Pardon the wonkiness, but we're probably going to hear a lot more from the Bush administration about health savings accounts (HSAs). When as many as 18,000 Americans die prematurely each year because they lack adequate health care, there can be no doubt that there is a crisis. It's a shame that we're being offered this instead of substance. Here's a little more information about the problems with this approach.
There are two major approaches to insurance. One is a social insurance model where risks and costs are spread across a large population. No one person or group pays a huge amount and everybody pays something. A good example of this is the Social Security system.
The other approach is actuarial, where what you pay is based on your situation and history. Think of car insurance. And think of HSAs. Under the actuarial model, people with health problems would be like drivers with lots of wrecks and speeding tickets in their record.
Jonathan Chait summed it up pretty well in The New Republic (9.13.04): "Insurance is supposed to spread the risk: Rather than a few people (the very sick) losing everything and most people (the healthy) getting off scot-free, everybody pays a little bit. That's what company health plans do. But HSAs would encourage the well-off and the healthy to pull out of group plans; the more that do so, the higher the rates rise for the sicker folks remaining, leading more people to drop out. That's the vicious cycle that has driven up both insurance costs and the number of the uninsured. Bush's plan would accelerate it."