More Bad News for HSA Proponents

Much has been made of the fact that President Bush is preparing to announce a plan to shift the burden of paying for healthcare from risk-pooling to personal savings in the form of health savings accounts, or HSAs. For a wide variety of reasons, this is an obviously terrible idea. It won't reduce the cost of healthcare overall, it will mean higher costs specifically for the sick and the elderly, and it will likely lead to bad healthcare decisions by understandably uninformed patients. We're already seeing an outcome similar to the latter with Medicare Part D.

As if to highlight how bad of an idea this is, the Commerce Department released numbers this morning indicating that the personal savings rate has dropped into negative territory. It is, as Martin Crutsinger of the AP puts it, "the lowest level since the Great Depression."

A negative savings rate means that Americans spent all their disposable income, the amount left over after paying taxes, and dipped into their past savings to finance their purchases. For the month, the savings rate fell to 0.7 percent, the largest one-month level since a decline of 3.4 percent in August.

The 0.5 percent decline in savings for the year followed a savings rate of 1.8 percent in 2004. There have only been three years that the savings rate has fallen into negative territory. The savings rate dipped by 0.9 percent in 1932 and the record 1.5 percent decline in 1933, years when Americans exhausted their savings to try to meet expenses in the face of soaring unemployment as the country struggled with the worst economic crisis in its history.

Bush's idea -- that has not yet been fleshed out in an actual policy proposal -- is that people should increasingly leave health insurance plans and put more money into health savings accounts. While this is obviously bad health policy, it's even worse as economic policy. These latest figures from the Commerce Department show that the American people are already at the end of their ropes, dipping into savings to pay their everyday bills. But the Bush administration thinks they're going to find money in the cushions to pay for medical bills? There is no guarantee that workers will see any extra money in their paychecks if they drop their insurance coverage. So they will likely be forced to choose between their HSA, their 401(k), their children's 529, and basics like food, shelter, and clothing. This is what the GOP calls "consumer-driven healthcare."

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The Inaugural Blue Jersey Podcast (w/ Rep. Rush Holt)

We're very excited to announce that our first podcast is live and ready to download. If you've already subscribed to our feed through iTunes, it should download for you next time you start the program. If you're not subscribed, you can do so by clicking here.

For this month's podcast, we sat down with Congressman Rush Holt to hear his thoughts on the upcoming State of the Union, political blogging, NSA domestic spying, rising energy costs, the President's upbringing (hint: it involved immersion in oil) and more.

On Medicare Part D: "I'm not going to accuse them of designing it to fail - although that thought has crossed my mind."

Holt answers the question: "Where are the Democrats?" and shares his thoughts on how to regain a Congressional majority.

If you're already subscribed to our feed, the podcast should download for you the next time you start up iTunes. If you have iTunes (free download) and haven't yet subscribed, just click the button below to subscribe to our feed. Otherwise, you can access the mp3 file directly through this link.

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Fighting Back Against Bush's Nightmare Healthcare Plans

A few days ago, it came out that a major point in President Bush's upcoming State of the Union address will be promoting his plans to shift the healthcare burden from a risk-pooling insurance system to an every man for himself system of health savings accounts. As many have pointed out, this is nothing short of nuts.

As busy as we are with Alito, warrantless wiretaps, the war, 2006, and the laziness of the traditional media, I would encourage everyone to become intimately familiar with the details of the Bush plan, as the misinformation and spin will be flying fast and furious post-SOTU. The healthcare system in America isn't so hot, but it's far better than this anti-working family, anti-poor, anti-sick, and anti-elderly disaster Bush is about to put his weight behind. This is a serious fight we're going to have to engage in.

Former Senator Tom Daschle has a post up at Think Progress that does a fairly good job of providing a brief primer on the proposal. The links, which I'd suggest checking out, are from the original post.

This is a bad idea for three reasons:

  1. It makes the wrong assumptions about health care. A person with chest pain is not in a position to decide on which tests to take and what drugs he needs. A $1,000 deductible is not going to make a person switch hospitals to get an extra hour of hospital care, which is all that the deductible can buy. Health care is not a commodity. When we buy a car, we don't want to have the parts dropped off on our front lawns. Consumer-driven care just doesn't make sense for health care.

  2. It assumes that individuals can go up against industry and win. Look at the Medicare drug benefit. My mother has to choose from 73 plans. It is impossible for her to figure out which has the lowest prices. Rather than pooling the purchasing power of seniors to leverage lower prices, this drug benefit allows for drug companies to charge higher prices and insurers to profit. So, if you like the Medicare drug benefit, you will love consumer-directed health care.

  3. It pits the healthy against the sick. About 70 percent of costs in the U.S. health system are for the top 10 percent most expensive people. These people's costs are well above the deductible, so a high deducible won't change their behavior.

Ezra Klein also turned in a solid backgrounder piece on Bush's HSA plans a few days ago at Tapped, which I would wholeheartedly recommend for those interested in a bit more in-depth discussion of the issue. He cites a good deal of evidence to indicate that Bush's plans won't even come close to accomplishing their stated goals.

In other words, Bush isn't really interested in improving healthcare. He's only interested in achieving his ideological goal of making sure that the shared burdens of American society are foisted upon individuals, whether or not they can handle them. Every man for himself.

The Bush Healthcare Plan - Increasing the Uninsured

Despite what you may have heard, the prevailing faith among the Republican leadership is actually not Fundamentalist Christianity. It's laissez-faire capitalism. No matter how many examples of the failures of unregulated markets they are presented with (see also: Enron), they continue to espouse the belief that free market economics will save all. (This doesn't begin to explain the hypocrisy of their insistence on no-bid contracts for their cronies, however.)

