Philadelphia Reflections

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

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The Customers Help Out

There was a second major difference between ACA and HSA, as we will increasingly call the two programs. This difference was philosophical. The ACA runs to thousands of pages of regulations, while the HSA could be described in a few paragraphs. You get the feeling hundreds of eager kids are at work prescribing every conceivable contingency of Obamacare, providing for every imaginable angle. Much merriment is provoked by the new ICDA code when it provides a code for injuries sustained in falling out of a spacecraft and many other remotely conceivable medical events of little interest to a practitioner. But that is quite typical of the whole approach, which took six years after passage to get to the point where it could launch the fumbling mess of computerized registration.

By contrast, some of the most prized features of Health Savings Accounts was discovered by the clients. The originators of the idea had assumed there was no further use for them once Medicare was in their picture, but what would you do with any left-over surplus? So, it was provided that HSA became an IRA at the age of 66. You weren't forced to disgorge them, but you lost the extra tax deduction for healthcare usage. The use of this quirk became apparent when it was discovered that many subscribers paid small medical bills out of their pocket rather than deplete the tax exemption. They were saving the exemption for later when they might need it for really big medical bills, a really shrewd assessment of the situation. From this came the concept of deliberately overfunding the accounts, so the compound interest would be available for retirement, and the available funds could be more appropriately apportioned between the two needs of old age. It's now recognized as one of the best features of the program, apparently unique among health plans. And as we will see, it was the foundation for other extensions of the interest-bearing interval.

How often have readers of this book had the experience of finding a flaw in a company's procedures, only to get the cold shoulder from the manager when it was requested he fix it? John Wanamaker famously repeated the slogan "The customer is always right," but even the department store he made famous forgot his warning, and has gone out of business.

Originally published: Monday, November 02, 2015; most-recently modified: Thursday, June 06, 2019