SUPER SAVERS:

A Brief History of Health Savings Accounts (NCPA, 8/11/04)

As of January 2004, 250 million non-elderly Americans have access in principle to health savings accounts (HSAs). Individuals will now be able to self-insure for some of their own medical needs and manage some of their own health care dollars. [...]

In contrast to HRAs, HSAs create an actual savings account that belongs to the worker, can travel from job to job, and be passed on to heirs. To a large extent, they allow people to choose between health care and other uses of money. Funds can be withdrawn and spent for nonhealth purposes after age 65, after paying normal income taxes. Prior to age 65, a 10 percent penalty also applies.

Consumption taxes are just another step in a revolution that's well underway.

MORE:
- Life support: Our sick health insurance system has to change—and one option actually looks promising (Joel Belz, World)

If you think that the greatest significance of the collapse of the Berlin Wall 15 years ago was the freedom that event brought to several million East Germans, think again.

The really important lesson from that great tumble was this: Don’t ever assume that the impossible can’t happen! Don’t think that any captivity must necessarily last forever.

I thought about that last week with reference to two much more mundane, but still very costly, forms of bondage: health insurance and Social Security. Most of us these days typically set aside more than 25 percent of every paycheck to cover those two items, and are assured by the actuaries that we’re on a trajectory where it will soon take a full third of our compensation. Still, we gloomily knuckle under and consign ourselves to perpetual oppression.

Well. As candidate John Kerry would say—but not at all in the sense in which he means it: Help is on the way! The Berlin Walls of health insurance and Social Security are showing some huge cracks. And the election of 2004 will go far to tell us whether it’s real or phony help.

Next week, we’ll look at a promising new option involving Social Security. This week, let’s look at what real help might look like with reference to health insurance:

A relatively new approach called “Health Savings Accounts” (HSA) is picking up speed. Part of the Medicare Reform Act effective since June 1 of this year, and therefore now the law of the land, HSAs have several advantages over traditional medical insurance. The key is in moving important parts of responsibility for health care from the employer to the employee.

Posted by Orrin Judd at August 12, 2004 2:36 PM