House Hearing Finds Approval for Health Security Accounts, With Some Dissent

Our David Hogberg attends a House hearing on Health Savings Accounts, and comes away with a few observations:

A good hearing on HSAs took place Wednesday before the House Ways and Means Committee, with CEOs from various businesses, such as Wendy’s and Buffalo Supply, talking about the generally-positive experience they have had with HSA policies, while folks from the Commonwealth Fund denounced HSAs as primarily for the healthy and the wealthy. (Testimony can be viewed here.)

Of particular interest was testimony from Larry Lutey of Lutheran Social Services, which is a nonprofit organization, who testified that, without HSAs, for many employees at LSS “the choice was between health insurance, and nothing.”

That perspective is worth keeping in mind when considering the testimony of Jean Therrien, executive director of Neighborhood Family Practice in Cleveland, Ohio: “The patients who seek care at our health center who are enrolled in high-deductible plans and those that are uninsured are indistinguishable from one another in their inability to pay for needed services,” she said. “They do not have first dollar coverage for preventative care, office visits, lab testing and prescription drugs.”

First, how many of those people with high-deductible plans would have no insurance at all if they didn’t have the option of a high-deductible plan? Some insurance is better than no insurance.

Second, how many of those people with an “inability to pay for needed services” spend money on cigarettes, alcohol and entertainment? Before you accuse me of insensitivity, look at the Consumer Expenditure Survey. If households making between $15,000 and $19,999 cut out the cigarettes, booze and half of their entertainment expenses they would have, on average, about $900 to put in an HSA.

A number of members of Congress spoke, including Representatives Bill Thomas and J.D. Hayworth. The most entertaining was perhaps Jim McDermott, who asked each person who was with a company that had HSA plans how much of their payroll went to cover health insurance. Despite one of the witnesses saying “4-5%”, Rep. McDermott asked why we couldn’t provide universal health insurance with 10% of payroll.

Such a question would, of course, come from someone who had never run a small business or was not an economist.

Indeed, he’s a psychiatrist!

David is a new member of the National Center team. Welcome aboard!

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