Georgia's Republican leaders are considering a Newt Gingrich-inspired "solution" to the state's health insurance crisis that critics say will come at the expense of those who most need relief -- the middle class and the poor.I disagree that HSA would hurt the middle class and poor. In fact, I think they would help them by providing a force to lower the cost of health care. When people's decisions are intimately tied to their finances (such as in a HSA), they tend to make more rational decisions. When you no longer have just a $10 copay to consider, generic drugs and excessive tests no longer seem desirable. When generic drugs get this edge, the price of name brand drugs drops, too. This is just one example, but you can see how this type of logic can be applied to much of health care.
Gingrich's plan, the result of work by a think tank he founded that is paid for partly by health insurance companies, would set up tax breaks for businesses that offer employees a choice of personal, untaxed health savings accounts.
Others say it's a potential health care fiasco that will discourage the working class from seeking medical care because of the costs, and drive up the premiums of those who stick with traditional health insurance.
The fact that insurance companies-seemingly demonized in the above quote-support the proposal should tell you something about the potential effects of this system. Insurance companies' primary interest is profit, not your health. Thus, any proposal which will make them more profitable is a good proposal. Rising health care costs will not benefit insurance companies; rather, as costs fall, insurance companies will pay less for services, increasing their profit. Thus, the presumption that premiums would increase is false. Increasing premiums would represent chump-change compared to a decrease in the cost of health care.
Health Savings accounts are certainly not for everybody, but they do represent an option that should exist for consumers. I think it is one piece of the solution to making health care more affordable for everyone, and I welcome any legislation that will make such accounts more accessible. Cheers, Newt!
Cross Posted at California Conservative and 123Beta