Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Some Pages for a Book on HSA

Subsidiary Issues

But we are surely a long way from being able to predict the current cost of care, to say nothing of future care. Whatever it is, it is large, and would be less if we switched from pay-go to Health Savings Accounts, cleaning up our books in the process.

Others may improve on them, but that states the goal. As the saying goes, "every ship on its own bottom". Even if the package fails to cover all costs, it is obvious that saving money at interest will result in more money than spending it immediately and gathering no interest. You will notice it makes a 3% inflation assumption. Shifting the money with interest promises more money for healthcare, than not shifting the money. The dynamic scoring has been found by experience to be at least 20%, and possibly as much as 30%. How long it will take to work off this burden is unpredictable. What is predictable is that with enough time it will do so, and the surplus can then be applied to the second mistake we have made.

Proponents of a single-payer system have focused their attention on the fact that every person attaining 66 years of age is eligible for Medicare, regardless of income level. So a start toward that goal was made by giving Medicare to disabled persons. Unfortunately, disabled persons under the age of 66 are usually disabled for life, and thus have a considerably higher cost to the program than the "normal" recipients. There are five million of these disabled persons, as against fourteen million regular members. The consequence is the addition of younger disabled persons greatly increases the average cost of all recipients. As a consequence, lifetime Medicare costs are overstated, and the pay-go problem is a little easier to solve. Unfortunately, shifting the cost of the young disabled to another program will not reduce their cost, but foreshadows the financial disaster which could befall us if we adopted a single-payer approach. The true cost of the program is further confounded by the tendency of people to store up a backlog of medical expense, in anticipation of free care in the future.

Proponents of a single-payer system have focused their attention on the fact that every person attaining 66 years of age is eligible for Medicare, regardless of income level. So a start toward that goal was made by giving Medicare to disabled persons. Unfortunately, disabled persons under the age of 66 are usually disabled for life, and thus have a considerably higher cost to the program than the "normal" recipients. There are five million of these disabled persons, as against fourteen million regular members. The consequence is the addition of younger disabled persons greatly increases the average cost of all recipients. As a consequence, lifetime Medicare costs are overstated, and the pay-go problem is a little easier to solve. Unfortunately, shifting the cost of the young disabled to another program will not reduce their cost, but foreshadows the financial disaster which could befall us if we adopted a single-payer approach. The true cost of the program is further confounded by the tendency of people to store up a backlog of medical expense, in anticipation of free care in the future.

Others may improve on them, but that states the goal. As the saying goes, "every ship on its own bottom". Even if the package fails to cover all costs, it is obvious that saving money at interest will result in more money than spending it immediately and gathering no interest. You will notice it makes a 3% inflation assumption. Shifting the money with interest promises more money for healthcare, than not shifting the money. The dynamic scoring has been found by experience to be at least 20%, and possibly as much as 30%. How long it will take to work off this burden is unpredictable. What is predictable is that with enough time it will do so, and the surplus can then be applied to the second mistake we have made.

The young disabled are part of the thirty million people who are unable to pay for their own care, regardless of whether the disability to earn was or was not self-inflicted. We must forget that aspect, since no insurance changes will lessen it. Nor is cost-shifting within the hospital a sustainable approach, as innumerable examples demonstrate.

 

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