Sunday, November 20, 2011

Health Savings Accounts for Universal Coverage

There is no doubt in my mind that we need universal coverage, but at a lower, not a higher percentage of gross domestic product devoted to health care. We need to provide care without increasing demand. The answer is health savings accounts (HSAs) with high deductible catastrophic insurance (HDCI) which has proven to dramatically decrease demand and costs in Indiana (WSJ March 1, 2010). Tax credits for those who pay income taxes, the earned income tax credit, and federal subsidy for the remainder would fund HSAs for all Americans. These accounts would be created at birth, grow tax free and provide the funding for health care when elderly. All Americans would also have a choice of several nationally offered HDCI, providing true insurance. Thus, each generation would be accumulating the capital to care for itself when elderly instead of depending on ever shrinking succeeding generations. Upon death the accumulated unspent capital would be passed on to their beneficiaries.