Future Directions for Health Savings Accounts
New topic 2016-03-29 20:37:09 description
The final resting points for serious healthcare costs are easily foreseeable: they consist of the first day and the last day of life. How long it will take to get there is not predictable, but it is safe to say that everyone will always have the cost of being born and the cost of dying. Whatever other costs will intervene is somewhat up to us, and somewhat up to science. Why not build a reimbursement system which is flexible enough to include present and intervening costs, phased in and phased out, and eventually ending with the first year and last years of life? Let's look at what it might look like.
It must be flexible enough to include new remedies, but tough enough to exclude frivolous ones. When a disorder is eradicated, the money to treat it, or the programs intended to fund it should be transferred to retirement expenses. Otherwise, it is clear that Congress and/or human nature has a tendency to appropriate unused funds to other purposes, like battleships or bridges to nowhere. Even non-fatal illness can be an optional luxury item for entitlement. Even the treatment of fatal illness can evolve into bare-bones versus luxurious varieties, but such choices are more easily defended as legitimate options for society to decide at the time. If we stick to such principles, it seems clear the cost of healthcare will gradually decline, while the cost of retirement will gradually increase. For the savings in one category to flow over to the unfunded needs of the other, is hard to argue with. And that's what Health Savings Accounts already do, although there seems almost no limit to what might be required for retirements whose length is impossible to predict. Because we are nowhere near the final average retirement extension, it currently appears there is no need to limit overfunding. For a while, inheritance taxes will take care of any surplus. Indeed, adjusting inheritance taxes may be the best possible way to establish, and re-establish, and fight about, the upper limits to health care expenditure in the far future.
Reflections about the recent past are convincing. If we agree on these overall guidelines, we notice that health costs for working people, the ones who ultimately pay the bills for everybody, have already declined so much the system is unstable to a worrisome degree. Some people like to call it the hockey-stick, but it resembles a U, with higher costs already visible at the beginning and end of life. In fact, we appear to need nothing but the passage of time, before the hockey-stick (before, and after the beginning of Medicare) appears. Our problem then will take two forms: to reduce the cost of Medicare and to reduce the costs of early childhood. Surprisingly, the costs of early childhood are more difficult to pay for, so let's start with Medicare.
Originally published: Thursday, March 31, 2016; most-recently modified: Wednesday, May 15, 2019