Posted on 06/19/2019 9:59:23 AM PDT by bitt
Few have ever heard of “Health Reimbursement Accounts,” but they could fundamentally change the nation’s health care system — for the better — and destroy the Democrats’ case for socialized health care.
Late last week, the Trump administration finalized rules that will let companies put money into tax-exempt HRAs that their employees could then used to buy an individual insurance plan on their own. Seems like no big deal, right? Except it will start to unravel a 77-year-old policy mistake that is largely responsible for many of the problems the health care system suffers today.
Back in 1942, the Roosevelt administration imposed wage and price controls on the economy. But it exempted employer-provided benefits like health insurance, and the IRS later decreed that these benefits wouldn’t be taxed as income.
The result was to massively tilt the health insurance playing field toward employer-provided insurance. Today 88% of those with private insurance get it at work.
The massive tax subsidy — now valued at more than $300 billion — also encouraged overly generous health plans, because any health care paid by insurers was tax exempt, while out of pocket spending had to come from after-tax dollars.
So not only did this Roosevelt-era mistake create an employer-dominated health insurance market, it made consumers largely indifferent to the cost of care, since the vast bulk of it was picked up by a third party.
But while health care experts across the political spectrum recognize this mistake, Democrats’ response has been to get the government even more involved in health care, with the latest proposal a total government takeover under the guise of “Medicare for All.”
(Excerpt) Read more at issuesinsights.com ...
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excellent analysis ... no one’s talking about it ....maybe a good thing
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These are still mere tweaks of our huge, costly, burdensome health-care system, but everything helps.
The present medicare/medicaid monster will always be with us. its a political reality.
The option at this point is to allow some kind of free, simple and unregulated (a word which even scares some so-called conservatives) cash system to develop alongside it.
Trump is not only erasing Obama's errors, he is now starting on FDR's.
Onward to Woodrow Wilson's Income Tax fiasco!
Four More Years.
great step in the right direction
Good first steps. Now we need...
> A fully competitive prescription drug marketplace.
> Transparent pricing for all medical services (if somebody can go to jail for screwing with the charges on your auto repairs, so much more so for padding a bill for your medical treatment). This pricing and estimate needs to be provided to you BEFORE anything can be charged and violations for undisclosed and unauthorized charges should be SEVERE.
> Level pricing for services by each individual doctor’s office and hospital — no more with the checking the insurance and the clients history to see what ‘could be’ afforded and charging that; everyone at that doctor’s office pays the same rate for a physical, same rate for blood work, and the hospital you stay charges each patient the same price for the overnight stay. And that would get rid of the $400 for two asprins BS that people with “good” insurance get charged now, while medicare patients get charged $8 (or the max medicare reimbursement for asprin).
“Onward to Woodrow Wilson’s Income Tax fiasco!”
That would be the big one.
Years ago, I selected a lower-cost high-deductible health plan with my employer and opened an HSA account. Best move I ever made with my health insurance. Now I'm building up serious money to offset out-of-pocket expense as my contributions are well in excess of my maximum deductibles - which I rarely reach anyway.
What that means is no out-of-pocket medical expenses anymore while I build a nice little nest egg that I can tap into when I'm older.
Just make sure it's an HSA (Health Savings Account) and not a FSA (Flexible Spending Account) as FSA's are much more limited and are usually "use it or lose it" type accounts. Also, FSA's aren't as portable should you change jobs.
The HSA or HRA account which are similar would be major steps forward to lower the cost of healthcare.
My wife and I have had an HSA account for 15-20 years now, we have accumulated over $50,000 in the account tax free and tax free from any interest it earns.
We combine that with a high deductible policy and pay under $700/month for insurance, the deductible is $5000 but you can pay that out of the HSA account.
5 years ago I had hip replacement surgery and paid the $5000 deductible and never saw another bill.
I also take on prescription for blood pressure and pay $5/month because of the drug price my insurance company has negotiated..
Plus, if you leave your current job or get laid off, you can keep your insurance
I am of the opinion that by changing the health insurance market to a model that has employers contribute pre-tax dollars to an employee purchased insurance from an national and/or state market, would be the better way to go.
There are IRS penalties for contributing “too much “ of your own money to an HSA. The repubbie are trying to get it lifted (removed all together ), but Ryan and now Pelosi oppose.
True. I remember when "The Six Million Dollar Man" meant something. Now it is not that hard to accrue $6,000,000 in cost in our overly technology and drug based system of money for promised long life.
Where do you get an HSA?
Nice idea!
No ones talking about it, because, other than small companies trying to save cash, its not too likely many people are going to be doing it.
Let see, you will give me $X toward some premiums that I have to go shop for on my own.... but you will indirectly pay so much for.... whether that’s the full premium or not... okay. So I have no real leverage other than an individual buying coverage....
Meanwhile, big companies shop and negotiate their insurance because they are buying large quantities, and as such get better overall deals.
The author greatly overstates the impact this is likely to have long term for the industry or most Americans. Which is why, it isn’t getting, or likely to get much press.
In fact I would expect in a year or two you are going to start seeing stories where american’s used this program but bought cheap incomplete coverages and are complaining about how their insurance doesn’t cover this or that....
I have nothing against this program, but the proponents of it making claims it will DRASTICALLY shift the balance of the industry, don’t understand the industry at all. IMHO
Clark Howard (consumer affairs talk show host) has been saying that for years.
The Whole Foods Alternative to ObamaCare
From John Mackey 2009
https://www.wholefoodsmarket.com/blog/john-mackeys-blog/health-care-reform-full-article
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