Health Care Reform: The Health Saving Account/Rationing Argument

There is a sub-text to the debate regarding costs in medicine.

Our republican friends say they worry that health reform will result in health care rationing. Their concern is that somewhere in the system might be a mechanism to evaluate the results of care and decide whether expensive interventions do anything and provide value.

These are the same guys that want to do away with Medicare and Medicaid and replace it with a system of “self-insurance” using high deductible health insurance and a health savings account.

Regarding HSA’s and high deductible policies, Consider the average person’s retirement savings (see below) and the average and median incomes in the U.S. (approximating $50,000-$60,000/year).

How much health catastrophic health care will the average person’s savings and “health savings account” with high deductibles cover? FYI the deductibles run between $3000 and $10,000/year and this does not take into account other co-pays and uncovered medical expenses. Most certainly such a HSA proposal formalizes the economic rationing of care–if you don’t have the money you don’t get the care.

US Savings rate compared with other industrialized countries:

In the last 10 years health insurance costs have increased 130%, drug costs have similarly skyrocketed with new cancer drugs in the range of $100,000/year.

Meanwhile savings in IRAs and other retirement accounts at various ages (2007 figures adjusted to 2009) are:

  • < 35: $6,306
  • 35 – 44: $22,460
  • 45 – 54: $43,797
  • 55 – 64: $69,127
  • 65 – 75: $56,212
  • 75+: (sample size insufficient)

Medicynical Note: Does anyone really think that most people will be able to adequately fund another type saving account, HSA–when their retirement is already underfunded? Does anyone really think HSA’s will adequately fund health care with drugs costing in the range of $100,000/year? That’s true economic rationing of care.

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