December 25, 2004


Health savings accounts on rise: Tax-free device gains acceptance (Bruce Japsen, December 25, 2004, Chicago Tribune)

Years of double-digit increases have made the cost of health care so overwhelming that the federal government is allowing consumers to set aside tax-free money in health savings accounts--a shelter like those for major expenses such as retirement or a college education.

The accounts, known as HSAs, were created a year ago by the Medicare reform law signed by President Bush. They are expected to proliferate in 2005 as consumers learn more about them and how they can blunt the effects of cost increases projected at more than 10 percent next year. .

Insurers say they have sold a few thousand HSAs this year, largely to individuals and small businesses, but they are expecting a large jump next year as midsize to large employers adopt the concept. By 2006, more than 70 percent of employers are considering offering them, according to a survey by Mercer Human Resource Consulting.

The tax-sheltered accounts allow people with high-deductible health insurance plans to set aside money each year for medical care and carry over money not used from one year to the next. They are also portable and follow people from job to job.

Money in the health savings account can be used to pay for doctor visits, drugs, co-payments or other medical services that are not covered until the deductible is met.

Early purchasers of these accounts say they save money because their high-deductible plans typically have lower premiums than traditional managed-care plans.

Nothing better illustrates the revolutionary nature and political genius of the first Bush term than that his opponents on the Left and critics on the Right barely comprehend his two most important reforms--the HSAs he slipped by Congress in the Medicare bill and the vouchers in NCLB.

Posted by Orrin Judd at December 25, 2004 10:17 PM

OJ: common, reality check time; the Medicare bill was an attempt to purchase votes, obscenely expensive, utterly corrupt, with HSA's tossed-in in an attempt to help corporate America remain competitive, but these matters are essentially separate and should be evaluated separately. The Medicare bill was a big kick in the teeth to our kids.

The vouchers are taking a hell of a long time to show up and have requirements so toothlessly malleable at the union-local level that they essentially never need take effect even in the worst districts.

Look, I think Bush is great for a lot of reasons; but in these two cases, he gave up far too much for, essentially, a mirage of value-based outcomes. Bush is no Billy Beane.

Posted by: JimGooding at December 26, 2004 10:07 AM

Thus illustrating "barely comprehend"

Posted by: oj at December 26, 2004 10:16 AM

Well OJ, as I recall, you were also the only one to "comprehend" that Bush would receive 535 electoral votes. The proof is in the pudding; while there's hope for HSA's, the vouchers, as now-constituted, offer no escape anytime in the future for kids trapped in crappy government schools and are simply a pretty naked attempt to shore-up the evangelical coalition.

Posted by: JimGooding at December 26, 2004 10:29 AM

That's quite wrong, of course, but they are generally only helping black kids and he'd never have gotten such a program past the Republican party had they recognized what it would do:

Posted by: oj at December 26, 2004 10:43 AM

Bush came to power when my oldest son was in fifth grade. The boy is now a freshman in high school and attending an underperforming school. I have no doubt that he will graduate from this school in the last year of Bush's two-term presidency without us ever being given the chance to use vouchers for better school options.

Posted by: JimGooding at December 26, 2004 12:26 PM


And? The program is just three years old and not designed to benefit upper-middle class folk. If it's a failing school under NCLB you can get a voucher though.

Posted by: oj at December 26, 2004 12:32 PM

I think vouchers' political stillbirth status is quite apparent in the fact that they are "not designed to benefit upper-middle class folk." Why the hell not? Don't middle class kids deserve school choice? Is school choice a valid response to government school monopoly or not? 70,000 kids with vouchers is a zero impact all hot-air program.

Posted by: JimGooding at December 26, 2004 8:54 PM


They don't support them. Whites are more afraid of black kids in their classes than interested in vouchers for their own kids.

