The "Do-Nothing" GOP
Republicans DeLayed: The GOP leadership deficit is one of ideas, not ethics (OpinionJournal).
Except for the 2003 tax cuts, we can't think of a single recent major policy accomplishment. There have been smaller victories--trade bills, some modest tort reform, and now some judges approved. But the drive for major reform has stalled. Mr. Bush was a co-conspirator in passing the 2003 Medicare drug bill that is the largest expansion of the entitlement state since LBJ's Great Society.
Bush's Unheralded Health Care Agenda; It's less modest than you think (Merrill Matthews, Weekly Standard)
Health Savings Accounts--President Bush has already opened the door for the expansion of consumer-driven health care by championing the new, improved Health Savings Accounts in the Medicare bill that took effect in January 2004. These HSAs are tax-free, personal accounts that are used for everyday health care expenditures and must be combined with high-deductible health insurance coverage. They replace the older, restricted Medical Savings Accounts enacted in 1996. Health Savings Accounts put health care dollars back in the hands of patients. With the consumers controlling the money and the decisions, health care providers are more alert to patients' needs.
Patients, meanwhile, get to keep any money in their HSAs that they don't spend on medical bills, and thus have a reason to be value-conscious shoppers for health care. Golden Rule, an insurance company that made a point of promoting the old MSAs and has hit the ground running with HSAs, announced recently that its customers had saved more than $110 million in their health accounts, and that the number of applications for such accounts was up 133 percent since the new law took effect. With the administration promoting HSAs for federal employees (see www.opm.gov/hsa/), the new accounts may take off.
Initial HSA offerings solidify trend toward CDH products (Steve Brown, Employee Benefit News).
With the ink barely dry on the colossus Medicare bill signed into law by President George W. Bush December 8, insurers have already begun planning, developing and rolling out new health savings account (HSA) products enabled by the legislation. Industry watchers say the HSAs are the logical evolution in the market trend toward consumer-driven health care.
"Over the last few years, we've seen a tremendous level of innovation in the product design that our members offer employers. It's extremely important, as more and more people realize what the main health care cost drivers are and how they want to better manage their health care costs," Mohit Ghose, director of public affairs for the American Association of Health Plans - Health Insurance Association of America says.
Attached to high-deductible plans (per the new law $1000 for individuals and $2000 for families), HSAs share similarities with flexible spending accounts (FSAs) and health care reimbursement accounts (HRAs). However, only HSAs are portable, may be funded by employees, employers or both on a tax-deductible basis, and allow unused funds to be carried over to the next year. Susan Relland, health policy legal counsel for the American Benefits Council says with the trend toward consumer-driven health (CDH), HSAs are the "perfect vehicle.
Medicare's hidden bonanza (Michael Scherer, Mother Jones)
For conservative leaders, the best part of the Medicare bill President Bush signed in December had absolutely nothing to do with Medicare. Rather, the provision that House Speaker Dennis Hastert calls "the most important piece in the bill" and former Speaker Newt Gingrich considers "the single most important change in health care policy in 60 years" is a little-noticed tax rebate set to cost the Treasury $6.4 billion over the next decade. The measure allows Americans to open tax-free "health savings accounts," which can be used to pay medical bills—in effect removing their owners from the shared risk that has been the core of the health-insurance system since World War II.
Conservatives claim health savings accounts will encourage people to more closely monitor their health care spending and bring down medical costs.
Health Savings Accounts great plan for health care (Terry Savage, Chicago Sun-Times)
The Health Savings Account was hidden away in the prescription drug bill passed by Congress last December. But unlike the seriously flawed drug plan, the Health Savings Account is an exciting concept that could make health insurance available -- affordable -- for millions of Americans who aren't covered by an employer plan.
It's a concept so new that the insurance industry is just gearing up to make it available. Health Savings Accounts combine inexpensive, high-deductible health insurance plans with a tax-advantaged savings account. "Tax-advantaged" is a new phrase, appropriate because this new account has so many different tax benefits.
