The Observation Deck

Roy - with all due respect, get a soul.

Well!

You can't find the answer because there isn't one. These bills, and many others Congress has engaged in, are unconstitutional.
So instead, you go on the attack.

"It is error alone which needs the support of the government. Truth can stand by itself."
--Thomas Jefferson

Charlie Page asks....

Why does 5 stitches cost $1,000 and healing a broken arm $2,000?

Because the person who gets stitches or a cast “pays” for it with other people's money.

Perhaps the biggest reason health care has gotten so expensive is because in most cases, someone who “buys” health care pays for it with other people's money. As long as that is the case, health care will always be expensive. There is little motivation on anyone's part to shop for medical care or to limit it to what is really needed.

My family has a high-deductible insurance plan coupled with an HSA. Last fall my oldest daughter hurt her hip and the orthopedist recommend an MRI. Since I'm spending my own money, I shopped around. I was able to get the MRI for $250. I'm not telling you where (or how).

I bet you I can get five stitches for under $200. Not sure about the broken arm.

I love my high deductible plan and the HSA. With a little effort, it cuts my family's medical costs dramatically. By the way, I don't pay any medical expenses out of the HSA. I pay out of my pocket and let the HSA account build up. An HSA is the only source of forever tax-free salary and earnings, if you save it to spend on medical expenses after you retire.

In fact, high-deductible insurance and HSAs are such good ideas that Congress is considering killing them both. I read yesterday where Congress wants to substantially limit deductibles and HSA contributions as a part of so-called health care reform. The maximum family deductible would be only $4000. Mine is $5000 now and I'm considering going to $10,000 because I'm getting good at limiting medical care and shopping for it when necessary. Lowering deductibles would of course keep premiums high, and cause more medical expenses to go through insurance company hands. Of course our Congress is controlled by the FIRE industries (finance, insurance, real estate) so I'm not one bit surprised. “Health care reform” is turning into just another sop for the insurance industry. No public option, no Medicare buy-in, overpriced mandated insurance for healthy young people, and now the possible elimination of high-deductible policies and HSA's.

The fact is, health insurance these days really isn't insurance. It's a prepaid medical plan. It's like buying one of those prepaid auto maintenance plans. You know, where you pay month in and month out and eventually if your starter goes the company finds some reason to deny the claim (or has already gone out of business). Nobody in their right mind buys such plans and nobody in their right mind would buy what passes today for traditional health insurance, if there was any other option. Today's health insurance system provides the greatest benefits to insurance companies. Congress and Mr. Hopey-Changey are doing very little to change things.

Tim, I'd be interested in knowing more about your plan and the experiences you've had. Not that I need it, but I am nonetheless intrigued.

Roy, I asked my company's health insurance broker to send me a couple links and this is what I got....

http://www.affinitybenefits.com/acrp/hsa/HSA_Road_Rules_Consumer_9th_Edition_2009.pdf

https://healthsavings.usbank.com/usbankhsa/forms/QandA.pdf

I gave them a quick look-see and they do look like very good resources. Probably more than you are looking for though.

(By the way there's a nasty virus about that exploits an Adobe Acrobat Reader vulnerability. Get your Reader updated to version 9.30 or later. Seriously.)

As I said before, one big reason that health care has become so expensive is that there is little motivation on the part of the health care “buyer” to reign in costs. Check out this chart below. What it shows is that the percentage of health care expenses paid out-of-pocket has fallen from about 45% in 1965 to about 12% in 2009 (updated amount that I've seen but not shown in the chart).



Is it just a coincidence that health care costs have skyrocketed during that period?

Another reason health care costs have risen is because there are diagnostic and treatment options that have become available in the last decade or two that are very expensive. There is no way you can compare the quality of the care we receive these days to that which was available 30-40 years ago.

But I do like our HSA because it lets me pick and choose the care we receive, and it rewards me for not spending money on care we really don't need.

side bar:

http://www.cato.org/pub_display.php?pub_id=11108

Those mandates and subsidies would impose effective marginal tax rates on low-wage workers that would average between 53 and 74 percent— and even reach as high as 82 percent—over broad ranges of earned income. By comparison, the wealthiest Americans would face tax rates no higher than 47.9 percent.

Over smaller ranges of earned income, the legislation would impose effective marginal tax rates that exceed 100 percent. Families of four would see effective marginal tax rates as high as 174 percent under the Senate bill and 159 percent under the House bill. Under the Senate bill, adults starting at $14,560 who earn an additional $560 would see their total income fall by $200 due to higher taxes and reduced subsidies. Under the House bill, families of four starting at $43,670 who earn an additional $1,100 would see their total income fall by $870.