Health Savings Accounts (HSAs) and The Massachusetts Plan--Two Great Experiments

In the wake of the President Bush's new health plan, much has been said about whether we should move to reform the health care system by building upon the traditional employer-based system (preferred by most Dems) or move to a system more controlled by individuals (preferred by most Republicans and the President).

Democrats claim the President's plan would wreck the employer-based system--something that has worked fairly well for the majority of people who have health insurance there.

Republicans claim that the employer-based system simply insulates consumers from the true cost of health care with its rich benefits and that consumers need to be more in control of what is spent for them so that they are better consumers. HSAs are the answer many of these people look to.

The President might have had a chance of getting his plan through Congress in the Republican heyday three or four years ago but this Democratic Congress is not going to give him the time of day on his recent proposal. Nor will Democrats likely be able to move anything major with their slim majorities and a Republican presidential veto at hand.

But let's look at the bright side.

We have two great health care experiments underway:

• Recent HSA legislation that enables us to assess these Republican ideas.
• The Massachusetts universal health plan that mirrors much of what the Dems are talking about in terms of building a more universal system on existing public and employer-based programs.

Supporters of the Mass approach took a hit this week when the program administrator announced that the average premium for the basic health plan would cost an average of $380 per person per month (and many insurer bids were much higher)! The original estimate, when the bill was passed, called for an average cost per person of $200 per month--and there was a later estimate of $260 per month.

Clearly, the Mass program is a work in progress.

If Mass doesn't fix this problem this grand experiment is going to be dead before it even begins.

One can argue we even have a third experiment in the new Medicare Part D drug plan and Medicare Advantage program testing the notion that government can create and fund a benefit but let the private sector run it.

So, we won't see any great legislation in the last two "lame duck" years of the Bush administration.

But let's not miss the great opportunity we now have to test these competing ideas!

My sense is that once we elect a new President and Congress, with health care a major issue, in 2008 we will be as ripe for health care change in 2009 as we were in 1993.

All of this experimentation and debate is going to take us to a very promising and interesting place beyond the next presidential election!!!