Friday, October 22, 2004

In my attempt to arm myself with facts and arguments for my trip to the friendly neighboring swing state, I have looked into Bush's solution to the healthcare crisis: medical savings accounts. And I have to say that it doesn't make a lot of sense to me. Maybe someone who understands these things better can enlighten me.

Here's the proposal. At the moment, Americans are supposed to have health insurance, which pays for their healthcare. But the freemarketeers say this is inefficient: the people consuming the care don't pay attention to the cost, so they spend more than they should. What if, instead of paying a healthcare premium every month, you or your employer put money in a savings account? Then, when you needed medical care, you would have incentive to look for the cheapest provider and to forgo care that wasn't really essential. This sort of free market competition would drive down price. Meanwhile, you would still have traditional insurance to cover really expensive medical needs. This insurance would kick in once you'd paid a certain amount out of pocket. That way, you wouldn't be left high and dry if you were hit by a bus or needed a heart transplant.

The problem, as I see it, is that this provides a disincentive to get preventative care. It's hard enough to convince Americans to get pap smears or colonoscopies when their insurance pays for it. I suspect that if people had to pay out of pocket, they just wouldn't do it. And that means that a lot of people wouldn't get care until they had catastrophic problems, which would be dealt with by the old, supposedly-inefficient insurance system. I assume that it's a lot cheaper to treat someone with early-stage wonky blood sugar than someone with full-blown type-2 diabetes. Leaving aside the social costs of needlessly amputated limbs and unnecessary premature death, wouldn't medical savings accounts just end up costing more money down the line?

Needless to say, they also don't do anything about the problems of people who are uninsured. If your employer doesn't provide health insurance, I'm not sure why we should think he or she would pay into a medical savings account. And I suspect that, by transferring responsibility for day-to-day medical care to individuals, wholesale adoption of medical savings accounts would obscure the issue of people not having access to health care. After all, it's just a matter of personal priorities. If people choose to spend their money on food and rent rather than doctors' visits, that's just their rational choice, right?

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