HSA-Based Reform Proposed as Post-ObamaCare Option
November 4, 2010
With assistance from Devon Herrick, a senior fellow with the National Center for Policy Analysis, physician Roger Beauchamp has developed the "180-Degree Approach to Health Care Benefits Reform," which he says will control rising health care costs across the nation and help save Medicare from its expected bankruptcy, says the Heartland Institute.
Herrick says the 180-degree approach would widen the use of health savings accounts (HSAs) across the nation.
- It would involve instituting a $10,000 tax exemption for health care costs on both payroll taxes and income taxes for those who purchase their health insurance individually or obtain it through their employer.
- The tax exemption would be capped at $10,000.
- The amount of foregone FICA and payroll tax on the $10,000 would be directly deposited into each individual's HSA, amounting to $1,530 for an individual or $3,060 for a married couple to use solely on their health care.
Beauchamp says giving these popular accounts a primary role in a post-ObamaCare world would empower consumers and lower bureaucratic control over personal medical decisions.
The 180-degree approach would also save the nation from the impending fiscal explosion of Medicare, Beauchamp says. According to U.S. Treasury Secretary Tim Geithner, the Medicare fund is projected to become insolvent in 2017.
"By allowing all Americans to accumulate over their lifetimes more money that is completely tax-free to be used for their health care, we make them less dependent on Medicare when the time comes to retire," Beauchamp says.
The approach will also improve the financial position of U.S. businesses and establish fairness for the first time between people who buy health care individually and those who get it from a company plan, says Heartland.
Source: Thomas Cheplick, "HSA-Based Reform Proposed as Post-ObamaCare Option," Heartland Institute, November 3, 2010.
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