Is the Medical Savings Account Plan a Scam?

I have been hearing a lot about how the GOP thinks Americans have too much health insurance. They want to get rid of the tax deduction for health benefits and encourage “health savings accounts” where you set aside money for regular health care and have a high deductible insurance policy in the case of catastrophic illness or injury. I’m sure that some rich basta*rds make out from this plan, but the stated reasoning is that folks overuse health care and drive up costs because they treat their health care as if it were free when they are insured. If they thought more about what they were spending, they might shop around and cause market forces to work on health care. Presumably, a million clinics run by Dr Nick Riviera from the Simpsons would open up around the land to provide cut rate health care to folks of modest means.

I doubt that most people overuse health care and go to their doctors every time they get a sniffle. First off, going to the doctor is a pain in the ass and is almost never enjoyable. I reckon most folks go or take their kids to the doctor when they feel that they have to. Many folks don’t go enough and skip examinations and needed treatment because of the inconvenience of getting care. Might folks go less often if they had to pay more? You bet, but I don’t reckon that is a good thing.

I also doubt that this program will put much downward pressure on the costs of routine care or that routine care is really what drives cost increases. Who is really going to do all that much shopping around for needed care or procedures? I note that dentistry is usually not insured and that it is nonetheless pretty expensive. Moreover, dentists in any given area charge more or less the same price for various procedures and services. For me, the deciding factor is not cost but convenience and my perceptions of the competence of the dentist. What do uninsured folks who cannot afford dentistry do? They do without the care until it becomes an emergency. They lose their teeth, and I don’t reckon that this is a good outcome.

Look at other professionals such as lawyers. Almost nobody has legal insurance, but lawyers are almost always prohibitively expensive for folks of modest means, and they mainly do without legal advice, often to their detriment. If they get in hot water with the police, they are provided with, let’s be frank, bad lawyers. Is this what the GOP wants medical care to look like? Richer folks, like registered Republicans, would be able to afford the high deductible easily and would get the best of care. Not so rich folks would often have to do without.

Is the GOP solution really rationing in disguise? In a nutshell, the GOP plan is to reduce costs by having less affluent folks get less medical care. I’m sure this will mean less waiting time before appointments for those of us who can afford to pay high deductibles, but will it translate to lower fees as doctors compete for our patronage? I rather doubt it. Health care, like good Scotch or wine, is more desirable if it is more expensive. I will still want Dr Hibbard, despite his inappropriate laughter, rather than go to Dr Nick.

Of course, like lawyers, dentists and doctors have state enforced monopolies and limit access to the market for providing medical services. The number of practitioners is kept artificially low, and these limits on the supply side probably have more of an impact on costs and pricing than consumer behavior. How can the market work its magic when access to the industry is so obstructed?

Finally, wouldn’t a policy that led to less prophylactic care for folks lead to more instances of catastrophic illness which, under the GOP plan, would still be subject to all the evils arising from insurance coverage? Doesn’t care for catastrophic illness or injury account for a huge part of medical expenditures in this country?