Health Insurance - through the Looking Glass

Into the Conservative mind. If Socialized medicine is bad, making employees pay for their own health care must be good.

Those of you who read this blog regularly know that a few weeks ago, I wrote on a trial balloon floated by the Bush administration to eliminate the corporate tax deduction for companies that cover health insurance. It will save $926 Billion over the next five years, and someone obviously thought that it would be a great way to pay for the war and the Bush tax cuts.

Additionally, it would free large companies from what has become a de facto required job benefit. Professional employees simply won't accept a full-time job that comes without health insurance, and we have become very educated in comparing the value of benefits. If the tax break goes away, corporate America can plead hardship and cut the benefits entirely. After all, we have to compete with every country paying people one tenth of what we make, and we're making the hard choice by not moving your job to China...

The Republicans are now changing their tactics. From the L.A. Times:

WASHINGTON — Emboldened by their success at the polls, the Bush administration and Republican leaders in Congress believe they have a new opportunity to move the nation away from the system of employer-provided health insurance that has covered most working Americans for the last half-century.

In its place, they want to erect a system in which workers — instead of looking to employers for health insurance — would take personal responsibility for protecting themselves and their families: They would buy high-deductible "catastrophic" insurance policies to cover major medical needs, then pay routine costs with money set aside in tax-sheltered health savings accounts.

It gets worse. But it's OK. The guy who doesn't want you to go for regular checkups is a doctor.

With Democratic strength reduced, President Bush, Senate Majority Leader Bill Frist (R-Tenn.) and House Ways and Means Committee Chairman Bill Thomas (R-Bakersfield) are pushing for action.

Supporters of the new approach, who see it as part of Bush's "ownership society," say workers and their families would become more careful users of healthcare if they had to pay the bills. Also, they say, the lower premiums on high-deductible plans would make coverage affordable for the uninsured and for small businesses.

"My view is that this is absolutely the next big thing," said former House Speaker Newt Gingrich, whose consulting firm focuses on healthcare. "You are going to see a continued move to trying to get people involved in the process by owning their own health accounts."

Remember those Healthcare Savings Accounts that seemed so innocuous a few years ago? Kind of like the cafeteria plans that a lot of us buy into to cover our deductibles. Here's the idea in making them portable, and it's to screw us.

Health savings accounts, known as HSAs, have already been approved. They were created as a little-noticed appendage to the 2003 Medicare prescription drug bill.

HSAs have had a strong start in the marketplace. Although regulations spelling out how they would work were not issued until mid-2004, as of Sept. 30, about 440,000 people had signed up. And more than one-quarter of employers say they are likely to offer them as an option.

The accounts are available only to people who buy high-deductible health insurance, either through an employer or individually. Consumers can set aside tax-free an amount equal to their deductible. Employers can contribute to workers' HSAs but do not have to. Unused balances can be rolled over from year to year, and employees take their HSAs with them when they switch jobs.

Of course, if those employees can get away with only paying for a low-cost, catastrophic care premium and pocket the difference...

But Wal-Mart can offer healthcare, because there's a tax break seemingly designed for them. And you can count on hearing about this in the SOTU, framed as a tax credit to provide health insurance to the working poor. Get out your shovels on Wednesday, kids. It's going to be a long night.

Despite the record federal budget deficit, Bush on Wednesday proposed additional tax breaks and subsidies for HSAs, particularly for low-income families. He also called for a tax credit to help small businesses offer the plans to their employees. The low-income aid would be worth a maximum of $3,000 per family.

Greg at The Talent Show manages to condense it all into a single paragraph, and he's right. We're going to get screwed every time we hear the words "Ownership Society."

So, let's sum up the GOP plan for medical overhaul that will be part of this "ownership society". First, they want to encourage employers to dump you from your existing insurance plan (and if you read the rest of the article, if doesn't sound like they need much convincing). Second, they want to force you into an expensive insurance plan that will only cover "catastrophic" medical procedures. Third, on top of the higher cost of your insurance policy, they want you start saving up any extra cash that you probably don't have lying around. Finally, the whole point here is to ease the financial burden on your employer, may you pay more for less coverage, and encourage you to seek medical help as rarely as possible.