Tuesday, January 31, 2006

The Sky is Falling! (Part 1)

Or maybe not. I’ve been pretty tough on folks who tout that their “contraption du jour” is the only real answer to any perceived problems in our health insurance system. This is because I don’t believe that there’s only one “right” answer to so complex a problem.
But I would be remiss if I didn’t also take to task those who would categorically state that any one potential solution would bring about the downfall of the system, either. There are, to be sure, any number of problems with our current system, the two most pressing of which are pricing and availability. It doesn’t seem to me that it’s particularly helpful to say that, for example, HSA’s would only further exacerbate the problem(s), any more than it would be accurate to say that they, and they alone, will solve all of our woes.
In his SOTU address last evening, President Bush laid out some far-ranging and lofty goals that he believes will help move the debate forward. He proposed a number of new initiatives, which I'll address in another post. For now, I’ll try to allay some of the fears that folks such as Drs Holt and Quadango have posited regarding HSA's.
The two primary arguments against widespread adoption of HSA’s boil down to:
a) Folks with a HDHP/HSA will eschew preventive or low level care because they’ll pay the bulk of those costs themselves, and
b) Healthy/affluent folks will choose the HSA route, leaving less a less healthy population in the “traditional” market, creating a super-sized “death spiral.”
As an aside, these two arguments seem to me to be self-contradictory. That is, healthy people are healthy for a reason, and probably don’t skimp on care, regardless of who’s paying for it. I have, of course, no proof for this, so I’ll leave it alone for the time being.
Nevertheless, let’s examine them one at a time.
Since there are so few HSA plans extant, it seems to me that the first argument is premature, at best. Depending on one’s orientation, it’s easy to speculate what people with such plans will or won’t do. The available evidence suggests that preventive care does not get short shrift. Indeed, since one is essentially rewarded for being in good health, it’s in the best interest of the insured to seek early detection of potentially expensive problems.
It also helps to understand exactly how HSA’s work; unfortunately, it doesn’t appear that the Chicken Little’s do. One of the first things I came to learn when I became aware of MSA’s (the forerunner of HSA’s) is that most of the folks who are agin it don’t look at the whole picture. One’s current health insurance policy costs whatever it does, month in and month out, regardless of whether you use it or not. And if you get to the end of the year, and you’ve had very few claims, it’s not like the insurance company actually gives you a refund.
But that’s exactly how the HSA works: whatever money you’ve saved stays in your pocket. So if it means that you pay $150 for an exam, but it saves you thousands because you caught the problem early, then why would you take the chance?
In Part 2, we discuss the impending collapse of the health care system [ed: he means the impact HSA’s will or won’t have on it]
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