Health Savings Sabotage

...This week, the House passed legislation that included a provision to require every HSA transaction be reviewed and verified as a legitimate medical expense. Democrats say this is to ensure that consumers are using their tax-free withdrawals for a knee replacement, rather than a new iPod. In reality it adds a layer of bureaucracy that could sharply reduce the appeal and cost savings of HSAs.

...A key player here is Ways and Means Health Subcommittee Chairman Pete Stark, whose main purpose in politics is to give the U.S. a government-run health-care system. He is a known opponent of HSAs – once comparing them to "weapons of mass destruction" – because they introduce more individual choice into the health-care marketplace.

...This is health insurance many Americans can afford, and it doesn't force those who have better use for their scarce dollars to buy gold-plated insurance with special-interest mandates (cover the chiropractors!) that Democrats want to force on everyone. HSAs also give consumers more reason to care about prices, bringing much-needed market discipline.

...Having lost the policy argument when HSAs were created, Democrats are now trying to kill them with regulatory subterfuge. The new scheme purports to ensure that money saved tax-free in an HSA is actually used for health expenses. But this is a nonproblem: Any withdrawal from an HSA is already subject to a federal tax audit, just as individual tax returns are. In any case if people cheat on their HSAs, they are only cheating themselves. When a medical expense arises below the insurance deductible, they will be the ones paying for it, whether from their HSA or another bank account.

Labels: HSA

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