekeepers, investment advisors and accountants. You are encouraged to be a better steward of your monies because you are writing the checks and you keep what you don’t spend.
Students should be concerned with the progress of Obama’s healthcare plan. Under the current Senate bills, Congressional Budget Office (CBO) reports show that non-group market rates for health insurance will be 10-13% higher under this bill. Furthermore, this non-partisan accounting office, the CBO, acknowledges these projections could be larger if young adults aged 18-35 do not buy coverage under this system. Both the House and Senate bills therefore mandate the purchase of insurance by all citizens or face a $750 fine, mandatory because if young adults don’t buy coverage, the structure of the “public option”, which is actually not an option, in the end, collapses financially. And, if you choose to resist the fine, does this theoretically move to prosecution or garnishment of wages? But why should a healthy 20-year-old pay, for 45 years, the same rate as a 65 retiree, or be fined? This is just one of the ramifications the congressional bills overhauling health care presents to our generation.
MSA’s provide just one option for Healthcare reform that addresses President Obama’s concerns. Both ideas could work to lesser or greater degrees and for a price. What is under discussion is a philosophy of responsibility. The congressional option currently shifts responsibility to Washington. Medical Savings Accounts retain responsibility with the insured. What happens with this matters especially to our generation and those following.
Basic understanding of economics, or at least common sense, will remind us that we will always be paying for health care either directly, via insurance policies or via the government. After all, there is “no free lunch”. Medical Savings Accounts are an option that maintains more control of decision making for the citizen. The trickle down advantage is a more flexible market for the delivery and quality of the care we purchase.