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Commentary

Patient Power
Investor's Business Daily, 2-17-06

Investor’s Business Daily has become an invaluable source of smart, market-friendly opinion commentary, and this editorial is no exception. Here, IBD takes on critics of HSAs by puncturing several red herrings that regularly confuse U.S. health policy debates.

During his State of the Union address, Bush asked Congress to give poor Americans refundable tax credits to help them buy basic health insurance and to expand health savings accounts so that more small businesses can take advantage of them.
Should Congress follow Bush's lead, more Americans will have health care coverage, and costs, including insurance, will fall. Critics say there's a big problem: As a Los Angeles Times editorial recently put it, "Nearly 46 million Americans live without health insurance," and Bush's plan doesn't "address the broader problem."

First, that 46 million figure is not established fact. It's an estimate. The Times could have just as easily used 36 million, a figure arrived at by a study commissioned by the federal government. Or it might have used 19 million, the number determined by the Census Bureau's Survey of Income and Program Participation.

But those numbers would not bolster the implication that there's a crisis that needs immediate attention -- and lots of public money. Second, the ranks of the uninsured are not necessarily swollen with those who have been "left behind" or are just too poor to buy insurance. A large number are uninsured out of choice: They're young and healthy and therefore don't see the need to buy health insurance. Or they choose to use their limited dollars elsewhere. So the uninsured will be with us always. But their numbers can be trimmed. That's where health savings accounts come in.
"In just two years, more than 3 million consumers -- many of whom were previously uninsured -- have chosen health savings accounts," says Karen Ignagni, president and CEO of America's Health Insurance Plans. Third, expanding HSAs and allowing refundable tax credits for health insurance costs will not only address the uninsured issue, but also help bring down premium costs. …
HSAs will give people incentive to limit unnecessary trips to the doctor. As demand falls, so will costs. The laws of economics dictate that a dip in premiums will follow. And as coverage increases through HSAs, premiums should fall even further. Why? There will be fewer uninsured, and so the costs of caring for those without insurance will shrink.

Critics of America’s current health system like to say market-driven health care is an oxymoron that’s bound to fail. What we have now, however, is a third-payer system where consumer choice and responsibility for health care decisions is severely constrained, and employers and government foot the bill. That bill has been rising steeply and steadily, and is the underlying reason that our system is undermining the vitality of the larger economy. Before we condemn consumer-based solutions in this sector, we should try them first.



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