Friday, February 03, 2006

Growing Legions

Sounds like a good idea to grow a legion or two to fight the "war" instead of keeping 50K beyond their tour of duty, but that's not what this post is about. Those who wish to be tricked into thinking the W, Rove and Co has an answer to the nation's healthcare woes aught head this warning:
The health care proposals put forth by President Bush in his State of the Union address this week will not make much of a dent in the two main problems plaguing the nation's health care system — the escalating costs and the growing legions of the uninsured. His proposals simply show where he and many conservatives want health care financing to go — toward a system where consumers will be expected to pay more of their care themselves, in the hope that they will therefore use medical services sparingly and shop for them more wisely...

...Many people with low or moderate incomes, by contrast, would find it hard to deposit money in the accounts or allow any deposits to accumulate over the years. So far, the accounts seem to have attracted more interest from banks, which are salivating over the prospect of collecting management fees, and from health plans than they have from consumers, who have been slow to sign up for the accounts or to put money into them.

Health savings accounts are not apt to trim the nation's health expenditures by much because they do not attack the root causes of high medical costs, and they will have no effect on the relatively small percentage of high-cost patients who account for most of the nation's medical spending.

The great danger is that health savings accounts could accelerate the erosion of traditional employer-provided insurance, as companies try to reduce their health expenditures by shifting more of the costs onto workers. If the healthiest employees jump to tax-free accounts in large numbers, they will leave traditional health plans saddled with sicker and older employees, whose needs will force a rise in premiums, making comprehensive coverage even harder to sustain...

Still sound like a good idea? It is if you are a professional money manager or an employer such as, say, Walmart or GE.

1 comment:

Anonymous said...

Lead not your money manger types into temptation

Health Savings Accounts will suffer the same fate as the 529's, saving for college education. The fees will be larded on and the money will do less well that 401K's.

Divide. Conquer. Eat the little accounts. Burp!