It is hard to turn on the nightly news without hearing more and more of the increasingly ubiquitous healthcare debate. With one side pushing for government-funded healthcare for all and another side urging lawmakers to look for more affordable healthcare solutions, it can be tough to determine which healthcare reforms would best for the nation. However, just about everyone agrees that the current healthcare situation does require reform – and reform programs that are not only affordable, but also uphold the quality of the healthcare system across the country.
Health Savings Accounts are viable healthcare solutions that help to relieve the income tax burden for participants while allowing them to have a vehicle for saving money exclusively to cover the cost of their healthcare. But before anyone rushes to conclusions about what current healthcare solutions should be further developed or promoted, it is important to understand what is flawed with the current healthcare system and proposals.
Problems with the current healthcare system:
The current healthcare system is riddled with two major flaws: runaway inflation and lack of suitable coverage for individuals with pre-existing health conditions. While inflation may be difficult to control on a large scale, something surely needs to be done about the general tendency of health insurance providers to deny coverage to individuals with pre-existing medical conditions. These two problems are especially difficult to surmount for self-employed Americans and Americans working for small businesses.
Approximately 16 percent of all employed Americans are self-employed and 28 percent work for small businesses. Self employed individuals and individuals working for small businesses are often hard-pressed to find affordable healthcare plans that will provide suitable coverage for their healthcare needs while still meeting their budgetary restrictions.
The current healthcare reform proposals have a solution for the uninsurability issue: make all healthcare plans “guaranteed issue” regardless of an applicant’s preexisting conditions. With such a plan, any applicant would be able to get healthcare coverage. However, as a result of these more liberal healthcare membership plans, Americans would likely see rising healthcare and premium costs across the board. Simply put: there’s got to be a better solution for affordable healthcare for all.
Keys for a better healthcare system:
There are a couple of requirements for a better healthcare system that can help to ensure that plans are more affordable for the masses and that coverage maintains a level of quality for all recipients. The first of these two keys is transparency.
Many Americans receive healthcare services without ever knowing what the cost of those services are. This is because hospitals and doctors very rarely publish the prices for the services they offer and many Americans rely on their insurance policies to cover the costs. Without published prices, patients (or insurance companies) are often required to pay the cost of a service they receive without ever getting an opportunity to negotiate the price, look for competitive pricing elsewhere, or decline a service due to the price.
In turn, hospitals and doctors have little pressure to reduce their rates in order to stay competitive in the healthcare marketplace. Moreover, when insurance plans cover the cost of a service, patients rarely get involved with the process of finding the most affordable provider or solution.
However, when individuals have a Health Savings Account, they pay for their healthcare services directly, ensuring that they are aware of the prices for selected services that they have received. As the consumer becomes closely involved with paying for his or her healthcare services, the consumer is in a better position to look for competitive rates and options that can lower his or her costs.
Essentially, with Health Savings Accounts, consumers compare prices and quality of services, which, in turn, compels doctors, clinics, pharmacies, and all healthcare providers to improve their services, decrease their prices, and offer better solutions than the competition.
Competition is at the heart of a free market economy, such as the American economy, and helps to keep businesses constantly striving to improve their services, products, and affordability.
The second key for a better system requires the system to encourage each consumer to have personal responsibility when it comes to finances and decisions about their personal health. Most Americans would agree that they should not have to pay for another person’s medical expenses – especially if those medical expenses are a result of poor lifestyle choices.
However, with the current system and set of healthcare reform proposals, every American shares the burden of paying for the healthcare for every other American – regardless of an individual’s own use of the healthcare system. As any kindergartner might put it: that’s just not fair. Americans should, instead, be encouraged to have personal responsibility over their health and finances.
With a Health Savings Account, Americans are rewarded for having personal responsibility by being able to take advantage of a tax deduction that is equal to the amount of money they set aside in their health savings accounts to pay for medical expenses. By saving money for one’s own medical expenses, individuals will reduce their burden to society and be financially responsible community members. Moreover, when individuals know that they are responsible for the cost of their own healthcare, they are more likely to make wise decisions that will improve their health; not detract from it.
Americans will inevitably see many changes coming about in the healthcare system over the coming years as the current Presidential administration works closely with Congress to reform the system. By recognizing the efficacy and far-reaching potential of investing in Health Savings Accounts now, Americans can begin to develop financial autonomy that will allow them to make better decisions about their healthcare years down the road – regardless of what healthcare reform plan the nation adopts.