Aside from making health insurance more affordable, there's a great social benefit to HSAs since they encourage everyone to be more watchful about unnecessary medical tests and expenses. If you don't spend the money in your HSA account, you keep it!
Drug coverage in the face of deficits (New York Times)
The administration announced last week that an unexpectedly large number of private health plans have been approved to offer drug coverage to elderly Americans, defying predictions that there might be too few companies participating to make the program effective. Ten companies will offer drug coverage to Medicare beneficiaries throughout the country, and many more will offer coverage in various regions. The lure of a vast new market of up to 42 million Medicare beneficiaries proved irresistible to companies that some thought might sit on the sidelines.
The result will be a lot of choice for consumers, with many more options than initially expected. There will also be a lot of competition among plans that should, in theory at least, help hold costs down.
As I noted on friend Tom Kirkendall's blog, Paul Gigot's Potomac Watch column was regularly one of the best political columns going, but he has been far less insightful after moving to New York to take over as editorial page editor of the Wall Street Journal for an ailing (now deceased) Robert Bartley, who was truly one of the influential men of the conservative revolution of the 80s/90s. Gigot's editorial page contention that aside from tax cuts, he "can't think of a single recent major policy accomplishment" by the Republican Congress is really kind of laughable, as a person could do what I've done above on healthcare reform for any number of policy areas instead. Once insightful, Gigot seems intent on fighting the battles that his old boss and friend Bob Bartley made a staple of the WSJ editorial page, when indeed conservatives have mostly won those battles and must get on with the business of reforming (not rolling back) the welfare state.
To make it even more simple for readers -- the prescription benefit for seniors was the price the Bush Administration and conservative leaders on the Hill (including Tom DeLay, whom Gigot is blasting in that editorial) were willing to pay in order to get innovative HSA healthcare reform. In return, they have gotten blasted by shortsighted conservatives as well as economically astute friends like Kirkendall for an admittedly costly compromise that was absolutely necessary to winning passage of a healthcare bill notable for market-oriented HSAs (a governing majority must win passage of its ideas, not just trumpet the ideas, or it will not long be a governing majority). It is highly unlikely that that the GOP's slim majority in Congress could have won passage of HSAs without the "bribe" so to speak. So it's disappointing when those who profess fealty to economic analysis either ignore or devalue the importance of getting HSAs in that legislation.
I bring up HSAs because my own employer, which tends to react somewhat slowly to changes in human resources management, has just announced it is rolling out HSAs coupled with high-deductible (catastrophic) insurance coverage for 2006. In recent years, our buffet-style (all-you-can-consume) PPO insurance plans have skyrocketed in cost to employees and to the company. Most of us employees -- healthy and unhealthy -- have had no real choice but to absorb those costs, because it's obviously unwise to go without insurance. However, in my case, it's been almost absurd to pay as much as I have been for healthcare coverage that covers EVERYTHING that might come up, when I've perhaps consumed $500 in healthcare over the last three years.
Under one of the new plans that will be offered by my employer, I'll be able to take catastrophic healthcare coverage with a deductible of somewhere between $1000-2000 annually (I forget the exact number); the coverage goes beyond typical catastrophic coverage in that it does fully cover routine exams, to encourage people to engage in preventive care. The monthly cost to me will be about 40% of the monthly premium I have now in a traditional PPO plan. The company will also start an HSA for me, and will contribute a certain amount to it each month. I will have the option of contributing to it as well, on a pre-tax basis, up to the amount of the catastrophic policy's annual deductible each year, and I plan on funding it fully. Unlike the old FSAs, the accounts roll over from year to year, accrue interest, and behave much like an IRA (that is, at a certain age, the money can be withdrawn penalty/tax free, and the money can always be spent on healthcare tax free).
