Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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SECTION SIX: Condensed Summaries

Simple Summary

Columbus and the Egg

Let's summarize, in a slightly different way. We started with the classical Health Savings Account (C-HSA), which may need a little updating, but appeals to millions of frugal people as a simple way to avoid the tangles of present-day healthcare financing. The law hasn't changed much, but used by millions of subscribers has turned up many surprising features, all good ones. Deliberately overfunding them has unexpectedly useful results, for example, in providing retirement income if you have been lucky with your health.

On that foundation then was devised New Health Savings Accounts (N-HSA), combining six more innovations, each of which is easy to explain, but in combination utterly transform the basic design. The extended longevity of the 21st Century makes compound interest in passive investing into a powerful investment tool and is used to reduce healthcare costs to the consumer, markedly. Secondly, improved healthcare for the working years has unbalanced the employer-based model, so sickness costs are getting crowded into retirement years. For this, the accounts permit extraction of the first year and last years of life, transferring their heavy costs to the working generation where employment-basing still makes sense. These complicated shifts may provoke suspicion until it is realized the cost would be almost imperceptible. And so on. With very little new legislation, most of this package is ready to go.

Lifetime Health Savings Accounts (L-HSA are patterned on a whole-life model. L-HSA won't work without some new legislation to edge around recent regulations and some outmoded premises. Multi-year coverage is cheaper but requires a longer commitment, so it needs to be precisely designed. Starting fresh, it directly addresses a host of problems hiding behind a century of habit. Its flexibility accepts a range of designs, stretching from self-insurance out of a bank's safe deposit box, stretching all the way to letting life insurance companies run everything. What you find here are my ruminations on the subject. They are not definitive, they are just a beginning.

That's a summary of the health insurance part of this book. There's also a long section on the Hidden Economics of Healthcare, the kind even most doctors don't know much about, and the public knows almost nothing. Some doctors will even disagree violently, and either say it is biased or decry washing our linen in public. At my age, there isn't much to worry about, so I feel the public will make better judgments about us if they know some of it.

Originally published: Thursday, October 15, 2015; most-recently modified: Wednesday, June 05, 2019