NCPA - National Center for Policy Analysis


July 21, 2006

Conventional health care plans provided by employers give workers carte blanche for out-of-control spending, however, they can be effectively reined in through the "paternalistic" health savings account (HAS) model, says John C. Goodman, president of the National Center for Policy Analysis.

The most commonly heard criticism of the HSA is that it only works for people who can afford to set money aside for health care. Are HSAs a realistic option for a cashier at Wal-Mart?

According to Goodman, the opposite is true because the wealthy individual doesn't need a (HSA):

  • If the wealthy individual wakes up in the middle of the night and his stomach hurts and he wants to go to the emergency room, he doesn't have to worry about whether he's able to pay.
  • (HSAs) are paternalistic devices and they're created with the person in mind who lives paycheck-to-paycheck and is not very good at saving for medical costs.
  • All of the money that goes into HSAs from an employer could easily have been paid in wages.
  • (Employers) want people to make good choices, but they don't want people to go without care because they don't have the money.

But isn't a conventional health plan a better choice for these workers?

"With a conventional healthcare plan, either we cover the emergency room visit, in which case (the low-paid worker) goes to the emergency room too often, or we have a deductible, in which case she might not go when she should because she didn't have the cash. There's no better person to make a decision like that than the person who wakes up in the middle of the night (with an emergency health problem). So you want to empower people to let them make decisions that only they can really make," says Goodman.

Source: "CostRx: A 'paternalistic device,' " United Press International, July 20, 2006.


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