Family health: $21,000 a year

Economist bashes Bush HSA proposal

WASHINGTON, Feb. 6 (UPI) -- President Bush's health savings account (HSA)plan will mean income-based healthcare rationing, an economist said Tuesday.

"Should healthcare be cheaper for high-income people?" asked Princeton economics professor Uwe Reinhart at the National Health Policy Conference in Washington. "Is this a faithful reflection of America's social ethic?"

Assuming a premium rise of 8 to 10 percent over the next 10 years, the cost of keeping an average family healthy--including insurance premiums, deductibles and co-payments--will be $21,000 per year, far more than low-income families can afford, he said.

And giving a tax break for HSAs will help the wealthy, who pay a relatively high tax rate, but do little to alleviate the problem of soaring healthcare costs for the poor, who will likely be forced to forego medical treatment.

Saving the maximum allowed by HSAs, which could be increased to as much as $10,000 per year, is "easy when you make $200,000, harder if you make $30,000," he said.

It is also not clear if patients will be willing and able to gather information and make informed decisions about treatments, as they would be called on to do in a transition to a system of individually-based health savings accounts and high-deductible insurance, Reinhart added.

Finally, if paying for medical expenses out of pocket is really about consumers taking charge, he asked, why do corporate executives always negotiate for excellent insurance as part of their compensation packages?

"I propose that coronary bypasses for corporate executives cost $1 million," he said, "so they can have skin in the game and be empowered." source: UPI