With this in mind, it's not surprising that the centerpiece of Bush's upcoming State of The Union address is apparently going to be shifting the healthcare system to private healthcare savings accounts. One of the many obvious problems with HSAs is that the system assumes that employees will have surplus income to contribute to them. In the Wal-Mart economy, that's becoming increasingly rare. And health insurance works by spreading the cost of healthcare out among a large group of people, both healthy and sick, ensuring that those most in need are not those least able to pay. Bush's system, by incentivizing healthy people to leave insurance pools, would essentially destroy that balance, making healthcare more expensive for those who can least afford it.

In a sense, this is exactly like Bush's Social Security privatization plan. Why share a burden that can be forced upon the individual? Bush's National Economic Council chairman Al Hubbard sings the praises of "trying to give consumers the opportunity to be engaged in the process." But don't 'consumers' (see also: patients) have enough to worry about without seeking out and then poring over healthcare industry data they don't really understand?

At the end of the day, these are band-aids on a mortal wound. We don't have a very good healthcare system in the United States. The problems that Bush's adviser cites are indeed actual problems. But further privatization of the system is the exact wrong answer. It's too dangerous to leave the health of our nation to a private pay-to-play system like the one Bush is pushing. The only answer that truly makes sense is the one used in every other industrialized nation -- a universal system of public healthcare.

What does the State of the Union hold for immigration reform?

From the Restore Fairness blog-

Delivered to Congress last night, President Obama’s second State of the Union address was one that looked squarely into the future, and was charged with optimism, hope and the spirit of cooperation-

We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we  share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled. That, too, is what sets us apart as a nation…Now, by itself, this simple recognition won’t usher in a new era of cooperation. What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.

These words, spoken early in the speech, did more than honor Christina Green and the other victims of the tragic shooting that took place in Tucson, Arizona on January 8th. Along with noting the empty chair in the room and saying a prayer for Rep. Gabrielle Giffords, the President said, in his opening remarks, that the tragedy in Tucson served as a reminder that we were all greater than our parties and political affiliations, and that in order to face the great challenges that lie ahead, it is important to “move forward together.” This emphasis on cooperation between the two parties was symbolized by the fact that, for the first time, Democrat and Republican members of Congress sat together at the State of the Union address, representing a show of unity for Gabrielle Giffords.

In a speech that focused on science, technology, clean energy and education, President Obama chose to avoid specifics in favor of a rhetorical approach that employed storytelling to illustrate points. In addition to invoking the repeal of the contentious “Don’t Ask Don’t Tell” policy in the military, he surprised immigration and human rights advocates by spending some time on the issue of immigration reform. In the spirit of allowing everyone to shape their own destiny and contribute to the future of the country, the President expressed support for immigration reform and the enactment of the DREAM Act that would give an estimated 2 million undocumented youth who have lived in the country since they were children, and gone through the educational system, to be put on a path to citizenship. He said-

Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense…Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let’s agree to make that effort. And let’s stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.

The issue of immigration has always been a contentious subject; one on which lawmakers have remained extremely divided. What cannot be disputed, however, is that the current immigration system is broken and desperately needs fixing. Currently, there are approximately 11 million undocumented immigrants living in the United States, people who work hard to seek a better life for themselves and their children. Mostly living in the shadows, a lot of people are forced to work for minimum wage, facing inhumane conditions while being denied basic care. Following 9-11, the government’s harsh policies regarding immigrants have resulted in a denial of human rights and due process, with the government allowing raids and arrests without warrants, holding thousands in inhumane detention centers, and deporting people with a fair trial.

While it is tempting to be optimistic that Congress will heed the President’s advice, put aside their differences, and work on fixing the broken immigration system through fair and humane immigration reform, this is not the first time that President Obama has called upon lawmakers to address some of these problems. In the four times that the President has addressed Congress during his term, he has brought up the issue of immigration reform on three occasions. Further, there has never been any doubt about his support for the DREAM Act.

Due to the President’s support, and the work of Senator Harry Reid and other supporters, the DREAM Act even made it to a vote in the Senate in December of last year, only to be struck down. It is also difficult to ignore the fact that Immigrations and Customs Enforcement deported a record number of people in 2010, and put into place a high number of agreements between federal immigration and local law enforcement agencies. These agreements, like the 287g and Secure Communities program, sanction immigration enforcement at the local level without clear objectives or meaningful oversight, resulting in eroding public trust in the local police, and in racial and ethnic profiling, as well as the unlawful detention of U.S. citizens and permanent residents.

So yesterday, when the President spoke about what an uphill battle immigration reform is for Congress, immigrant rights advocates like Frank Sharry from America’s Voice could not help but wish for a more aggressive approach in which he got on the “offensive” and “challenged the Republicans on comprehensive immigration reform.”

As many states seek to introduce harsh anti-immigrant legislation that threatens the security and freedom of thousands around the country, we will wait to see whether the Congress heeds his advice, and works together towards a solution to the immigration system, it is poignant to invoke President Obama’s words-

We are the first nation to be founded for the sake of an idea – the idea that each of us deserves the chance to shape our own destiny…We do big things. From the earliest days of our founding, America has been the story of ordinary people who dare to dream. That’s how we win the future.

We need to live in a nation that ensures equal rights, justice and due process to all, irrespective of their national origin, ethnicity, race, or citizenship. We are daring to dream.

Photo courtesy of latina.com

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