Map of life expectancy at birth from Global Education Project.

Tuesday, June 14, 2005

More on the Ownership Society

As my 4 1/2 faithful readers know, the big Republican push to "reform" health care is based on getting everybody into high deductible, high co-pay insurance plans, and then encouraging them to save up for less than catastrophic medical expenses through tax-advantaged "Health Savings Accounts" (HSAs).

You don't even have to be a policy wonk to see what might be a little questionable about this idea. It discourages people from seeking routine, preventive care, or from taking their blood pressure meds; and people who aren't wealthy a) get very little benefit from tax deductions for HSAs and b) won't have enough in their account, if they have such an account at all, even to cover those deductibles and co-pays should they have major medical expenses.

It might take a little bit of wonkery to understand some of the other reasons why this is an extremely terrible idea. These have to do with some of the idiosyncracies of markets for insurance, and for medical services. I'll wade into those deeper waters anon.

Meanwhile, with little attention from the media (somehow that liberal bias doesn't seem to be working in this instance), we're already getting on down that road quite a ways. A new Commonwealth Fund report in Health Affairs reveals the consequences. Here's the abstract:

Health insurance is in the midst of a design shift toward greater financial risk for patients. Where medical cost exposure is high relative to income, the shift will increase the numbers of underinsured people. This study estimates that nearly sixteen million people ages 19-64 were underinsured in 2003. Underinsured adults were more likely to forgo needed care than those with more adequate coverage and had rates of financial stress similar to those of the uninsured. Including adults uninsured during the year, 35 percent (sixty-one million) were under- or uninsured. These findings highlight the need for policy attention to insurance design that considers the adequacy of coverage.

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