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Excerpts from:  The Ethics of Health Care Reform

Matthews, Pres of Institute of Policy Innovation,  Jul 20, 2009,

The Ethics of the Consumer Driven Model The consumer driven model is the only one that incorporates both our fundamental principle—patient control—and yet balances the consequence-oriented need for access to coverage and quality care that is financially sustainable over the long term.

 In the consumer driven model, patients pay for most of their routine care out of pocket or from a special tax-preferred account, such as an HSA. But insurance is still there to protect them in case of catastrophic expenses. Because it’s high-deductible insurance, it’s less expensive, leaving money available to deposit into the HSA. (Note: in most employer-provided HSA policies, the employer will pay for the insurance policy and provide some or all of the funds for the HSA).

Because consumer driven policies cost less and give people more control over their health care dollars, one would expect lots of uninsured people and lower-income workers to be choosing them, and that is exactly what we are seeing among those purchasing HSAs in the individual market.

According to various surveys:  More than a third of purchasers had incomes under $50,000; Around a third were previously uninsured.

In addition, more than a third of firms starting to offer HSAs did not previously offer any insurance.

The cost of consumer driven plans also tends to grow more slowly than traditional insurance, meaning that over time, HSAs will become more affordable, and so we should see demand grow even more.