A recent article reported that Paul Ryan has proposed Health Care Savings accounts as an option to the Affordable Care Act. We would all simply put money in the HCS and self pay for medical care. Absent a detailed explanation for how this would work, I can only draw from my own experience and analysis.
At work, we had an option for using an HCS. We could allocate an amount to put in the account each month and it was a yearly commitment. That seemed like a good idea. It could be used for out of pocket medical expenses, such as co-pays, over the counter medicines, prescriptions and such. The benefits were 1) it was deducted before taxes 2) Once I set the amount to be collected for the year, that amount of money was available right away. So, if I needed $300 in January but had only put in $100 so far, it wasn't a problem. I had a special debit card to use so if it was a qualifying expense, I could just use that card.
But then it became very complicated to use. Even if I obviously used the card at a doctor's office or pharmacy where they could see exactly what the card paid for, I had to submit paperwork within 30 days. If they questioned the paperwork, they froze the card. But, of course, they still kept collecting the money from my paycheck each month. Then, at the end of the year, if I didn't use all the money collected, it wasn't returned to me nor was it rolled over into the next year. Some mysterious entity kept the money.
The first year it worked pretty well and I used every bit that I had put in the account. The second year, things got weird and it didn't work the same as the first year. I lost about $500. I never used the Health Savings Account again.
I cannot imagine putting enough money in a Health Savings Account to be able pay for any major health issue. My experience leaves me with a boat load of questions about how this could possibly work. Those of us who are older with higher risk of catastrophic illness would need to put a LOT of money in an HCS account each month. Those of us who are younger feel indestructible and cannot imagine even needing a Health Care Account. And what about people who already have a serious medical condition that would require much more savings than could possibly be put into an account each year? If, as I experienced, somehow the money wasn't used (perhaps due to odd restrictions) who gets the money?
If anyone has a link to a detailed explanation of this proposal, I'd be very interested in reading it. It sounds like a great plan for wealthy people and for those believing they are indestructible. It could be a GREAT plan for those administering the funds. It makes no sense at all to me in terms of a health care solution. It makes a lot of sense to me as a money making plan for someone.