Posted by: oj at December 27, 2004 8:11 AM

Not true, at least in Metro Detroit. There's a Catholic school in Detroit proper, with lots of black kids, that's very good; interestingly, it charges less than Detroit's unbelievably bad public high schools receive in per-pupil funding. Many parents in my town west of Detroit would much rather send their kids to this school than the subpar local public school, BUT THEY CANNOT AFFORD TO DO THIS, and, OJ, they will never get vouchers to help them, because the unions don't want them to have the choice and Bush doesn't give a tinker's damn whether they get school choice or not. Vouchers are just red meat for conservative wonks and evangelicals, they are absolutely ineffectual where the rubber meets the road. Color me disappointed.

Posted by: JimGooding at December 27, 2004 10:03 AM

Jim :

The Republican Party doesn't support vouchers because it means black kids going to sub urban public schools--it's that simple. Getting vouchers in the back door was the only way to do it--W did. In a few years they'll just jigger the program and make them universal.

Posted by: oj at December 28, 2004 12:05 AM

OJ: this "jigger the program" line is simply face-saving gibberish. Going into the fifth year of his administration, three years after NCLB, vouchers are serving 70,000 kids, statistically insignificant even if limited to inner-city kids, a limitation, by the way, that makes absolutely zero sense.

It's time to own up, OJ: Ted Kennedy won this one big. Educational spending has gone through the roof and there's virtually no school choice anywhere. Bush was beaten on this issue, thoroughly, despite majorities in both houses of Congress. Damn.

Posted by: JimGooding at December 28, 2004 9:33 AM

Money doesn't matter--we have plenty. The essernce of being a conservative is being patient. Social Security looked a lot different three years in too.

Posted by: oj at December 28, 2004 9:41 AM

OJ: maybe, then, the essence of "being a conservative" is not having a kid trapped in a crappy public school so you can be patient in a politically sophisticated way.

Posted by: JimGooding at December 28, 2004 9:55 AM


Yes. Conservatives are getting them out of such schools, thus homeschooling.

Posted by: oj at December 28, 2004 10:04 AM


Homeschooling is great; but are conservatives telling single moms and couples who need a second income to homeschool? Especially when these folks are already paying for public schools? Isn't the just, efficient, freedom-loving, anti-propaganda, anti-monopoly political answer "vouchers", with home-schoolers being eligible for voucher money based on test performance? Do conservatives already need to be re-introduced to the virtue of vouchers? Is this why vouchers have NEVER GOTTEN OFF THE GROUND BEYOND SERVING AS CAMPAIGN FODDER?

Posted by: JimGooding at December 28, 2004 10:16 AM

No, they're telling them to get married, to move, to get second jobs, to lobby Congress.

Posted by: oj at December 28, 2004 10:25 AM

Well, that's progress, getting you to see that it's still l999-1989-1979-1969 as far a vouchers are concerned. Yours is good advice for starting from scratch. Q.E.D.

Posted by: JimGooding at December 28, 2004 10:33 AM

Federal law provided vouchers for kids in failing schools before NCLB?

Posted by: oj at December 28, 2004 11:22 AM

Equally well as after NCLB; a school only fails if the local union rule makers want it to. Three years after NCLB, 70,000 kids. NCLB is the educational equivalent of border security.

Posted by: JimGooding at December 28, 2004 11:38 AM

And every kid in the District of Columbia. Bureaucracy moves slowly, but it moves.

Posted by: oj at December 28, 2004 11:43 AM

OJ: Norm Mineta couldn't have said it better!

Posted by: JimGooding at December 28, 2004 1:44 PM

Which has made him a great cabinet secretary for three terms now.

Posted by: oj at December 28, 2004 2:20 PM

Yes, offending nobody.

Posted by: JimGooding at December 28, 2004 3:09 PM

And putting a complete halt to terrorism--something thought impossible in the wake of 9-11.

Posted by: oj at December 28, 2004 6:03 PM

Yes, all the while being a top-notch host to Syrian rock bands and making sure air marshals are disguised as actors from "Dragnet." At least he shakes down the grannies, you just can't pass up a good grope.

Posted by: JimGooding at December 29, 2004 8:19 AM