A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

An Easy Way to Help Uninsured ... and "Consumer Driven" Health Scams

An Easy Way to Help Uninsured ... and "Consumer Driven" Health Scams

April 18, 2005

Beginning next Monday, the Mass. House of Reps will begin debating the FY06 state budget. The House budget writers left out a lot of important items to help uninsured folks get coverage and to help folks already on MassHealth get needed services such as adult dental care. You can send an email message to your state rep and senator today in less than two minutes by clicking here. The debate will last until the end of next week so you have lots of time to give less than two minutes -- please pass the link on to others.
President Bush and Republican leaders in Congress want us to believe that “health savings accounts” are the answer to the problem of uninsurance and health costs. These policies, aggressively marketed across the nation, include high deductibles of at least $1000 for individuals and $2000 for families, combined with a $500 personal savings account that can be rolled over from year to year. HSAs were established by Congress in the 2003 Medicare Modernizatin Act.

We consider the trend toward “consumer driven” health care policies a scam, designed to lure unsuspecting consumers into products that provide fewer benefits with higher cost sharing – with no regard to ability to pay.

Now the Congressional Research Service, in a new report, concludes HSAs will reduce utilization by stopping policy holders from seeking medically necessary care, and they are not likely to cut the number of uninsured or reduce health care spending, in an April 14th report. "It would be unreasonable to expect them to produce a significant reduction in the nation's health care costs," the report stated. Five percent of individuals account for about 50 percent of health care costs, and 20 percent account for 80 percent, the report said. "HSA plans with their relatively low out-of-pocket maximums will have little impact in reducing the health care spending for these groups," CRS said.

Some question whether it is fair that the biggest tax savings under HSAs "will likely flow to healthy, higher income taxpayers," the report said. "Some might also question whether the revenue loss is an appropriate use of federal health care resources, given the many people in the country who have no health insurance whatsoever."