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Can You Believe This?Health Savings Account Threatened By The "Taxpayer Assistance and Simplification Act

Posted Oct 02 2008 3:15pm


Stanley Feld M.D.,FACP,MACE

The House of Representatives passed a bill called the “Taxpayer Assistance and Simplification Act” last week that will essential destroy Health Savings Accounts and the quest for consumer independence from the government’s control of the healthcare system. I have criticized HSAs in the past because they only give consumers partial control and not full control of their healthcare dollar. If you do not use the money you lose it. In my opinion this creates a perverse incentive that does not stimulate wellness. It stimulates potential abuse. Patients keep the money they do not spend with my Ideal Medical Savings Account. The MSA would increase incentives for wellness and decrease abuse, because if patients abused the system they losing their own money.

“Democrats have made affordable health care a mainstay of their election agenda, but apparently only if you're willing to get insurance through the government. Witness their stealthy assault on Americans who prefer the private-sector option of Health Savings Accounts.”

No one in the Democratic Party dominated House of Representative nor the Democratic Party’s presidential candidates seem to understand the government can not afford to have a government dominated system. It is also clear they do not trust patients to pursue their vested interest.

“The House passed legislation on Tuesday, the mis-named "Taxpayer Assistance and Simplification Act," that contained the awful provision that would throw a mountain of paperwork at Health Savings Accounts.”

< President Bush sent a note to congress stating that he would veto the bill if it contained the anti HSA provision. I do not think the Senate will accept the provision either. The frightening thing is the lack of understanding by the Democratic Party of what is necessary to Repair the Healthcare System.

“A key player here is Ways and Means Health Subcommittee Chairman Pete Stark, whose main purpose in politics is to give the U.S. a government-run health-care system. He is a known opponent of HSAs – once comparing them to "weapons of mass destruction" – because they introduce more individual choice into the health-care marketplace.”

“Mr. Stark and his friends want to impose the same bureaucratic overhead even on spending that consumers do with their own money. The Senate should stop this one dead in its tracks.”

I thought Pete Stark finally understood the folly of his thinking. He trusts neither physicians nor patients. I was misled by his comments in Forbes magazine when he admitted he made a mistake with his Stark Laws.

“This week, the House passed legislation that included a provision to require every HSA transaction be reviewed and verified as a legitimate medical expense. Democrats say this is to ensure that consumers are using their tax-free withdrawals for a knee replacement, rather than a new iPod. In reality it adds a layer of bureaucracy that could sharply reduce the appeal and cost savings of HSAs."

Presently the healthcare insurance industry administers these health savings accounts and does not permit misuse to occur. Maybe the only way the Democratic Party can reach its goal of government controlled single party payer healthcare system is to destroy HSAs?

“Pushing for the provision was a company called Evolution Benefits, which has patented a system for the substantiation of health-care expenses. Evolution's lobbyist, John McManus, was the former staff director of the Health Subcommittee under Republican Bill Thomas.”

Unfortunately, this is how the government works. It is influenced by vested interested other than the people it is suppose to represent. Republicans are furious at John McManus, a former Republican congressman’s staff director now a lobbyist.

“Liberals claim HSAs are insurance for the "healthy and wealthy," but there's little evidence this is true. “

There is no evidence that HSAs are only for the healthy and wealthy. It is a potential mechanism for the government to subsidize insurance for the poor and not so poor to promote patient responsibility and stimulate a substantial reduction in cost and increase incentive for citizens to improve healthcare habits. All congress has to do is pass a law saying everyone automatically will be insured using a community rating system and pre tax dollars.

“The high deductable insurance permits the insured to open an HSA and make an annual contribution up to $2,900 for an individual in 2008, which he can use to pay for ordinary health needs. Savings not spent in any given year can build up tax-free for medical expenses. HSAs also give consumers more reason to care about prices, bringing much-needed market discipline.”

A family contribution is over $5,000 in 2008.

“ In any case if people cheat on their HSAs, they are only cheating themselves.”

I wonder how many congresspersons really understand the problems in the healthcare system and what will motivate the people they represent?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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