As far as trial balloons go, however, this one has some diabolically clever politics to it. Consider who would be the big losers if state and local tax deductions were eliminated: People living in high-tax, high-services cities, counties and states. Most of those, I'm willing to bet, are blue-voter territory.45 million Americans lack health insurance, and the percentage of Americans under age 65 with employer-provided coverage is declining. Most people would probably look at that situation and conclude that the last thing the country needs is to take away incentives to provide employees with health coverage, but then, most people don't have the profound analytic capabilities of "America's first CEO president."
As for reducing the incentive for employers to provide health insurance, I guess that the ensuing loss of health coverage would -- among other things -- increase demand for tax-free health savings accounts?
The Bush Administration champions "Health Savings Accounts," in which people are allowed to place money into tax-free accounts to pay for health care deductibles and uncovered expenses. The idea is supposed to be that health care magically becomes cheaper because patients don't waste money on unnecessary medical visits and procedures.
The idea of getting consumers to bear the upfront costs of medical care is that they will spend more responsibly because the money is coming from their own pocket. Maginnis said early figures with the high-deductible plans show a 20 percent drop in spending. "People are being more careful," he said.No, in fact, it isn't unclear at all.
But it is unclear whether policyholders are trimming back on frivolous procedures or on medical care they may need.
If you have employer-sponsored health insurance, cast your memory over the things they have recently paid for. Did any of it involve "frivolous procedures?" Did you have medical procedures just for the fun of it, or take prescribed-and-covered medications recreationally? Are your insurance company's rules so loose and easy that they'll cover any damn thing, regardless of its medical necessity? Me neither.
The AMA knows what people cut when they have no insurance, or incredibly high deductibles: ongoing care and monitoring for chronic diseases, diagnostic tests, checkups, well-child visits, preventive care. Frivolous expenses like that. Patients "ration out" their blood-pressure medicine, taking half the dosage to make it last twice as long. (Yes, I have seen this many times.) They don't want to pay for ongoing Pap smears, so they wind up with carcinoma in situ . And they wind up in the ER with complications from untreated chronic problems, requiring care that is considerably more expensive than the ongoing management they thriftily refused.
This is not news to anyone who works in health care, or, for that matter, anyone who has been uninsured or underinsured. It is only news to the high-minded industry lobbyists who say things like, “The theme will be individual empowerment. We will see a shift to more responsibility on individuals to provide for their own health and retirement security.”"
But in any case, Health Savings Accounts will not help you if your employer decides to respond to the proposed tax code changes by dropping employee health benefits altogether. Even assuming - and it's a big assumption - that you have the disposable income to set aside savings at the maximum allowable rate ($2,600 for an individual, $5,100 for a family), a single emergency visit could easily wipe out your HSA savings. It's unlikely to be enough money to purchase an individual insurance policy. In short, it's no substitution for traditional medical insurance or HMO policies.
"Individual empowerment." When you hear that phrase coming from the Bush Administration, put one hand securely on your wallet and use the other hand to ward off the baseball bat.
