Consumer Involvement is the ONLY Way to Keep Costs Down: Why HSAs Must be Central to any Effective Healthcare Reform
While Congress has been working hard to craft healthcare reform legislation, the current proposals are so flawed and expensive that it is time to go back to the drawing board. By emphasizing Health Savings Accounts and consumer-driven solutions, we can create a system that can cover everyone, while leading to lower costs and continued innovation.
The two biggest problems with our current system are medical inflation, and the fact that many people with serious pre-existing health problems can find themselves uninsurable, particularly if they are self-employed or otherwise purchasing individual coverage.
To solve the insurability problem, the current healthcare proposals require that all plans be “guaranteed issue”. This will allow anyone to have access to coverage. However, if this does become law, there is the possibility that rates will rise as millions start filing new claims. This effect can be seen in guaranteed issue state such as New York, where premiums are typically 2-3 times as expensive as here in Colorado.
One way to buffer this hit on the self-employed and others who purchase individual coverage is to allow them to get a high-deductible HSA plan. These plans are about 40% less expensive than conventional copay plans.
In addition to being less expensive, HSA plans get the consumer involved in the decision process when it comes to purchasing healthcare. When consumers are comparing price and quality, businesses (including medical clinics and pharmacies) have to compete for those customers by offering lower prices, more convenience, and higher quality.
We have an opportunity to make some very positive changes to how we handle healthcare in this country, and the current proposals are heading in the wrong direction. Emphasizing Health Savings Accounts and getting the consumer involved in their healthcare decisions (and not a government bureaucrat) is just one of the most important things we could do to keep costs down.
With Medicare scheduled to go bankrupt in only 10 years, our nation cannot afford a $1 trillion medical bill. The current proposals create more bureaucracy and do nothing to effectively lower costs and encourage competition and innovation. Hopefully Congress will take a fresh look, and come up with better solutions when they reconvene.