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Confusion About Ideal Medical Saving Accounts: Part 1

Stanley Feld M.D.,FACP,MACE

I agree with the general goals of healthcare reform as outlined by President Obama. They are universal healthcare, affordable healthcare, and quality healthcare. The problem is the route he is taking will not achieve his goals.

His route will increase bureaucracy, decrease freedoms of individuals to choose, decrease quality and increase the cost of care.

A reader question highlights the confusion about the ideal medical saving account.

“ Do I understand you expect me to pay $500 per month toward tax free trust account and also budget $500/month for medical expenses toward my deductible?

How does a person making under $28,000 year do this!

The answer to the question is no.

The government or your employer would pay the $500 per month for you into a trust account. This would put the first dollar coverage in consumers’ hands rather than the healthcare insurance industry’s hands. The trust account would serve as an economic incentive for consumers to become wise shoppers for medical care and for them to be responsible for their own wellness. What was not spent of the first $6,000 would be in consumers’ retirement account rather than in an account for future healthcare expenditures.

Consumers would force providers to be innovative and compete for the consumers’ healthcare dollars just as Wal-Mart, Target, and Amazon do. Government’s position should be to provide appropriate consumer education to protect them and become informed shoppers for their healthcare needs.

There are several new innovative practice and healthcare insurance systems being developed by physicians that will reduce the cost of care by marginalizing the healthcare insurance industry’s influence and control over the healthcare system while reducing physician overhead.

I will discuss some of these innovative practice and healthcare insurance systems in the near future.

President Obama is willing to spend 1 trillion dollars over the next ten years to repair the healthcare system in addition to the many billions President Obama has secured in the hastily prepared “economic stimulus package.” It is money that will be wasted because his healthcare reform package can only increase healthcare complexity and decrease access to care. It will also increase the healthcare industry’s profit at the expense of medical care to consumers.

Consumers should be motivated to be in charge of their healthcare needs and expenditures. President Obama’s healthcare team thinks a large and inefficient bureaucracy will do it. He has only to look at the failed system in Massachusetts.

Everyone agrees that Medicare and Medicaid have failed. Seniors, in general, are satisfied with Medicare coverage until they have to pay all the deductible costs.

Some are able to cover the deductible costs with additional insurance (Medigap or Medicare Advantage) coverage. The premiums for Medicare are high with the upper limit for full coverage being $15,000 a year. The cost of the Medicare premium is not noticed because it is taken out of their social security payment.

The premiums with coverage for deductibles and drugs can vary from $3,000 per persons to $7,500 per person with after tax dollars. Seniors are all means tested by direct communication between the IRS (tax returns) and Medicare.

Despite high premiums the government has to subsidize healthcare costs at an unsustainable rate. New innovative delivery of healthcare is essential in order to deliver healthcare at an affordable cost, universally, and with increased quality.

Expanding the Medicare system to all citizens will simply make the deficit worse. The CBO estimates that in 40 years the yearly deficit will increase by 100 trillion dollars with the present healthcare system.

There are ways to accomplish President Obama’s goals. The system has to be simplified. Consumers have to be in control of their healthcare dollars and be responsible for their health. President Obama’s healthcare reform plan will make consumers more dependent on government and healthcare more expensive.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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