Philadelphia Reflections

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

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Pearls on a String:Further Extending Health (and Retirement) Savings Accounts
Pearls on a String: Further Extending Health (and Retirement) Savings Accounts. HSAs are the string. Retirement saving, Privatizing Medicare, and Shifting Childhood Costs-- are the Pearls. Other Pearls to follow.

Co-ordinating Obamacare With Health Savings Accounts

The Grand Plan for HRSA Networks, Very Briefly

So, we discover Health Savings Accounts are not snake-oil, a quick-fix solution to every healthcare problem ever complained about. No good idea is improved by such exaggeration. What is offered here is a long-term plan for greatly reducing the cost of healthcare, conceivably cutting it in half. It has some features which would show quick results, and we must devise a transition plan which puts them first. But it might take fifty years to achieve it all, and much can happen to upset plans in fifty years. The plan of this book is to suggest what should be done, in more or less the order of when to do it. But first to sketch in -- very briefly -- the final goals for doing any of it.

What Have You Done for Me, Lately? What I propose is a healthcare network of existing systems, linked together one by one with the retirement and investment incentives of Health (and Retirement) Savings Accounts. The short term value of the network is to create a unified transfer system to the more distant goals, providing some time to reach them. The HSA will be tempted to wander from its mission but should remain as simple as possible -- a gussied-up transfer vehicle for healthcare funds. Most of the elements are in place for this, although some enabling amendments might be suggested. Meanwhile, the option must persist for using HRSAs by themselves as total lifetime coverage, since transitional changes may leave some people without suitable alternatives. But repairing existing programs rather than replacing them--Medicare, in particular--usually offers the advantage of shortening the transition time. The long transition period is certainly what people will find hardest to accept.

With the framework in place, the institutions attached to it should be gradually coaxed into externalizing their surpluses (dividends or their equivalent) instead of re-investing them, allowing surplus to flow between low-cost and high-cost eras of consumers' lives within the network, ultimately ending up as individual retirement financing in the private sector. That last part may be hard for people working in the public sector to accept because it removes the government as the insurer of last resort for pensions. But for reasons too obscure to describe here, that was never possible as long as Congress controlled the extension of the national debt. And that, in turn, was driven by the conviction the private sector was a superior creator of wealth, not an unlimited source of taxes. Ultimately, our model is the goose that laid golden eggs.

An easy early step would be to create following-year bonuses for low expenditures within the "pearls" on this string. Much will depend on intervening national politics, and it is intended to avoid including ACA or employer-based insurance until the direction clarifies. Meanwhile, everyone might have the option of adopting an HRSA fully, plus Medicare, plus the childhood transfer mechanism. The ultimate unified vehicle would be an accordion-structured First and Last Years of Life Reinsurance (see below), although if several variants emerge, that would be fine.

The final step, integrating the ACA and present employer-based systems is left entirely out of the project for the first few years. But driving it onward, posing the threat of retirement destitution if you don't, would be the availability of retirement financing from every penny you legitimately save from healthcare, from the day of birth to the day of death. Since no one wants to die, and very few enjoy living in poverty, restraining this vast incentive must rest with its health beneficiaries, since everyone is its ultimate beneficiary. When scientists finally do cure the worst diseases cheaply, the retirement folks may be permitted to start to win the healthcare vs. retirement pension competition.

Special projects and program outliers, such as prison inmates, mentally and physically disabled, and illegal immigrants, are left for us to find solutions more tailored to their needs, and here are not dealt with further. This proposal deals with the great majority of Americans who are not in poverty, not handicapped, and not poorly treated. Surely they should have a voice in such a vital topic, which from their perspective could be considerably cheaper, and rather easily improved over present uncertainties. Along the way, if they themselves could devise something beyond golf, bridge, gardening, and travel to occupy thirty years, it would be an enhancement to the community. Arguments can be made for regulating immigration, but not ones for providing servants for a rentier society.

We begin integration with the big gorilla, Medicare. In the first place, the program is bleeding money. The first step in saving money should be to stop losing so much of it, and that definitely won't be easy as long as serious illness keeps migrating into the Medicare age group. Furthermore, it contains the most expensive item of all, terminal care. The transfer of terminal care out of Medicare by the Last Four Years of Life transfer, should facilitate this decision. Other programs may get financially healthier if we do nothing. If we do nothing about Medicare, it probably will only get into deeper trouble.

At the moment, our best dream is the scientists will find something as cheap as aspirin, which will cure something as expensive as cancer. A century ago and roughly simultaneously, scientists discovered cures for pernicious anemia and type I diabetes, both fatal conditions. Pernicious anemia has virtually disappeared with occasional injections of a vitamin, while diabetes has grown to be about as expensive as anything, despite lifesaving injections of insulin. Unless you want to gamble on similar mixed outcomes in the future, read on.

Originally published: Tuesday, July 26, 2016; most-recently modified: Friday, May 31, 2019