I expect many more companies will begin to offer these sorts of policies next year and the year after. In my company's case, enrollments for such benefits take place once per year, so this is really the first opportunity they've had to put together such a plan. I'm impressed with it, as it moves us away from buffet-style consumption of healthcare towards greater individual responsibility in the consumption of healthcare.
It's a very important change to healthcare policy, yet Paul Gigot -- once one of our most astute observers of American politics -- can't even think of it as an accomplishment as he sits in his editorial office in New York.
I've said before that folks will only come to appreciate the transformative nature of many of the Bush Administration's policies over time, and the case of HSAs serves to illustrate my contention.
Posted by Kevin Whited @ 10/02/05 14:46 | American Politics | Technorati
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Comments
"that folks will only come to appreciate the transformative nature of many of the Bush Administration's policies over time"
The very definition of the "long con"
Posted by el mostachon @ 16:52 on 10/02/05
That response adds SO much to the substance of the conversation. Thanks so much for stopping by and offering your opinion.
Posted by Kevin @ 17:26 on 10/02/05
Currently, the aspect of HSAs I'm fondest of is that they can be used to pay for things which aren't covered by a traditional PPO plan, or which require a lot of wrangling to get approved. The government's definition of qualified medical expenses is signficantly more flexible than my new PPO insurance, and it's a tremendous help to have the HSA money available to pay for out-of-network expenses and un-covered treatments. On the other hand, the PPO insurance paid for itself in less than a month, when I had an MRI that would have eaten up my entire year's HSA contribution. I'd love to see the HSA maximum contribution raised, as well as to get rid of the high-deductible policy requirement.
Posted by Atlee Breland @ 20:53 on 10/02/05
HSAs are great. Well said, Kevin. You'll make a conservative out of me yet.
(not really).
;-)
Posted by TP @ 23:41 on 10/02/05
This is indeed a good idea, with a lot to recommend it on a lot of fronts. If you already have a job that pays well, and you have plenty of ready cash on hand to cover the high deductible, this is an outstanding way to go. I wish there was a way to get the state to go along with the roll-over option on its flex plan that these new HSAs seem to be universally offering. Maybe it can be added to the agenda of the almost-certain 3rd special session. :)
The only problem is that this doesn't address the problems of the more than 40 million people that don't have insurance in this country. Folks in the $8-10 an hour range can't afford insurance, even that offered by their employers, because the amount it takes from their paycheck is prohibitive. And a $1000-2000 deductible? Only if you have credit, something else that's not easily available to people on the lower end of the socio-economic scale.
That's the problem with a lot of the policies of this administration -- they're only beneficial if you're already well-established. If you're living paycheck-to-paycheck without extra income on the side, it's getting harder and harder all the time just to get by.
This is the only advanced country in the world where you'll hear the phrase, "I can't take my child to the doctor; I can't afford it." I'm not advocating for a single-payer system here, but when 40 million people don't have insurance, the cracks in the system have become chasms.
Posted by another precinct chair @ 15:18 on 10/03/05
APC,
Of course. I don't think anyone would contend that HSAs alone are the single answer to the American health care crisis. I'm studying to devote my life to the ethical conundrums that attend the delivery of health care in this country -- which cannot be divorced from an understanding of social, political, and economic barriers to care -- and it is a point of departure to me that no one proposal or solution can resolve the HC crisis (not suggesting you disagree).
The concerns you raise about HSAs are well-founded, but I think that their increasing propagation is nothing but good for the HC system in this nation, at least in part because its allocative efficiency is so much better. It allocates more of the choice to HC consumers by linking that choice to actual $$ spent by the consumer, as opposed to 3rd-party payor HC.
JMO.
Posted by TP @ 17:01 on 10/03/05
TP,
I think we're agreeing on pretty much everything about the HSAs. I think they're a great idea.
However, I'm afraid I don't think it quite falls into the category of a transformative idea, and that's the point I was trying to make.
Posted by another precinct chair @ 14:01 on 10/04/05
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