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Wednesday, January 21, 2004

Health Savings Accounts
And starting this year, millions of Americans will be able to save money, tax-free, for their medical expenses in a health savings account. -- from aWol's State of the Union Address.

Bush's health care "plan" could be called the "Leave No Corporation Behind" plan. While leaving millions of Americans with an expensive, hit-or-miss system of health care, it GUARANTEES that the HMO's, insurance companies, and big Pharm will get their billions. I certainly don't know the ins and outs of all of it, but I am familiar with Health Savings Accounts (HSA's), since I've had one the last two years. In an HSA, you put a portion of your paycheck (automatically withdrawn in most cases) into the HSA. Then, whenever you have a qualified health-related expenditure not covered by your health insurance (if you've got it, which I do), such as deductibles, co-pays, non-prescription drugs, orthotics, crutches, eyeglasses, etc., you fill out a form, send in the receipts, and the company managing the HSA sends you a reimbursement check (from your own money). The benefit? All the money you put into the HSA is tax deductible. The catches? First, you don't have use of your money until you make a claim. Worse, if your qualified expenditures don't match what you've put in (or you forget to file, lose receipts, etc.), the company managing the HSA keeps the money.

I'm ashamed to admit that I fell for the scam. Two years ago, I signed up. "Fortunately," I was ill a couple of times and diligently pursued optional expenses to make sure I got my money back. Last year, I had almost no expenses, lost the receipts on those I did, and the HSA walked away with $180. This year I wised up and didn't sign up. I've always thought that most insurance was a scam; you give some corporation lots of money over the years, then if something bad happens to you AND you can prove you weren't to blame AND you complete all the paperwork, the less-unscrupulous of the insurance companies will give you some of your money back. They will of course raise your rates to recoup the money. But HSA's may take the cake. They get the interest on your money regardless, and they get to keep it all if you don't get sick or you forget to do the paperwork.

Like everything in Bush's speech, HSA's are a way to take money from those who have little and give it to those who have much. And they offer no benefits at all to low-income people. The deductibility is on the federal INCOME tax, and as the right-wingers love to point out, those "lucky duckies" who are poor pay little or no income tax. They do, however, pay sales taxes and payroll taxes, and HSA's offer no relief from these. So aWol's call for HSA's is mostly a benefit to the companies that run HSA's, with a moderate benefit for the wealthy who get sick and conscientiously file the forms.