Originally published February 26 2006
Critics question Bush's proposal for Health Savings Accounts
by Mike Adams, the Health Ranger, NaturalNews Editor
Allan Hubbard, director of the president's National Economic Council, questions the willingness of most Americans to shop for competitive medical treatments, which is why he thinks health savings accounts (HAS) are a bad idea.
President Bush's proposed expansion of Health Savings Accounts depends on a premise that research shows is questionable: that Americans want more financial choices in their lives.
Bush proposes to offer tax breaks to individuals who set aside pre-tax dollars in HSAs to pay their medical expenses.
These HSAs are linked to high-deductible insurance plans, where consumers agree to pay higher upfront expenses in exchange for lower premiums than they'd pay in a traditional employer-based plan.
The theory behind these HSAs, said Allan Hubbard, director of the president's National Economic Council, is that "as people spend more money over which they have discretion, they're going to be concerned about spending it wisely."
Armed with knowledge of true health-care costs, they'll be more discriminating consumers.
That would lead overall health care spending to drop and, over time, insurance premiums would fall, too.
Do Americans, as Hubbard suggests, really want to shop for a cheaper doctor, x-ray or blood test?
Research into Americans' behavior with retirement savings plans suggests that they don't.
It shows that people, in fact, shrink from such decisions.
"The average person is not making any choices on a proactive basis, on an annual basis.
We have more anecdotal evidence that the individuals are not really sure what the choices are," said Lori Lucas, director of retirement research for Hewitt.
So do Americans want more financial choice, or "ownership," as President Bush calls it?
Yes and no, according to Columbia University behavioral economist Sheena Iyengar.
She points to research that shows consumers routinely say they want choices, but when presented with too many, they avoid making decisions.
Retirement savings are for the distant future, while HSAs are for more immediate needs.
And HSAs work like a checking account, where money goes in and out to pay for medical expenses.
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